Judgment;Abstract — ECLI:EU:C:2022:346
Date: 2022-05-05
Language of the case: Portuguese
Court formation: First Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Portugal

summary: 
(i) the failure to transpose or incorrect transposition of Directive 2014/59/EU had 
been relied on prematurely because, when Decree-Law No 114-A/2014 was 
adopted, the deadline for transposing the directive had not yet expired; and (ii) 
the right to property enshrined in Article 17 of the Charter or in Article 1 of 
Additional Protocol No 1 had not been infringed, because the restriction of the 
shareholders’ property rights was justified. 
44. In the light of the principles recognised in EU law ― and also, of course, by 
the Portuguese Constitution ― any restriction of the right to property must satisfy 
the following requirements: (i) it must be justified on grounds of public interest; 
(ii) it must be adopted in the cases and under the conditions provided for by law; 
(iii) fair compensation must be paid in good time for the loss; and (iv) the 
principle of proportionality must be respected. 
45. […] [If] the “no creditor worse off” principle [were considered] to apply 
[…] also to the shareholders, the fact is that (i) the legislation that provided the 
basis for the resolution action made no express provision for it; and (ii) the 
institution that took the resolution action considered that this principle did not 
apply to the shareholders, as was made clear in the response from the Banco de 
Portugal. 
46. In any event, it should be noted that the creditor protection regime 
established by Article 145B(3) of the [Regime Geral das Instituições de Crédito e 
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Sociedades Financeiras (General Provisions governing Credit Institutions and 
Finance Companies; ‘the RGICSF’)], introduced by Decree-Law No 114-A/2014, 
also infringes Directive 2014/59/EU in so far as (i) it does not provide for two 
independent valuations to be undertaken; (ii) it does not require the valuations to 
be carried out as soon as possible; and (iii) it establishes that the difference 
identified by the valuation should not be paid to the creditors until the liquidation 
of the institution under resolution has been completed. 
47. Even if it were accepted that the national provisions can be interpreted in a 
way that is compliant with EU law, it is not possible to see how such an 
interpretation could now be used to place the shareholders in the position in 
which they would have been if the financial institution under resolution had been 
liquidated in its entirety, given that the procedure under which the Banco de 
Portugal took the resolution action has inevitably affected that possibility. 
48. The appellant does not agree with the statement that, irrespective of any 
application of the “no creditor worse off” principle, the shareholders are 
adequately protected through: (i) the benefit stemming from the fact that the 
original credit institution or its insolvency estate receives any proceeds from the 
sale of the bridge institution, as established in Article 145-I(4) of the RGICSF; 
and (ii) the proceeds obtained from the liquidation of the institution under 
resolution, which must be carried out in accordance with the [Código da 
Insolvência e da Recuperação de Empresas (Insolvency and Corporate Recovery 
Code)]. 
49. The application of those two mechanisms, whether jointly or separately, 
does not offer shareholders a satisfactory or fair outcome; it does not even 
provide them with an outcome similar to that which would be obtained by 
applying to them the “no creditor worse off” principle, which, applied at the 
present time in this specific case, using the compliant interpretation mechanism, 
runs up against the difficulties that we have already noted; this is therefore a 
clear case of infringement of the right to property and the principle of 
proportionality enshrined in the Charter. 
50. Turning now to look specifically at Directive 2014/59/EU, Article 32 thereof 
establishes that, in order for a resolution action to be taken, all of the following 
conditions must be met: (i) the determination that the institution is failing or is 
likely to fail has been made by the competent authority; (ii) having regard to 
timing and other relevant circumstances, there is no reasonable prospect of any 
alternative private sector measures or supervisory action, including early 
intervention measures or the write down or conversion of relevant capital 
instruments; and (iii) resolution action is necessary in the public interest, which is 
to be construed as meaning that it is necessary for the achievement of the 
objectives in question [Article 32(1)(c) and Article 32(5) of Directive 
2014/59/EU]. 
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51. Directive 2014/59/EU establishes an entire set of resolution tools, namely: 
the sale of all or part of the business (Articles 38 and 39); the formation of a 
bridge institution (Articles 40 and 41); asset separation (Article 42); and bail-in 
(Article 43 et seq.). 
52. However, the grounds given for the Resolution Action do not contain a 
single line, word or mere mention of any assessment ― not even implicit ― of the 
most obvious of the four options listed above, being the only one that would 
safeguard the integrity of BES’ assets, namely a bail-in using the relevant capital 
instruments. 
53. In addition to the requirement to have regard to the principle of 
proportionality when the resolution decision itself was taken, Directive 
2014/59/EU also establishes that, once the decision has been taken, interference 
with property rights should not be disproportionate. 
54. In that regard, the Commission took the view that interference with property 
rights would not be disproportionate if the shareholders and creditors concerned 
were entitled to compensation, which should be equal to the amount that they 
would have been entitled to receive if the institution had been wound up under 
normal insolvency proceedings. 
55. That approach was incorporated into Directive 2014/59/EU, which 
establishes a dual compensation mechanism: (i) a payment to be made to the 
institution under resolution; and (ii) what is known as the “no creditor or 
shareholder worse off” principle; where this mechanism is in place, the essential 
content of the right to property is deemed not to be infringed. 
56. Consequently, irrespective of the direct effect of Directive 2014/59/EU, the 
national authority [responsible for taking the] resolution action, which in this 
case is the Banco de Portugal, must in any event respect the compensation 
mechanisms for the institution under resolution, as clear expressions of the right 
to property protected by the Charter. 
57. In this submission we have shown that the valuation (whether provisional or 
definitive) established in Article 36 of Directive 2014/59/EU and the payment to 
the institution under resolution to be determined during the valuation stage, also 
provided for in that article, should have been made as soon as possible after the 
resolution decision was taken. 
58. In addition, Directive 2014/59/EU also establishes a safeguard mechanism 
for shareholders and creditors, stipulating that the shareholders and those 
creditors whose claims have not been transferred are entitled to receive at least as 
much as what they would have received if the institution under resolution had 
been completely wound up under normal insolvency proceedings (see Article 73 of 
the directive). 
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59. For those purposes, Article 74 of Directive 2014/59/EU stipulates that a 
valuation must be carried out by an independent person as soon as possible after 
the resolution action or actions have been effected. The main purpose of that 
valuation will be to determine the difference between (i) the treatment that 
shareholders and creditors would have received if the institution under resolution 
had entered normal insolvency proceedings and (ii) the actual treatment that they 
have received under the resolution action (Article 74(2) of the directive), so that, 
if there is a positive difference in favour of the shareholders and/or creditors, they 
will be entitled to be paid that difference out of the resolution financing 
arrangements. 
60. […] Although Decree-Law No 114-A/2014 was adopted after the 
publication of Directive 2014/59/EU and states […] that it is intended partially to 
transpose that directive, it is clear that it totally fails to achieve that objective. 
61. The RGICSF does not establish any mechanism for making a payment to the 
institution under resolution as provided for in Article 36 of Directive 2014/59/EU 
― [just as] there was no such mechanism before Decree-Law No 114-A/2014 was 
passed: it merely establishes that, once the sums provided by the Resolution Fund, 
the Deposits Guarantee Fund or the Agricultural Credit Cooperatives Guarantee 
Fund have been repaid, the balance of the sale proceeds are to be repaid to the 
original credit institution or its insolvency estate. 
