Are there any measures specifically targeted for the contracts in the culture and arts sector?

By means of Ordinance no. 37-A/2021, of 15 February 2021, amended by Ordinance no. 80-A/2021, of 7 April, the Government approved Measures to Support Cultural activities, with the context of the COVID-19 pandemic.

The new Regulation include the following measures which apply to all sector’s activities:

a) Programa Garantir Cultura (a special program aimed at the cultural sector, which includes the creation of non-refundable support aid for the whole cultural sector for the development of artistic, creative and programming projects in all areas, namely the performing arts, visual arts, cross-disciplinary intersections, books, cinema and museology),  which includes two subprograms:

i) Garantir Cultura - business sector (with a € 30,000,000 budget, this program consists of non-refundable support aid for artistic and cultural activities, in particular for artistic creation and programming, which may include live or digital performances, aimed at micro, small and medium-sized cultural enterprises , allowing the remuneration of artistic and technical work and the mitigation of restrictive impacts on artistic and cultural activity);

ii) Garantir Cultura - single and collective artistic entities engaged in non-commercial activities (with a € 12,000,000 budget, this program consists of non-refundable support aid for single and collective artistic entities, for artistic creation and programming, which may include live or digital performances,  allowing the remuneration of artistic and technical work and the mitigation of restrictive impacts on artistic and cultural activity);

b) Extraordinary support for artists, authors, technicians and other cultural professionals (foresees the possibility of a payment of a € 438,81 grant );

c) Support granted by Direção-Geral das Artes (DGARTES) (such support may be granted to entities that benefited from sustained financial support, in full or in part, whose contracts expire on 31 December 2021, other eligible entities that were not granted support under Programa de Apoio Sustentado 2020-2021, eligible entities that were not granted support under Programa de Apoio a Projetos 2020 and Regional Orchestras);

d) Support granted by Direção-Geral do Património Cultural (DGPC) (call for applications under  Programa de Apoio a Museus da Rede Portuguesa de Museus — ProMuseus, in the first quarter of 2021, with the total budget of € 600,000, to be assigned by DGPC, to mitigate the impacts of the pandemic crisis and to support the museums);

e) Support granted by Direção-Geral do Livro, dos Arquivos e das Bibliotecas (DGLAB) (24 grants totalling €270,000, as well as financial support totalling €300,000 for small and medium-sized retail bookshops);

f) Support granted by Regional Directorate for Cultural Affairs (with the commitment to open calls to the award of support to non-professional artistic entities in the first quarter of 2021, with a total budget of € 1,107,000, where €335,000 will be assigned to Direção Regional de Cultura do Algarve (Algarve Regional Directorate for Culture), €282,000 to the Direção Regional de Cultura do Alentejo (Regional Directorate of Culture of Alentejo), € 245,000 to the Direção Regional de Cultura do Centro (Regional Directorate of Culture of the Centre) and € 245,000 to the Direção Regional de Cultura do Norte (Regional Directorate of Culture of the North);

g) Support granted by Instituto do Cinema e do Audiovisual, I. P. (ICA, I. P.) (to reinforcement exceptional support schemes, in an additional amount of € 1,440,000, which complements some of the financial support programs granted in 2020);

h) Programme for the State's acquisition of Portuguese contemporary art (with an available amount of € 650,000).

By means of Ordinance no. 75-B72021, of 31 March, the Government approved the Garantir Cultura (business sector) Programme Regulations, a which aims to create an Incentives Scheme for the cultural business sector, funded by European Structural and Investment Funds (Article 1/1)).

Garantir Cultura (business sector) Programme” aims to encourage cultural and artistic activities, namely cultural creation and programming, in the hopes of mitigating the negative impacts on the sector’s activity resulting from public health protection measures to fight the COVID-19 pandemic (article 1/2).

The "Garantir Cultura (business sector) Programme" is applicable in all mainland Portugal (article 3) and has a budget of EUR 30 million (article 4). The beneficiaries of the support granted under this programme – which takes the form of a non-refundable grant (article 12/1) – are micro, small and medium-sized enterprises, of any nature and however incorporated, including sole proprietors with organised accounts (article 6).

