CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
description of the principal risks and uncertainties fac - ing the company in its annual management report. International Sanctions (Designated Entities) The law enforces international sanctions by making it a serious offence to wilfully fail to freeze the funds or economic resources of “designated individuals, enti - ties, or groups”. To oversee compliance, the board of directors must formally approve and implement internal control programmes. