Law 

Will the New Legislation Help Accelerate the Preparation and Realisation of Construction?

In recent years, all the new or forthcoming legal regulations amending construction legislation have had something in common – to accelerate and simplify building permit processes. No wonder – within developed countries, the Czech Republic is at the very tail of various rankings and surveys mapping, among other things, the length of construction preparation. To give an example – based on the World Bank Report “Doing Business 2019”, the Czech Republic takes 156th place.

This, among other things, accounts for the fact that the latest amendment to Act No. 416/2009 Coll., on Fast-tracking the Construction of Transportation, Water and Energy Infrastructure and E-communication Infrastructure, as amended – Act No. 169/2018 Sb. – has won the Act of the Year 2018 survey. However, will the amended legal regulations help us to an accelerated and more efficient construction preparation?  Will we be able to climb up in the rankings after a certain period of time? Let’s have a look at the most important legal acts from the past few years.

The Amendment to Construction Act No. 225/2017 Coll., effective since 1 January 2018, has introduced joint land planning and construction proceedings, which, in certain cases, can also include the process of environmental impact assessment (EIA). Despite their initial indignation, building and construction authorities have come to terms with the new processes. What still remains a problem, is the fact that the joint proceedings cannot be fully used for more complex constructions as documentation for the joint proceedings must be prepared in the depth of detail required for the last level, ie in the detail required for construction permits. This can be rather difficult when changes occur in the location of the construction, and the follow-up documentation must be subsequently modified to meet the requirement of the level of detail necessary for a construction permit.

The Amendment to Act No. 225/2017 Coll., stated above, introduced a formalised consent of the owner of the land to which the construction plan relates –  instead of an agreement about the right to realise the construction as it had been required previously, the consent is newly marked only on the situation plan in the documentation. According to the amendment, it is no longer necessary to have the consent of the owner of the land for land-planning or construction proceedings if the land for the construction plan can be expropriated. However, it is assumed that in cases when property relations are not solved consensually, the owner of the construction will ensure property relations, or the expropriation decision. Many investors are not aware of this aspect, and thus, unfortunately for them, the process of construction preparation does not end for them even after the decision related to their construction permit becomes legally effective.

The limitations set on the participation of the general public in the proceedings and the limitations on the deadlines for the review of unlawful binding opinions thanks to which the amendment came in 3rd place in the Act of the Year 2017 survey, are still being reviewed by the Constitutional Court for their constitutionality.

Acceleration of Strategic Constructions – Primarily Transportation  Constructions

On 31 August 2018 the amendment to Act No. 169/2018 Coll., on Fast-tracking the Construction of Transportation, Water and Energy Infrastructure and E-communication Infrastructure became effective. However, it is necessary to state that the Act does not apply to all constructions, it only applies to strategic infrastructure constructions.

The main points that help simplify construction permit proceedings include the simplified manner of delivering information to the participants of the proceedings via a public notice, delivering information to deceased participants of the proceedings, and the legal fiction of the issuance of a binding opinion if a binding opinion is not issued within 60 days. What will also make the life of investors in the area of strategic infrastructure constructions easier, is the possibility of entering the land owned by someone else in order to survey the territory, and the simplified regime for the relocation of networks for investors in the area of transport and energy infrastructure, under  which the owners or  keepers of the land are newly obliged to carry out the relocation. The Act also includes simplification in the processes of expropriation of the given land.

For selected strategic infrastructure constructions (selected motorways, roads, railways and selected infrastructure for water and air transport) stated in the annex to the Act, the amendment to Act No. 169/2018 Coll., introduced the possibility of issuing a decision referred to as interim decision that will decide on the expropriation. This interim decision can subsequently be reviewed only by a court (it is not possible to file an appeal against it, which will accelerate the process of expropriation). Afterwards, the decision on the expropriation is issued. This is one of the main reasons why a group of senators challenged the amendment to Act No. 169/2018 Coll. before the Constitutional Court.

It was not until 1 September 2018 when the provision related to the changes in the competency of the expropriation authorities for transport infrastructure construction, or more precisely, the introduction of competency of regional authorities instead of municipalities with increased competency, included in Act No. 169/2018 Coll. became effective.  The appellate bodies for filing appeals against the decisions on the expropriation for transport infrastructures are the Ministry of Transport and the Ministry of Regional Development.

Further Amendment (Still in Process) for the Acceleration of the Preparation of Strategic Constructions

The government is currently discussing another amendment to the Act on Fast-tracking the Construction of Transportation, Water and Energy Infrastructure and E-communication Infrastructure.

