Published in D.R. number 170 (Series I-A) of 25 July 1988

Assembleia da República (Assembly of the Republic)

Law

(This is not an official translation of the law)

Regulates the access of the private economic initiative to certain economic activities.

The Parliament decrees the following, under the terms of article 164, subparagraph d), and article 169, paragraph 3 of the Constitution:

Article 1

Private companies and other entities of a similar nature are not allowed to perform the following activities, except when licensed:

Entrapment, treatment and distribution of water for public consumption, collection, treatment and rejection of urban waste waters, both through fixed networks, and collection and treatment of solid urban waste in the case of multi-municipal and municipal systems;

Postal communications that constitute the public mail service;

Railway transportation exploited under a public service regime;

Exploitation of harbors.

For the purpose of the terms of subparagraph a) of the previous paragraph, multi-municipal systems are those that service at least two municipalities and require a major investment, to be made by the State given its national interest, and municipal systems are all others, including those managed through associations of municipalities.

In the case of multi-municipal systems, the licenses concerning the activities referred to in subparagraph a) of paragraph 1 shall be granted by the State and shall only be attributed to companies whose share capital is, in its majority, held by entities of the public sector, namely local Councils.

The public mail service referred to in subparagraph b) of paragraph 1 shall be defined through decree-law.

The public service licensing referred to in subparagraph c) of paragraph 1 shall be granted by the State or municipalities or associations of municipalities, requiring, in the latter cases, a State authorization when the activities that are the object of the licensing require a major investment to be carried out by the State.

Article 2

The exploitation of the underground resources and of the remaining natural resources that, under the terms of the Constitution, are the property of the State shall always be subject to the licensing regime or another, which does not involve the transfer of property of the resources to be exploited, even in the cases where the exploitation is carried out by public sector companies or companies of mixed economy.

Article 3

The prohibition of the private initiative to access the activities referred to in the previous articles hinders the private entities to gain possession of the production goods and means allocated to the activities considered therein, as well as the respective exploitation and management outside the cases specifically established in this diploma, without prejudice of the continuation of the activity of the companies with private capital existing at the date of enforcement of this law and within the respective existing functioning framework.

Article 4

The access regime to the armament industry and the carrying out of the respective activity shall be defined through decree-law, so as to safeguard the interests of the national defense and economy, the safety and tranquility of the citizens and the State's international compromises.

The diploma concerning the activity of the armament industry sector shall include, namely:

That it is compulsory the identification of the initial shareholders, whether direct or through third parties, specifying the share capital to be subscribed by each one of them;

A control system for the relevant share capitals;
That the authorization for the performance of the activity within the armament industry sector, as well as for its maintenance, shall be subject to the requirement of a structure that assures that the financial, technical and human means for carrying out that activity are appropriate and sufficient;

The requirement of presenting a list of materials, equipment or services that the company proposes to produce, as well as the markets intended to be targeted;

The requirement of the companies submitting to the accreditation of national security and the special legislation concerning the import and export of war material and its components.

Article 5

Law no. 46/77, of July 8 is hereby cancelled.

Approved on July 3, 1997.

The President of the Parliament, António de Almeida Santos.

Enacted on July 18, 1997.

Let this be published.

The President of the Republic, Jorge Sampaio.

Countersigned on July 24, 1997.

The interim Prime Minister, António Manuel de Carvalho Ferreira Vitorino.