Decree-Law no. 10-I/2020, of 26 March, which has been subject to several amendments and is currently in force with the amendments introduced by Decree-Law no. 26-E/2021, of 5 April, seeks to establish the contractual effects of rescheduling and cancelling shows, which could not take place on the booked venue, date and hour, by legislative act or administrative order issued by a governmental authority, or by the national health authority :

  • Imposing, when possible, the rescheduling of the shows up to 14 working days before the date of the event and, in any case until 31 December 2022, at the latest. Otherwise the rescheduling shall be deemed to be a cancellation. Free entrance shows, promoted by contracting entities (subject to public procurement proceedings) can be rescheduled to a date up to a maximum of 18 months after the emergency measures are revoked
  • Clarifying that setting a new date shall not have any effect on the validity of the previously sold tickets;
  • Setting another date shall not lead to the reimbursement of the ticket price, nor to the payment of any extra charges by the owners or exploiting entities of the venue of the show;
  • The show must be cancelled in case rescheduling is objectively impossible and such impossibility cannot be attributed to the promotor. For such purpose, the rescheduling of shows is considered “objectively impossible” when it concerns local or regional festivities or specific festive days which are unrepeatable within one year counted from the originally scheduled date. The impossibility of rescheduling is not attributable to the promotor in case, within a maximum term of 1 year counted from the originally scheduled date of the show, the promotor is not able to find a venue with the capacity of the venue initially hired, in the city, metropolitan area or within a range of 50 km from the area where the show was supposed to take place;
  • In case of cancelation of the show, reimbursement of the ticket price and restitution of the amounts paid in advance to the owners or exploiting entities of the venue of the show shall take place (the customer is, however, entitled to ask for the substitution of the ticket for a ticket for a different show).
  • In regard to shows promoted by public entities or by “public-law bodies”, or shows that are mainly funded by public funds, promotor shall ensure, in case of cancelation or rescheduling of the show, that the payments are made within the contractual deadlines and that, at least, in the date in which the show was initially supposed to take place, minimum amount of 50% of the total contractual price has already been paid (nevertheless, a new date can be settled for the show and further payments can be made accordingly with the new deadline)
  • In case the works already performed or the services or goods already provided exceed the contractual price, the promotor shall pay the amount outstanding; in case of rescheduling, additional works, goods or services may be purchased, and prices may be revised whenever applicable.
  • Free entrance Shows may be rescheduled up to 18 months after the legal prohibition or limitation of shows have expired.
  • Such obligations also apply to contracts that had not been executed when Decree-Law no. 10-I/2020 entered in force, provided that: (i) the pre-contractual procedure had already been initiated, or (ii) the programming had already been announced, or (iii) the promotor had confirmed the cultural agent, in writing, that the show would be carried out, having agreed with the price and date proposed. Government shall ensure, with a frequency not exceeding 30 days, the announcement of the timetable for lifting of the restrictions or the maintenance of said limits to the performance of live shows. This should be adapted to the changing condition related to the fight against the pandemic.
  • Cancellation of shows arising from prohibitions and restrictions imposed to the operation of show activities or venues is considered as a result of force majeure, for legal and contractual purposes, as well as for obligations and commitments undertaken as a result of performance of a show that was cancelled.
  • Whenever possible, the parties must maintain their contracts, ensuring their scope and objectives, and fulfilling their obligations in relation to the date to be chosen for rescheduling and, in any case, seek to achieve an equitable distribution of contractual costs and risks, avoiding unjustified losses or benefits.
  • Live shows occurring in indoor venues or outdoor festivals and shows of similar nature declared as such are prohibited until 30 September 2021. Such events may, however, exceptionally, take place in indoor venues or outdoor, in case of reserved seats, after communication and compliance with the legal capacity specifically defined by the Directorate General of Health (Direção-Geral da Saúde) according to the rules of physical distancing considered to be appropriated for the evolution of the pandemic.
  • The holders of the tickets for festivals and shows of a similar nature are entitled to obtain – without any additional cost or commission – a voucher with an equivalent amount to the price of the tickets purchased, which is transferable to third parties by mere tradition, and remains valid until 31 December 2021 (in case it is not used until then, the holder of the ticket may request the reimbursement). The voucher shall also mention the possibility of being used in the acquisition of tickets for the same show to be held on a new date or for other events held by the same promoter; the insurance contracted at the time of acquisition of the ticket is kept in force.
  • Cultural agents should provide information such as, namely, (i) the cancellation of the show or new date for its performance, (ii) the venue, physical or electronic, the procedure and deadline for the issuance of vouchers, (iii) all shows to be performed by said promoter until 31 December 2021, for which the vouchers issued may be used, as well as the (physical and electronic) place, procedure and deadline for their use, (iv) the list of agencies, sales outlets and electronic ticketing platforms allowing the use of the voucher, and (v) the physical or electronic place, procedure and deadline for reimbursement of the unused voucher.
  • When the amount of the ticket for another event held by the same promoter is higher than the amount of the voucher, this may serve as an initial payment of tickets of a higher amount for other events held by the same promoter; on the other hand, if the amount of the ticket for another event held by the same promoter is lower than the amount of the voucher, the remaining amount may be used for the purchase of tickets for other events held by the same promoter.
  • In 2021, live festivals or similar events in indoor or outdoor venues shall comply with the guidelines issued by the DGS, taking into account the evolution of the pandemic.
  • Pilot test events may be promoted, in cooperation with the DGS, to establish technical guidelines, namely in what regards to the occupation of places, capacity and social distancing.
  • The audience, artists and technicians, as well as all workers and service providers involved in the organisation, development and production of festivals and similar events may be subject to diagnostic tests for SARS-CoV-2.
  • The rescheduling of events, festivals and similar shows initially scheduled for the year 2020 and which will only take place in 2022 shall give rise to the refund of the ticket price to the respective ticket holder, and the ticket holder shall request the refund of the respective price within 14 working days after the date of the event to take place in the year 2021 (or, in the case of the holders of a voucher with an expiry date up to 31 December 2021, within 14 working days after the expiry date of such voucher), under penalty of being considered as having accepted the rescheduling of the event, festival or similar losing the right to a refund.
  • The rescheduling and cancellation of festivals and similar shows to be held in 2021 and 2022 is subject to the regime foreseen for festivals and similar shows in the year 2020, mutatis mutandis, including the following two aspects: (i) the vouchers are valid until 31 December 2022; (ii) the rescheduled shows must take place until 31 December 2022.

 

Who shall be covered by these measures?

These measures shall apply, regardless of the public or private nature to all:

a) Cultural agents, namely, artists, interpreters and performers, authors, producers, promotors, agents;
b) Owners or exploiting entities of the venues and entertainment facilities;
c) Agencies, ticket offices and online ticket sale platforms.

 

Are there any penalties for the non-compliance with these measures?

The compliance with the measures shall be supervised by Inspeção-Geral das Atividades Culturais and the non-compliance with the same shall be sanctioned under administrative offense (misdemeanor). 

 

Has any specific public procurement regime been approved for this purpose?

Yes. Decree-Law no. 10-I/2020, as amended by Law no. 7/2020, provided that public entities and “public law bodies” that promote shows could perform contracts (with no price limit) by means of a direct award based on the grounds of “extreme urgency”, and they could also perform contracts up to € 20.000 by means of a simplified direct award procedure. Nevertheless, said legal provision was revoked by Law no. 19/2020, which is effective as from 30 May.

 

Has any derogatory support measure been approved within this context?

Yes. Ordinance no. 180/2020, of 3 August, enacted the Regulation on the Support Facilities for the Culture Sector as part of the Economic and Social Stabilization Program.

Such Regulation establishes the rules applicable to (i) the support facilities for the adaptation of the venues to comply with the COVID-19 safety measures (with a grant of €750,000), (ii) the support facilities to professional arts institutions (with a grant of €3.000.000) and (iii) an additional support facilities to artists, authors, technicians and other cultural sector professionals.

These additional support facilities granted due to the Covid-19 situation to artists, authors, technicians and other cultural sector professionals may be classified as social benefits of the Social Security system.

The support facilities in question are assigned as a non-refundable grant, being paid by bank transfer, in one single instalment (in the case of the support facilities for the adaptation of the venues to comply with the COVID-19 safety measures and for the professional arts institutions) or in two instalments (in the case of the additional support facilities to artists, authors, technicians and other cultural sector professionals), being directly reported to the Tax Authorities by GEPAC and DGARTES.

More recently, Council of Ministers Resolution no. 4-A/2021, of 14 January 2021, established a “programme especially oriented towards mitigating the impacts of the pandemic crisis in the cultural sector”, to be operationalised and monitored by the Minister of Culture, with priority being given to the creation of the following two supports, both in the form of non-repayable grants:

  • Grant for operators of theatres and independent cinema and producers, promoters and agents of artistic shows, in an amount corresponding to part of the fall in profits in 2020 in relation to 2019, with a programming commitment, which can be executed in physical or digital contexts; and
  • Grant for persons and entities of all artistic sectors, for cultural programming, which can include physical or digital presentations, and respective remuneration of the artistic and technical work, considering the restrictions in the activity of the artistic and cultural areas resulting from the epidemic outbreak context.

In addition, by means of Ordinance no. 85/2021, of 16 April 2021, employers in the tourism and culture sectors, with decreasing invoicing, may now benefit from partial waiver and exemption from the payment of social security contributions, provided that, on 31 December 2020, they were registered under a certain activity code (article 2).

In addition, the self-employed, sole proprietors, managers and members of statutory bodies holding management offices, working in the tourism, culture, events and entertainment sectors, and who are able to prove the complete shutdown of their activity or the activity of the respective sector, as a result of COVID-19, can now, under certain circumstances, benefit from special support for the reduced business activity (article 3 of Ordinance no. 85/2021).

 

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.