The amendment that is still in process introduces plans referred to as the territorial development plans adopted at the central level. Territorial development plans will exist alongside the principles of territorial development and zoning plans. However, the nature of the territorial development plans should be very similar to the nature of the zone planning documentation and if a certain construction is marked on the territorial development plans as a construction realised in the public interest, then it will give rise to expropriation. However, the question arises whether territorial development plans will not have a (negative) impact on the use of zoning plans and the related rights of the local municipalities and regions to exercise their autonomy.

The amendment also proposes that plans that require a consent or an approval in accordance with the act on the protection of the environment and nature, could be realised without such a consent if they have been subject to the EIA process. As concerns consensual purchases of land intended for the construction, the amendment specifies the conditions for determining the purchase price.

Recodification of Public Construction Rights

In addition to the amendments stated above, recodification of public construction rights is currently being prepared, which aims to replace the existing construction act and related specific legal regulations, including the Act on Fast-tracking the Construction of Transportation, Water and Energy Infrastructure and E-communication Infrastructure. The proposal for recodification is currently in the state of factual intent.

The recodification assumes the establishment of a centralised state body, or the Supreme Construction Authority that will have regional branches and will be separate from any other exercise of state administration in delegated competency – similarly to tax authorities.

There is a significant change related to the establishment of the Supreme Construction Authority – namely the integration of competencies related to the protection of the given public interests and their assessment under a newly established net of construction authorities (protection of nature, protection of water, protection of historical heritage etc.) instead of being performed by the given relevant authorities. In this respect, the implementation of the new arrangement will be of great importance as it should prevent circumventing or devaluation of the given individual public interests.

It is being proposed that binding deadlines (set approximately at the length of two months) should be stated for the issuance of decisions. Thus, the construction proceedings, including the subsequent appeal procedure should be shortened to approximately four months.

The planned recodification also introduces the fiction of consent of the owner of the affected land. The owner of the construction could start all proceedings and obtain the consents of the given owners afterwards. Nevertheless, it is necessary to point out once again that the construction owner will have to come to an agreement on property relations with the owner of the land as the consent for the construction proceedings (or its fiction) does not substitute the property relations agreed under private law. There is a risk that some of the owners of the given land may be omitted and that it will be extremely difficult to obtain their consent with the realisation of a construction that has already been permitted.

Without the consent of the given owners, ie the owners of the land where the construction should be realised, it will not be possible to realise the construction. The public-law title in the form of a decision on the construction permit does not substitute the required private-law agreement.

Summary

It appears that the new legislation is strongly aimed at simplification and acceleration of construction preparation, namely the preparation of strategic constructions.

Nevertheless, despite all the attempts to accelerate construction, it is necessary to duly respect the protection of all the affected interests, namely the interests of the affected owners, and act sensitively. It is also necessary to take into account the fact that a sensitive assessment of the affected public interests is an important aspect. This is necessary if we do not want another amendment to the act to end up at the Constitutional Court.

In conclusion, it is necessary to point out that legislation cannot solve everything. It will be necessary to ensure that the newly established Supreme Construction Authority gathers  competent officials who will be able and willing to apply new principles and procedures in practice.

Amended Construction Act
Law 

What Does the RTS on SCA Bring with Regard to Statutory Audits?

Regulatory technical standards for strong customer authentication (the “RTS to SCA”), which entered into force on 14 September 2019, brought about a number of new obligations to payment service providers, including banks and payment institutions. Although the media mention, in particular, new obligations related to the requirements for strong customer authentication, in particular when initiating electronic payments (whether it is card payments in the store, the purchase of goods in an e-shop, entering an order in online banking or other acts), which must newly be a two-factor one (i.e. consisting of a combination of two or more elements from the category of ‘knowledge’, ‘possession’ and ‘inherence’), the above regulation also brings about new obligations of a purely internal nature. Specifically, the obligation to carry out internal audits, namely the audit of security measures (“audit of security measures”) as well as an audit of the way in which the so-called transaction risk analysis (“TRA audit”) is carried out. What are these two types of audits about and what is their substance? 

25. 11. 2019
Technology  Law 

Personal Data Processing News

This time we focus on the most important findings from the published information regarding inspections and decisions of the Office for Personal Data Protection in the first half of 2019. We are also reporting on further development concerning codes of conduct and certifications, on the procedure in the event of a security breach and procedure for informing customers about personal data processing, on an important decision related to cookies, and on an effort to unify the procedure for issuing penalties in Germany, and possibly the whole EU. 

22. 11. 2019
Law 

Filing a Motion with the Office for the Protection of Competition Will Be Free of Charge Again

On 13 November 2019, the Constitutional Court announced a major ruling in the area of public procurement, which will have a significant impact on the review of procurement procedures by the public. It is now possible again to file motions with the Office for the Protection of Competition regarding errors in public tenders without the necessity to pay the administrative charge of CZK 10,000. 

21. 11. 2019