62. That solution is very different from the one envisaged by the directive, 
because it does not ensure prompt payment of appropriate compensation for the 
“expropriation” of the assets of the institution under resolution.  
63. Secondly, although Article 145B(3) of the RGICSF establishes a safeguard 
mechanism for creditors, it does not do so for shareholders, unlike Directive 
2014/59/EU, even though the Portuguese regulatory authorities themselves ― 
including the Banco de Portugal ― recognised the need to make provision for 
appropriate compensation for shareholders, and we know that the views of those 
regulatory authorities were taken into account during the adoption of Decree-
Law No 114-A/2014, which inexplicably did not establish any suitable mechanism 
for compensating shareholders. 
64. Even if it were possible to interpret the national provisions in a way that is 
compliant with EU law, as held by the lower court, with the consequent 
application of the “no creditor worse off” principle to shareholders, that solution 
would not be sufficient, for the reasons set out in paragraphs 159 to 164. 
65. Lastly, as regards the two mechanisms in the national legislation, which do 
not constitute application of the “no creditor worse off” principle to shareholders 
but which, in the opinion of the lower court, allegedly offer adequate protection 
for the shareholders’ right to property, those mechanisms cannot be considered 
adequate or sufficient for the reasons set out in paragraphs 165 to 171.  
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66. Therefore, the rules in the directive regarding the safeguard mechanism for 
shareholders have not been transposed, and that situation cannot be rectified 
through recourse to a compliant interpretation or resolved by applying the 
alleged shareholder protection mechanisms to be found in the relevant national 
legislation. 
67. Thirdly, nor does Decree-Law No 114-A/2014 make provision for the two 
independent valuations we referred to earlier, which are established in Articles 36 
and 74 of Directive 2014/59/EU and would be key to ensuring a proper and timely 
application of the mechanisms for safeguarding shareholders and creditors. 
68. Decree-Law No 114-A/2014 provides only for a single valuation (see 
Articles 145F(5) and 145H(4) of the RGICSF), and contains no requirement for it 
to be carried out promptly, which can only be detrimental to the valuation’s 
accuracy and promptness. 
69. Moreover, with regard to the directive’s direct effect and the transposition 
deadline, it is unacceptable for a Member State to opt expressly to transpose a 
directive ― even before the deadline ― and to do so in a way that is defective. In 
so doing, it would be in breach of its obligations under Article 4(3) and 
Article 288 TFEU. 
70. When it comes to assessing the compatibility of national provisions with EU 
directives, the Court of Justice has held that national provisions whose declared 
purpose [is] […] to transpose a directive can be considered to come within the 
scope of that directive from the date on which they come into force ― and, 
therefore, not just from the deadline for transposing the directive ―, which means 
that where a Member State transposes a directive before the deadline it will be 
under a particular obligation to do so correctly and in full. 
71. In the present case, the clear […] objective of the […] national provisions in 
question was to bring Portuguese law into line with Directive 2014/59/EU. They 
therefore brought the rules on the resolution of financial institutions within the 
scope of EU law. 
72. The aim of Directive 2014/59/EU, in particular Articles 36, 73 and 74 
thereof, was to apply the principle of proportionality and the right to property 
established in the Charter. Therefore, on that ground too ― breach of the 
principle of proportionality and the right to property which the provisions of the 
directive sought to implement ― the incorrect transposition of those articles by 
the Portuguese legislature constitutes a breach of its treaty obligations. 
73. Lastly, it should also be noted that, even before the deadline for transposing 
a directive has expired and after it has come into force, under the current 
Article 4(3) and Article 288 TFEU, Member States must “during the period 
allowed for transposition refrain from taking any measures liable seriously to 
compromise the result prescribed by the directive concerned” ― the so-called 
blocking effect. 
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74. […] Although the court whose decision is being appealed recognised the 
existence of that obligation on Member States, it nevertheless ruled that the 
blocking effect did not apply in this case. 
75. The court is mistaken because, […] by transposing Directive 2014/59/EU 
incorrectly ― in particular, by failing to provide for a proper valuation of the 
assets and liabilities or for payment of adequate compensation to the institution 
under resolution and its shareholders ― the national legislature created a 
situation that allowed the resolution action to be taken in the terms in which it 
was taken by the Banco de Portugal, and the effects of that action extend beyond 
the point when the action was taken and […] considerably beyond the deadline 
for transposing Directive 2014/59/EU. 
76. It must therefore be concluded that the incorrect transposition of Directive 
2014/59/EU, implemented via Decree-Law No 114-A/2014 of 1 August 2014 ― 
which was adopted on that date solely in order to provide a basis for the 
resolution action in respect of BES, which was taken two days later ― seriously 
compromised the result prescribed by that directive, as was clearly foreseeable at 
the time, in that it introduced legislation on resolution actions that was clearly 
contrary to Directive 2014/59/EU. 
77. In view of the fact that that legislation on resolution actions ― that is, 
Articles 145A to 145O of the RGICSF ― taken as a whole breaches various rules 
and principles of EU law, the legislation must […] […] be […] set aside in its 
entirety by the court on that ground under the principle of the primacy of EU 
law. … 
[…] We request that this appeal be declared well founded […].’ 
THE BANCO DE PORTUGAL puts forward the following arguments […]: 
‘… (LL) With regard to the alleged infringement by the resolution action of the 
right to private property enjoyed by the shareholders of the bank under resolution 
and of the principle of proportionality, enshrined in Article 17 of the Charter of 
Fundamental Rights of the European Union and in Article 1 of Additional 
Protocol No 1, it has already been noted that […] the grounds […] put forward 
by the appellant are not significantly different from the grounds for the alleged 
invalidity of the Resolution Action for infringement of the right to private property 
and of the principle of proportionality under Portuguese law […], […], [because] 
naturally, those rights and principles are essentially no different, […] in terms of 
their scope and the content of the respective protection they provide, from those 
established in EU law; 
(MM) Moreover, […] the appellant’s interpretation of the judgment under appeal 
(and of the case-law of the Court of Justice of the European Union which it cites) 
is clearly wrong, in that it recognises the direct applicability of the “no creditor 
worse off” principle to the shareholders of the credit institutions under resolution 
since the entry into force of Decree-Law No 114-A/2014 (that is, before the expiry 
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of the deadline for transposing Directive 2014/59/EU); this is […] manifestly not 
the case, given that on this point the lower court merely held that […] the fact that 
the national provisions governing the resolution of BES did not provide for the 
application of the aforesaid principle to the shareholders did not mean, in 
particular, that “in terms of the extracontractual civil liability of the State … the 
position of the shareholders does not also come within the scope of protection 
provided by the legislation, if shareholders suffer a deterioration in their legal 
position as compared with the position in which they would have been in the event 
of a liquidation, which, in any case, is not an argument that has been put 
forward”; 
(NN) Moreover […] the appellant could not have relied on that ground […] since, 
as […] the bank resolution action took place in a situation in which the credit 
institution was completely failing to comply with the applicable ratios and was 
unable to meet its obligations in the immediate or short term (see Article 145C(1) 
and (3) of the RGICSF), it can intuitively be concluded that, under the alternative 
scenario to the adoption of the BES Resolution Action ― that is, the immediate 
insolvency and disorderly liquidation of BES ― the position of the shareholders 
would have been the same or even worse than the situation in which they actually 
found themselves after that resolution action was taken; 
(OO) It is precisely in that scenario ― that is, accepting the possibility that, in 
this particular case, the shareholders have found themselves in a worse position 
than they would have been in under the alternative scenario in which the credit 
institution was liquidated without a resolution action […] ― that the provisions 
[…] of Article 145I(4) of the RGICSF, concerning the receipt of any proceeds 
from the sale of the bridge bank, and the clear benefits that stem from conducting 
an orderly liquidation of the bank under resolution may be relevant, in so far as 
they help to neutralise the impact of any possible (but unlikely) difference in the 
position of the shareholders in the event of resolution and in the event of 
liquidation immediately before the resolution; 
(PP) […] It must be concluded that the fact that the national law under which the 
Resolution Action was taken does not provide for compensation for the 
shareholders of the bank under resolution does not infringe Article 17 of the 
Charter and Article 1 of Additional Protocol No 1 cited above, because any 
potential restriction of the property rights of those shareholders is fully justified 
by the very nature and characteristics of their investments, in that they are the 
bank’s owners and are, therefore, required to be the first to bear the 
consequences of a deterioration in the bank’s financial position (precisely as 
occurs under the general insolvency regime); 
(QQ) Nor […] is there any sense in the appellant’s argument that, regardless of 
the provisions of national law that applied at the time of the BES Resolution 
Action, in the context of that action the Banco de Portugal should have applied 
solutions such as those set out in Article 36(4)(e) and Articles 73 and 74 of 
Directive 2014/59/EU (on the recognition of possible compensation for the bank 
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under resolution and for its shareholders) on the ground that the right to private 
property necessitated those solutions; this is because of the simple fact that the 
Resolution Authority is required to take resolution action on the basis of the 
provisions of national law in force at that time; 
(RR) […] [With] regard to the alleged failure to transpose or incorrect 
transposition of Directive 2014/59/EU by Decree-Law No 114-A/2014 ― and the 
consequences that would arise from its being set aside by virtue of the primacy of 
EU law ― it has also been shown that the appeal brought by Massa Insolvente da 
Espírito Santo Financial Group is manifestly inadmissible; 
(SS) In particular, that is because, under the case-law of the Court of Justice of 
the European Union […], on 1 August 2014 the Portuguese legislature was under 
no obligation already to have transposed any of the directive’s provisions into 
national law, and consequently those provisions did not have direct effect, and 
because the national courts were not bound by the principle of interpreting 
national law in accordance with EU law as regards that directive; 
(TT) Moreover, it is perfectly permissible to transpose a directive in part, in 
stages, before the transposition deadline; when that occurs, the directive in 
question does not acquire direct effect ― still less, of course, as regards all the 
provisions included in it; 
(UU) In that respect, therefore, […] the […] legislature that introduced Decree-
Law No 114-A/2014 did not [breach] its obligation to refrain from taking any 
measures which, on expiry of the deadline for transposing Directive 2014/59/EU, 
were liable seriously to compromise the result prescribed by that directive, 
because, first, as we have shown, [breach] of that obligation must be assessed on 
the basis of the provisions that were actually adopted under national law, not on 
the basis of failure to transpose measures that are not yet binding, which is the 
situation in the present case; 
(VV) And, secondly, it is also because the primary objectives expressly established 
in Directive 2014/59/EU […] do not include, even indirectly or implicitly, any 
objective regarding a European requirement to compensate the credit institutions 
under resolution and their respective shareholders (by contrast with the position 
that clearly applies to their creditors); it can therefore be concluded that the fact 
that Decree-Law No 114-A/2014 does not provide for potential payment of 
compensation to the banks under resolution and their shareholders does not 
compromise the future achievement of the objectives prescribed by that directive; 
(WW) Moreover, even if compensating the banks under resolution and the 
shareholders were, as a matter of law, one of the fundamental objectives of 
Directive 2014/59/EU, even then the result would not have been compromised ― 
and certainly not seriously ― by the adoption of Decree-Law No 114-A/2014, 
particularly since […] its provisions do not prevent or hinder the banks that may 
be subject to resolution after the deadline for transposing the directive, and their 
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respective shareholders, from actually receiving certain compensation provided 
that the necessary conditions are satisfied;…’ 
― For its part, NOVO BANCO, SA submitted a reply to the appeal brought by 
Massa Insolvente da Espírito Santo Financial Group, in which it set out the 
following … arguments: 
[‘](17) The appellant has failed to demonstrate […] an infringement of the right to 
property and the principle of proportionality enshrined in Article 17 of the Charter 
of Fundamental Rights of the European Union and Article 1 of the Additional 
Protocol to the European Convention for the Protection of Human Rights and 
Fundamental Freedoms; 
(18) Regardless of the fact that Decree-Law No 114-A/2014 […] effected a 
partial transposition of that directive, under Article 130 of the directive Member 
States had until 31 December 2014 to transpose it; 
(19) Neither the appellant’s original application nor its appeal state the reasons 
why Articles 145A to 145O of the RGICSF should be set aside; 
(20) Both the European Commission and the European Central Bank assisted the 
Banco de Portugal in the adoption of the Decision of 3 August 2014 and made no 
objection to it; … 
(34) The request for a preliminary ruling sought by the then applicant, now the 
appellant in these proceedings, is completely inadmissible, in particular because it 
is manifestly irrelevant. …[’] 
[…]* 
II — Facts 
The Supreme Administrative Court refers to the facts as found in the judgment 
under appeal, which are reproduced in the present decision. 
* 
POINTS OF LAW 
Massa Insolvente da Espírito Santo Financial Group has appealed against the 
decision of the [Tribunal Administrativo e Fiscal de Lisboa (Administrative and 
Tax Court, Lisbon; ‘the TAF’)] over the need for a request for a preliminary 
ruling. 
In that regard it argues, contrary to what was found by that court, that in the 
present proceedings there is disagreement over the following points: (i) the 
interpretation of Articles 36, 73 and 74 of Directive 2014/59/EU in the context of 
a separation of assets; (ii) the possible infringement of EU law by the Portuguese 
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State for having incorrectly transposed Directive 2014/59/EU into national law by 
means of Decree-Law No 114-A/2014; and (iii) the possible obligation on 
national courts to interpret national legislation in accordance with Directive 
2014/59/EU. 
[…] […] 
The Banco de Portugal contends that the appeal should be dismissed […]. 
[…]. 
* 
[…]. 
[…] Under Article 267 of the Treaty on the Functioning of the European Union 
(TFEU) the national courts and tribunals of the countries of the European Union 
(EU) must request the Court of Justice of the European Union (CJEU) to give a 
preliminary ruling on any matter concerning the interpretation or validity of an 
[act] of EU law where a reply is considered necessary in order for the national 
court or tribunal in question to give judgment and where there is no judicial 
remedy under national law against the decisions of the court or tribunal 
concerned. 
Where a question concerning EU law is raised in a case pending before a national 
court or tribunal against whose decisions there is no judicial remedy under 
national law, that court or tribunal must bring the matter before the Court of 
Justice (third paragraph of Article 267 TFEU). 
[…] It is for the national court to assess the need to make a request for a 
preliminary ruling and to come to a decision independently of the arguments put 
forward by the parties. 
[…] 
In view of the fact that the Supreme Administrative Court is under an obligation to 
refer the matter, there is no need to examine this ground of appeal. 
[…]. 
2. […] The matter must be referred for a preliminary ruling as soon as it 
becomes clear that a ruling by the Court of Justice of the European Union is 
needed in order for the national court to give judgment and the court in question is 
in a position to define with sufficient precision the law and the facts relevant to 
the case and the legal questions it raises. 
According to Article 267 TFEU: 
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‘The Court of Justice of the European Union shall have jurisdiction to give 
preliminary rulings concerning: 
(a) the interpretation of the Treaties; 
(b) the validity and interpretation of acts of the institutions, bodies, offices or 
agencies of the Union; 
Where such a question is raised before any court or tribunal of a Member State, 
that court or tribunal may, if it considers that a decision on the question is 
necessary to enable it to give judgment, request the Court to give a ruling thereon. 
Where any such question is raised in a case pending before a court or tribunal of a 
Member State against whose decisions there is no judicial remedy under national 
law, that court or tribunal shall bring the matter before the Court. 
If such a question is raised in a case pending before a court or tribunal of a 
Member State with regard to a person in custody, the Court of Justice of the 
European Union shall act with the minimum of delay.’ 
It is necessary to examine […] whether […] the validity or interpretation of an act 
of an agency of the Union has been called into question. 
Massa Insolvente da Espírito Santo Financial Group argues […] that the 
resolution action in question infringes EU law, in particular the right to property 
and the principle of proportionality (Articles 17 and 52 of the Charter of 
Fundamental Rights of the European Union and Articles 32, 36, 73 and 74 of 
Directive 2014/59/EU), in that it cumulatively satisfies various requirements for 
such an infringement, in particular those concerning necessity and proportionality 
in connection with the objectives being pursued, even though the contested 
decision is silent on that matter, owing to the incorrect transposition of that 
directive into national law effected by Decree-Law No 114-A/2014 […], which 
amended Articles 145A to 145O of Decree-Law No 298/92 of 31 December 1992 
[approving the RGICSF] […], and that this […] infringes not only that legislation 
but also the principle of the primacy of EU law. 
Decree-Law No 114-A/2014 […], at issue in the present case, […] amended ‘the 
General Provisions governing Credit Institutions and Finance Companies, 
approved by Decree-Law No 298/92 of 31 December 1992 amending the 
provisions in Title VIII on resolution actions and partially transposing Directive 
2014/59/EU of the European Parliament and of the Council of 15 May 2014 
establishing a framework for the recovery and resolution of credit institutions and 
investment firms’. 
Before Decree-Law 114-A/2014 came into force, the version of Decree-Law 
No 282/92 […] that applied was the version introduced by Decree-Law No 63-
A/2013 of 10 May 2013, which included the following provisions: 
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‘Article 145A 
Purpose of the resolution actions 
The Banco de Portugal may take the actions provided for in this chapter in 
respect of credit institutions having their registered office in Portugal in order to 
achieve any of the following objectives: 
(a) to ensure the continuity of the provision of essential financial services; 
(b) to protect against systemic risk; 
(c) to safeguard the interests of taxpayers and of the Treasury; 
(d) to safeguard depositor confidence. 
Article 145B 
Guiding principle for taking resolution actions 
1 — When taking resolution actions, it shall be ensured that the shareholders and 
creditors of the credit institution bear primary responsibility for the losses 
incurred by the institution in question, in accordance with their order of priority 
and on equal terms within each class of creditors. 
2 — The previous paragraph shall not apply to covered deposits in accordance 
with Articles 164 and 166. 
Article 145C 
Taking resolution actions 
1 — Where a credit institution fails to satisfy or is seriously likely to fail to satisfy 
the requirements for continuing authorisation to carry on its activity, the Banco 
de Portugal may take the following resolution actions where they are essential in 
order to achieve any of the objectives set out in Article 145A: 
(a) the sale of all or part of the business to another institution authorised to 
carry on the activity in question; 
(b) the transfer of all or part of the business to one or more bridge banks. 
2 — The Banco de Portugal shall take resolution actions where it considers it 
unlikely that the credit institution will be able, within a reasonable timeframe, to 
implement the measures required in order to return to an appropriate state of 
soundness and to comply with prudential ratios. 
3 — For the purposes of paragraph 1, a credit institution will be deemed to be 
seriously likely to fail to satisfy the requirements for continuing authorisation to 
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carry on its activity where, among other justified grounds, the relevance of which 
is to be assessed by the Banco de Portugal in the light of the objectives set out in 
Article 145A, any of the following circumstances apply: 
(a) the credit institution has suffered losses that may undermine its equity, or 
there are reasonable grounds for believing that such a situation will arise in the 
short term; 
(b) the credit institution’s assets are less than its liabilities, or there are 
reasonable grounds for believing that such a situation will arise in the short term; 
(c) the credit institution cannot meet its obligations, or there are reasonable 
grounds for believing that such a situation will arise in the short term. 
4 — The taking of resolution actions is not conditional on the prior taking of 
corrective actions. 
5 — A resolution action shall be deemed to be without prejudice to the possibility 
of taking one or more corrective actions at any time. […] 
Article 145D 
Removal of management and supervisory bodies 
1 — Where the Banco de Portugal decides to take a resolution action, the 
members of the management and supervisory bodies of the credit institution in 
question shall cease to hold office and, where the Banco de Portugal so 
determines, any auditor or audit firm authorised to audit the accounts which is 
not a member of the supervisory body shall also cease to hold office. 
2 — Where the circumstance in the previous paragraph applies, the Banco de 
Portugal shall appoint the new members of the credit institution’s management 
body in accordance with the provisions of the following article, and any 
restrictions in the institution’s constitution shall not apply; it shall also appoint a 
supervisory committee or controller, which shall be governed, mutatis mutandis, 
by the provisions of Article 143. 
3 — If the Banco de Portugal removes the auditor or audit firm pursuant to 
paragraph 1, it shall appoint another auditor or audit firm to perform the duties 
in question. 
4 — Where the members of the management and supervisory bodies, and the 
auditor or audit firm authorised to audit the accounts which is not a member of 
the supervisory body, have been removed from office in accordance with 
paragraph 1, they must provide all information requested by the Banco de 
Portugal and cooperate as required by it for the purposes of taking resolution 
actions. 
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Article 145E 
Management 
1 — The directors appointed by the Banco de Portugal in accordance with 
paragraph 2 of the previous article shall be remunerated by the institution and, in 
addition to the powers and duties conferred on members of the management body 
by law and by the institution’s constitution, they shall have the following powers 
and duties: 
(a) the powers and duties established in Article 145(2); 
(b) the power to implement the decisions taken by the Banco de Portugal 
pursuant to Articles 145F to 145I, without any requirement to obtain the prior 
consent of the credit institution’s shareholders. 
2 — The appointed directors shall perform their duties for a period of time to be 
determined by the Banco de Portugal, which shall be for a maximum of 1 year, 
but which may be extended for further periods of the same duration. 
3 — The provisions of paragraphs 3, 4 and 6 to 10 of Article 145 shall apply, with 
such amendments as may be required. 
Article 145F 
1 — The Banco de Portugal may order the sale of all or part of the assets, 
liabilities, off-balance sheet items and assets managed by a credit institution to 
one or more institutions authorised to carry on the activity in question. 
2 — For the purposes of the previous paragraph, the Banco de Portugal shall 
invite potential recipients to submit offers and shall ensure that the procedure is 
transparent and that all interested parties receive equal treatment, having regard 
to the need for promptness entailed by the circumstances. 
3 — In selecting the recipient, the Banco de Portugal shall have regard to the 
objectives set out in Article 145A. 
4 — Potential recipients must be given immediate access to relevant information 
on the credit institution’s financial situation and assets and liabilities for the 
purposes of valuing the assets, liabilities, off-balance sheet items and managed 
assets that are to be sold; to that effect the duty of secrecy established in 
Article 78 may not be relied on against such access, which shall be without 
prejudice to the duty on the potential recipients to maintain due confidentiality of 
the information in question. 
5 — For the purposes of the sale provided for in paragraph 1, the assets, 
liabilities, off-balance sheet items and managed assets selected by the Banco de 
Portugal must undergo a valuation as at the time of sale, to be carried out by an 
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independent body appointed by the Banco de Portugal in the timescale determined 
by the Banco de Portugal, the cost of which is to be borne by the credit institution. 
The valuation is to be performed using a market-based valuation or, in the 
alternative, a fair-value method, which must take into account the intangible 
value, whether positive or negative, of the sale for the recipient. 
6 — The Banco de Portugal shall determine the amount of financial support 
which, where necessary, is to be provided by the Resolution Fund in order to 
achieve the sale referred to in paragraph 1. 
7 — The Banco de Portugal may invite the Deposits Guarantee Fund or, in the 
case of actions taking place under the Integrated Mutual Agricultural Credit 
Scheme, the Agricultural Credit Cooperatives Guarantee Fund, to take part in the 
sale process for covered deposits, in accordance with Article 167A or Article 15A 
of Decree-Law No 45/98 of 9 November 1998 as amended by Decree-Laws 
No 126/2008 of 21 July 2008, No 211-A/2008 of 3 November 2008, and 
No 162/2009 of 20 July 2009. 
8 — Where the value of the liabilities sold exceeds the value of the assets, the 
financial support provided in order to make up the difference in accordance with 
paragraphs 6 and 7 shall constitute loans from the Resolution Fund, the Deposits 
Guarantee Fund or the Agricultural Credit Cooperatives Guarantee Fund to the 
vendor credit institution. 
9 — Where the sale proceeds are positive, they shall be paid to the vendor credit 
institution. 
10 — Following the sale, continuity of operations must be ensured in respect of 
the sold assets, liabilities, off-balance sheet items and managed assets; in 
particular: 
(a) for all legal and contractual purposes the recipient institution must be 
deemed the successor to the vendor credit institution in respect of all the 
transferred rights and obligations; 
(b) the vendor credit institution and any company belonging to the same group 
that provides services to it in connection with the sold business must provide all 
information requested by the recipient institution and guarantee the recipient 
institution access to the information systems relating to the sold business and, in 
return for consideration to be agreed by the parties, must continue to provide it 
with such services as the recipient institution considers necessary for the normal 
conduct of the sold business. 
11 — The decision ordering the sale referred to in paragraph 1 shall have effect 
regardless of any legal or contractual provision to the contrary, and shall 
constitute sufficient title for the purposes of undertaking any legal procedure in 
connection with the sale. 
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12 — The decision regarding the sale referred to in paragraph 1 shall not be 
conditional on the prior consent of the credit institution’s shareholders or of the 
parties to contracts in respect of the assets, liabilities, off-balance sheet items and 
managed assets to be sold, and may not be used as a ground for exercising any 
acceleration rights contained in the contracts in question. 
13 — Any partial sale of the credit institution’s business must not prejudice the 
transfer in full of the vendor credit institution’s contractual positions, including 
the transfer of the liabilities associated with the sold assets, in particular as 
regards financial guarantee contracts, securitisation operations or other 
contracts containing set-off or netting clauses. 
14 — If the consideration fixed at the time of sale of the assets, liabilities, off-
balance sheet items and managed assets is demonstrated not to reflect their fair 
value, the recipient institution may, with the prior authorisation of the Banco de 
Portugal, return those assets, liabilities, off-balance sheet items and managed 
assets, provided that the provisions of the previous paragraph are observed, in 
which case the corresponding adjustment shall be made to the aforesaid 
consideration. 
15 — As an alternative to the return referred to in the previous paragraph, the 
Banco de Portugal may propose to pay the recipient institution the difference 
between the agreed consideration and the fair value of the assets, liabilities, off-
balance sheet items and managed assets. 
16 — The payment referred to in the previous paragraph may be made by 
transferring new assets belonging to the vendor credit institution to the recipient 
institution or may be financed from the Resolution Fund, the Deposits Guarantee 
Fund or the Agricultural Credit Cooperatives Guarantee Fund in accordance with 
paragraphs 6 and 7.  
17 — If the sale referred to in paragraph 1 gives rise to a concentration under 
competition law, that concentration may take place before the Competition 
Authority issues a no objection decision; this is without prejudice to any 
subsequent action by the Competition Authority. 
Article 145G 
Transfer of all or part of the business to bridge banks 
1 — The Banco de Portugal may order the transfer of all or part of the assets, 
liabilities, off-balance sheet items and assets managed by a credit institution to 
one or more bridge banks formed for that purpose, with the aim of enabling their 
subsequent sale to another institution authorised to carry on the activity in 
question. 
2 — The Banco de Portugal may also order the transfer of all or part of the 
assets, liabilities, off-balance sheet items and assets managed by two or more 
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credit institutions forming part of the same group to one or bridge banks for the 
purposes set out in the previous paragraph. 
3 — A bridge bank is a credit institution with the legal status of a bank, whose 
entire share capital is held by the Resolution Fund. 
4 — The Resolution Fund shall subscribe for and pay up the share capital of the 
bridge bank from its own resources. 
5 — The bridge bank shall be formed by means of an agreement of the Banco de 
Portugal, which shall approve its constitution; the provision in Chapter ii of Title 
ii shall not apply. 
6 — Once the agreement referred to in the previous paragraph has been adopted, 
the bridge bank shall be required to carry on the activities established in 
Article 4(1). 
7 — The bridge bank’s share capital may not be less than the minimum stipulated 
in a ministerial order made by the member of the Government responsible for 
finance, following consultation with the Banco de Portugal, and the bridge bank 
must comply with the regulations applicable to banks. 
8 — The bridge bank may commence its activity before completion of registration 
and other legal formalities; this is without prejudice to the requirement for it to 
complete those procedures as soon as possible. 
9 — The Banco de Portugal shall issue a circular setting out the regulations for 
the formation and operation of bridge banks. 
10 — The Código das Sociedades Comerciais (Commercial Companies Code) 
shall apply to the bridge banks, with such amendments as are required, having 
regard to the objectives and nature of these institutions. 
11 — The Banco de Portugal shall be responsible for appointing the members of 
the management and supervisory bodies of the bridge bank, on the 
recommendation of the executive committee of the Resolution Fund; the members 
of the management and supervisory bodies must comply with all instructions and 
recommendations from the Banco de Portugal, in particular decisions concerning 
the management of the bridge bank. 
12 — The bridge bank shall have a limited duration of 2 years, which may be 
extended by further periods of 1 year on duly justified public interest grounds, 
particularly where risks to financial stability remain or negotiations over the sale 
of the assets, liabilities, off-balance sheet items and managed assets are ongoing; 
however, under no circumstances may the maximum duration exceed 5 years. 
13 — In carrying on its activity, the bridge bank must follow management criteria 
that enable it to maintain low levels of risk. 
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14 — The Competition Authority must be notified of the transfer of all or part of 
the assets, liabilities, off-balance sheet items or assets managed by a credit 
institution to one or more bridge banks formed for that purpose, and of any 
extension of the duration as provided for in paragraph 12. However, in view of its 
temporary nature, the transfer shall not constitute a business concentration for 
the purposes of competition law. 
Article 145H 
Bridge bank’s assets and funding 
1 — The Banco de Portugal shall select the assets, liabilities, off-balance sheet 
items and managed assets to be transferred to the bridge bank on its formation. 
2 — Any obligations which the original credit institution has entered into with the 
following persons may not be transferred to the bridge bank: 
(a) its shareholders, members of its management and supervisory bodies, 
auditors or audit firms, or persons having that status in respect of other 
undertakings that are in a control or group relationship with the original credit 
institution; 
(b) any persons or entities that have been shareholders or have held the 
positions or performed the services referred to in point (a) during the 4 years 
prior to the formation of the bridge bank, and whose actions or omissions have 
caused the financial difficulties experienced by the credit institution or have 
contributed to aggravating its situation; 
(c) the spouses, relatives in the first degree of consanguinity or affinity, or third 
parties acting on behalf of the persons or entities referred to in points (a) and (b) 
above; 
(d) anyone who is responsible for acts relating to the credit institution or who 
has benefited from such acts, whether directly or through a third party, and who, 
in the opinion of the Banco de Portugal, has caused the financial difficulties or, 
through his actions or omissions within his sphere of responsibility, has 
contributed to aggravating the situation. 
3 — Nor may any instruments that are included in the determination of the credit 
institution’s own funds, the conditions of which have been approved by the Banco 
de Portugal, be transferred to the bridge bank. 
4 — The assets, liabilities, off-balance sheet items and managed assets referred to 
in paragraph 1 must undergo a valuation as at the time of the transfer, to be 
carried out by an independent body appointed by the Banco de Portugal in the 
timescale determined by the Banco de Portugal, the cost of which is to be borne 
by the credit institution. 
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5 — Once the transfer referred to in paragraph 1 has been completed, the Banco 
de Portugal may, at any time, take any of the following actions: 
(a) transfer other assets, liabilities, off-balance sheet items and managed assets 
belonging to the original credit institution to the bridge bank; 
(b) transfer assets, liabilities, off-balance sheet items and managed assets from 
the bridge bank to the original credit institution. 
6 — The Banco de Portugal shall determine the amount of financial support 
which, where necessary, is to be provided by the Resolution Fund for the purposes 
of creating the bridge bank and enabling it to carry on its activity, in particular in 
the form of loans made to the bridge bank for any purpose or the provision of any 
financing considered necessary to enable the bridge bank to increase its capital. 
7 — The Banco de Portugal may invite the Deposits Guarantee Fund or, in the 
case of actions taking place under the Integrated Mutual Agricultural Credit 
Scheme, the Agricultural Credit Cooperatives Guarantee Fund, to take part in the 
process of transferring covered deposits to a bridge bank, in accordance with 
Article 167A or Article 15A of Decree-Law No 345/98 of 9 November 1998 
respectively. 
8 — The total value of the liabilities and off-balance sheet items to be transferred 
to the bridge bank may not exceed the total value of the assets transferred by the 
original credit institution plus, where applicable, the financing provided from the 
Resolution Fund, the Deposits Guarantee Fund or the Agricultural Credit 
Cooperatives Guarantee Fund. 
9 — On completion of the transfer referred to in paragraph 1, continuity of 
operations must be ensured in respect of the transferred assets, liabilities, off-
balance sheet items and managed assets and, for all legal and contractual 
purposes, the bridge bank must be deemed the successor to the original credit 
institution in respect of all the transferred rights and obligations. 
10 — The original credit institution and any company belonging to the same 
group that provides services to it in connection with the transferred business must 
provide all information requested by the bridge bank and guarantee the bridge 
bank access to the information systems relating to the transferred business and, in 
return for consideration to be agreed by the parties, must continue to provide it 
with such services as the bridge bank considers necessary for the normal conduct 
of the transferred business. 
11 — The decision regarding the transfer referred to in paragraph 1 shall have 
effect regardless of any legal or contractual provision to the contrary, and shall 
constitute sufficient title for the purposes of undertaking any legal procedure in 
connection with the transfer. 
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12 — The decision regarding the transfer referred to in paragraph 1 shall not be 
conditional on the prior consent of the credit institution’s shareholders or of the 
parties to contracts in respect of the assets, liabilities, off-balance sheet items and 
managed assets to be transferred, and may not be used as a ground for exercising 
any acceleration rights contained in the contracts in question. 
13 — Any partial transfer of the assets, liabilities, off-balance sheet items and 
managed assets must not prejudice the transfer in full of the original credit 
institution’s contractual positions, including the transfer of the liabilities 
associated with the transferred assets, in particular as regards financial 
guarantee contracts, securitisation operations or other contracts containing set-
off or netting clauses. 
Article 145I 
Sale of the bridge bank’s assets 
1 — Without prejudice to any acts of disposal which the bridge bank may be 
authorised to make under its powers of management, where the Banco de 
Portugal considers that the conditions are right for the sale of all or part of the 
assets, liabilities, off-balance sheet items and managed assets that were 
transferred to the bridge bank, it shall invite other institutions authorised to carry 
on the activity in question to submit purchase offers; transparency must be 
ensured through the procedure. 
2 — In selecting the recipient, the Banco de Portugal shall have regard to the 
objectives set out in Article 145A. 
3 — The proceeds of the sale must be used, first, to make the following 
repayments, to be made on a proportional basis: 
(a) to repay the Resolution Fund all sums provided by it pursuant to 
Article 145H(5); 
(b) to repay the Deposits Guarantee Fund or the Agricultural Credit 
Cooperatives Guarantee Fund all sums provided by them pursuant to 
Article 145H(6). 
4 — Once the sums referred to in the previous paragraph have been repaid, any 
remaining proceeds from the sale shall be returned to the original credit 
institution or its insolvency estate, if it has gone into liquidation. 
5 — Once all the assets, liabilities, off-balance sheet items and managed assets 
that were transferred to the bridge bank have been sold and the proceeds of the 
sale have been distributed in accordance with paragraphs 3 and 4, the bridge 
bank shall be dissolved by the Banco de Portugal. 
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6 — Where it proves impossible to sell all the assets, liabilities, off-balance sheet 
items and managed assets that were transferred to the bridge bank, the Banco de 
Portugal may order the bridge bank to be wound up under the out-of-court 
liquidation procedure for credit institutions. 
Article 145J 
Other measures 
1 — Simultaneously with the taking of a resolution action, where necessary in 
order to achieve the objectives set out in Article 145A, the Banco de Portugal may 
order the application of the following measures to the credit institutions under 
resolution: 
(a) a temporary waiver of the prudential rules; 
(b) a temporary dispensation from timely compliance with obligations incurred 
previously; 
(c) a temporary closure of branches or other premises where transactions are 
undertaken with the public. 
2 — The provision in point (b) of the previous paragraph shall be deemed to be 
without prejudice to the maintenance of all creditors’ rights against those who are 
jointly liable or guarantors. 
3 — The measures established in this article shall last for a maximum period of 
1 year, which may be extended up to a maximum period of 2 years. 
Article 145L 
Set-off and netting agreements 
1 — The taking of any resolution action by the Banco de Portugal shall give rise 
to the suspension, for a period of 48 hours from service of the relevant notice or, if 
earlier, the announcement of the decision by the Banco de Portugal, of 
acceleration rights included in set-off and netting agreements contained in 
contracts to which the credit institution in question is a party, where the exercise 
of those rights is triggered by the resolution action in question. 
2 — On the conclusion of the period referred to in the previous paragraph, with 
regard to contracts sold or transferred under Articles 145F or 145G, the parties 
to the contracts with the credit institution may not use the taking of the resolution 
action as a ground for exercising acceleration rights included in set-off and 
netting agreements. 
3 — Without prejudice to the previous paragraph, parties to contracts covered by 
set-off and netting agreements that have been sold or transferred under 
Articles 145F or 145G shall continue to be entitled to enforce the acceleration 
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clause against the transferring credit institution on grounds other than that 
referred to in the previous paragraph. 
4 — Paragraph 1 shall not apply to those cases where the acceleration right 
arises from clauses included in financial guarantee contracts and shall be deemed 
to be without prejudice to the provisions of Directive 98/26/EC of the European 
Parliament and of the Council of 19 May 1998 on settlement finality in payment 
and securities settlement systems. 
Article 145M 
Winding-up arrangements 
If, following the taking of any resolution action, the Banco de Portugal considers 
that the objectives set out in Article 145A have been achieved, and it establishes 
that the institution does not meet the requirements for maintaining its 
authorisation to carry on its activity, it may revoke the authorisation of the credit 
institution that has been the subject of the resolution action in question, in which 
case the winding-up arrangements established in the applicable legislation shall 
apply. 
Article 145N 
Appeals and public interest 
1 — Without prejudice to Article 12, decisions of the Banco de Portugal adopting 
resolution actions are subject to the appeals provided for in the legislation 
governing administrative disputes, with the provisos set out in the following 
paragraphs, having regard to the public interest criterion governing such 
decisions. 
2 — The only persons with standing to make an application for injunctive relief 
are those who, either individually or collectively, hold at least 10% of the share 
capital or the voting rights of the institution in question. 
3 — Questions concerning the valuation of the assets and liabilities under 
resolution, or related questions, which do not require expert evidence are to be 
addressed during the substantive proceedings. 
4 — In the course of the enforcement of court decisions annulling actions taken 
under this chapter, the Banco de Portugal may rely on legitimate grounds for non-
execution in accordance with Article 175(2) and Article 163 of the Code of 
Administrative Procedure, in which case proceedings shall immediately be 
commenced to determine the appropriate compensation in accordance with the 
procedures set down in Articles 178 and 166 of that code. 
5 — Where notice is served on the Banco de Portugal in accordance with 
Article 178(1) of the Code of Administrative Procedure, it shall provide the 
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interested party and the court with the reports of the independent asset valuations 
in its possession that were commissioned for the purposes of taking the actions 
provided for in this chapter. 
Article 145O 
Valuations and calculation of compensation 
1 — For the purposes of paragraph 4 of the previous article and of any appeals 
over payment of compensation in connection with the adoption of the resolution 
actions referred to in Article 145C(1), any increase in value arising from public 
financial support, in particular support provided by the Resolution Fund, or from 
any intervention by the Deposits Guarantee Fund or the Agricultural Credit 
Cooperatives Guarantee Fund, shall not be taken into account. 
2 — In the proceedings referred to in the previous paragraph, irrespective of its 
possible involvement as a party, the Banco de Portugal must, on the order of the 
court hearing the case, submit a valuation report covering all prudential aspects 
that may be relevant for the purposes of calculating the compensation, in 
particular those concerning the credit institution’s future capacity to satisfy 
general authorisation requirements; this is without prejudice to the power of the 
Banco de Portugal to supply such a report of its own motion. 
3 — The compensation referred to in this article shall be paid from the Resolution 
Fund, except in those cases where the Banco de Portugal is civilly liable for 
unlawful acts.’ 
The above provisions were amended as follows by Article 2 of Decree-Law 
No 114-A/2014 […]: 
‘Article 145B … 
1 — When taking resolution actions, having regard to the objectives referred to in 
the previous article, it shall be ensured that: 
(a) the shareholders of the credit institution bear primary responsibility for the 
losses incurred by the institution in question; 
(b) secondarily, the creditors of the credit institution bear the remaining losses 
of the institution in question on equitable terms, in accordance with the order of 
priority of the various classes of creditors; 
(c) no creditor may bear greater losses than he would have incurred if the 
institution had gone into liquidation. 
2 — …. 
3 — If, on the conclusion of the liquidation of the credit institution under 
resolution, any creditors of that institution whose claims were not transferred to 
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another credit institution or bridge bank are found to have borne greater losses 
than it is calculated, in accordance with the provisions for the valuation referred 
to in Article 145F(6) and Article 145H(4), that they would have incurred if the 
institution had gone into liquidation immediately before the resolution action was 
taken, the creditors in question shall be entitled to receive the difference from the 
Resolution Fund. 
Article 145F … 
1 — …. 2 — …. 3 — …. 4 — …. 5 — …. 
6 — For the purposes of Article 145B(3), the valuation referred to in the previous 
paragraph shall also include an estimate of the amount which each class of 
creditors would have received in respect of their claims, in accordance with the 
statutory order of priority, if the credit institution had been wound up immediately 
before the resolution action was taken. 
7 — The Banco de Portugal shall determine the nature and amount of any 
financial support to be provided, where necessary, by the Resolution Fund, 
including, in particular, the provision of guarantees and loans to the vendor credit 
institution or the recipient institution in order to preserve the value of assets and 
liabilities and to enable the sale referred to in paragraph 1 to take place. 
8 — [Previous paragraph 7]. 
9 — Where the value of the liabilities sold exceeds the value of the assets, the 
amount of the financial support provided to make up the difference in accordance 
with paragraphs 7 and 8 shall constitute loans from the Resolution Fund, the 
Deposits Guarantee Fund or the Agricultural Credit Cooperatives Guarantee 
Fund to the vendor credit institution. 
10 — [Previous paragraph 9] 11 — [Previous paragraph 10] 12 — [Previous 
paragraph 11] 
13 — [Previous paragraph 12] 14 — [Previous paragraph 13] 
15 — [Previous paragraph 14] 16 — [Previous paragraph 15] 
17 — The payment referred to in the previous paragraph may be made by 
transferring new assets from the vendor credit institution to the recipient 
institution or may be made from the Resolution Fund, the Deposits Guarantee 
Fund or the Agricultural Credit Cooperatives Guarantee Fund in accordance with 
paragraphs 7 and 8. 
18 — [Previous paragraph 17] 
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19 — In selecting the assets, liabilities, off-balance sheet items and managed 
assets to be sold pursuant to this article, the provisions of Article 145H(2) shall 
apply, with such amendments as may be necessary. 
Article 145H 
… 1 — … 
2 — … 
(a) shareholders who, at the time of the transfer, hold at least 2% of the share 
capital, persons or entities which during the 2 years prior to the transfer have 
held at least 2% of the share capital, members of its management and supervisory 
bodies, auditors or audit firms or persons having that status in respect of other 
undertakings that are in a control or group relationship with the original credit 
institution; 
(b) …; (c) …; (d) … 
3 — … 
4 — The assets, liabilities, off-balance sheet items and managed assets selected in 
accordance with paragraph 1 must undergo a valuation as at the time of the 
transfer, to be carried out by an independent body appointed by the Banco de 
Portugal in the timescale determined by the Banco de Portugal, the cost of which 
is to be borne by the credit institution. For the purposes of Article 145B(3), that 
valuation must also include an estimate of the amount which each class of 
creditors would have received in respect of their claims, in accordance with the 
statutory order of priority, if the credit institution had been wound up immediately 
before the resolution action was taken. 
5 — …. 
6 — The Banco de Portugal shall determine the nature and amount of any 
financial support to be provided, where necessary, by the Resolution Fund for the 
purposes of creating the bridge bank and enabling it to carry on its activity, in 
particular in the form of loans made to the bridge bank for any purpose, the 
provision of any financing considered necessary to enable the bridge bank to 
increase its capital, or the provision of guarantees. 
7 — … …. 8 — …. 9 — …. 10 — …. 11 — …. 12 — …. 13 — …. 
Article 145I 
…1 — …. 2 — …. 3 — …: 
(a) to repay the Resolution Fund all sums provided by it pursuant to 
Article 145H(6); 
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(b) to repay the Deposits Guarantee Fund or the Agricultural Credit 
Cooperatives Guarantee Fund all sums provided by them pursuant to 
Article 145H(7). 
4 — …. 5 — …. 6 — ….’ 
The regulations governing resolution actions in respect of supervised institutions 
were, in turn, further amended by Law No 23-A/2015 of 26 March 2015, which 
completed the transposition of the directive in question. 
With regard to the partial transposition of directives before the transposition 
deadline, the Court of Justice of the European Union has already ruled that the 
partial transposition of a directive must not be liable to compromise the directive’s 
objectives. This is made particularly clear in the judgment of 18 September 1997, 
Case C-129/96, which held as follows: 
‘The second paragraph of Article 5 and the third paragraph of Article 189 of the 
EEC Treaty, and Directive 91/156, require the Member States to which that 
directive is addressed to refrain, during the period laid down therein for its 
implementation, from adopting measures liable seriously to compromise the result 
prescribed.’ 
[…] In various other judgments, the Court of Justice of the European Union has 
ruled specifically on whether certain provisions of directives must be interpreted 
as precluding particular national legislation even before the expiry of the 
transposition deadline. 
See, for example, among others, […] [the judgments] of 2 June 2006[,] […] 
C-27/15 and […] of 26 February 2015[,] […] C-104/14. 
It is true that the third paragraph of Article 288 of the Treaty establishes that a 
directive must […] first be transposed into national law and that it is binding on 
each Member State as to the result to be achieved, but leaves to the national 
authorities the choice of form and methods. But it is equally true that, in certain 
circumstances, the Court of Justice of the European Union recognises direct effect 
in order to protect the rights of individuals where the provisions of the directive 
are unconditional and sufficiently clear, and the Member State has not transposed 
them by the deadline. 
It follows that, in the light of the obligation on Member States to take all 
necessary measures to achieve the result prescribed by a directive and […] [of the] 
case-law of the Court of Justice of the European Union to the effect that Member 
States and their courts must refrain, during the period laid down for implementing 
a directive, from adopting measures or making interpretations that are liable 
seriously to compromise the result prescribed by that directive, a request for a 
preliminary ruling needs to be made to the Court of Justice in order to remove 
doubt and to obtain the clarification and correct interpretation of the relevant EU 
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law required in order to examine […] the grounds of illegality that have been 
relied on […]. 
[…] Doubts have been raised in connection with the grounds of illegality that 
have been relied on; these concern the interpretation of EU law […] and, 
therefore, need to be resolved before judgment can be given. 
[…] Having regard to the requirements stemming from the principle of the 
primacy of [EU] law and the principle of compliant interpretation, and given that 
the preliminary ruling procedure is an essential tool to ensure uniform 
interpretation and application of EU law in all Member States, the cohesion of the 
system of judicial protection within the EU and the principle of effective judicial 
protection of the rights of individuals, it is considered necessary and appropriate 
to make […] [a] request for a preliminary ruling, given that an analysis and a 
search of the www.curia.europa.eu/juris/ website have not identified any case-law 
of the Court of Justice of the European Union on the specific and precise limits 
[…] [to] the issue […] that has been raised […] or concerning a similar situation, 
particularly as regards the legislative framework […], and the present court does 
not know […] whether there is any settled case-law of the Court of Justice on that 
issue or on how to interpret the regulations at issue beyond reasonable doubt. 
In those circumstances, the Supreme Administrative Court considers that the 
present case meets the formal requirements […] for […] [a] request for a 
preliminary ruling. 
Therefore, […] in the context of the present proceedings and of the positions put 
forward by the parties, it is necessary to ascertain and determine whether the 
national legislation that partially transposes Directive 2014/59/EU by means of 
Articles 145A to 145O of the RGICSF complies with the EU law cited above and 
with the case-law of the Court of Justice of the European Union set out in the 
judgment of 18 December 1997, Inter-Environnement Wallonie, Case C-129/96, 
[…] [paragraphs] 44 and 45, [which was subsequently confirmed and is settled 
case-law], and to clarify whether the adoption of those provisions, in the terms set 
out above, principally through Decree-Law No 114-A/2014, is liable seriously to 
compromise the result prescribed by that directive. 
The following question[s] […] are therefore referred to the Court of Justice for a 
preliminary ruling […]: 
1. Must EU law, in particular Article 17 of the [Charter of Fundamental Rights 
of the European Union] and Directive 2014/59/EU of the European 
Parliament and of the Council of 15 May 2014 establishing a framework for 
the recovery and resolution of credit institutions and investment firms and 
amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 
2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 
2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and 
(EU) No 648/2012, of the European Parliament and of the Council, and in 
REQUEST FOR A PRELIMINARY RULING OF 23. 1. 2020 – CASE C-83/20 
 
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Anonymised version 
particular Articles 36, 73 and 74 of that directive, be interpreted as 
precluding national legislation such as that set out above, which was applied 
through a resolution action consisting in the formation of a bridge bank and 
the separation of assets, and which, in partially transposing that directive 
before the deadline for transposition: 
(a) did not provide for a fair, prudent and realistic valuation of the assets 
and liabilities of the credit institution under resolution to be carried out 
before the resolution action was adopted; 
(b) did not provide for potential compensation based on the valuation 
referred to in point (a) to be paid to the institution under resolution or, 
where appropriate, to the holders of shares or other titles of ownership 
and which, instead, merely provided for any remaining proceeds from 
the sale of the bridge bank to be returned to the original credit 
institution or its insolvency estate; 
(c) did not establish that the shareholders of the institution under 
resolution were entitled to receive an amount not less than the amount 
it is calculated they would have received if the institution under 
resolution had been completely wound up under normal insolvency 
proceedings, and established such a safeguard mechanism only for 
creditors whose claims had not been transferred; and  
(d) did not provide for a separate valuation from that referred to in point 
(a) to be carried out in order to determine whether shareholders and 
creditors would have received more favourable treatment if the credit 
institution under resolution had entered into normal insolvency 
proceedings? 
2. In the light of the case-law of the Court of Justice set out in the judgment of 
18 December 1997, Inter-Environnement Wallonie, [Case C-129/96, which 
was subsequently confirmed by the Court], is national legislation such as 
that described in the present proceedings, which partially transposes 
Directive 2014/59/EU, liable seriously to compromise the result prescribed 
by the directive, particularly by Articles 36, 73 and 74 thereof, in the context 
of taking the resolution action? 
* 
In the light of all the foregoing […]: 
[…] […] the present proceedings are stayed […]. 
[…] Lisbon, 23 January 2020 
[…]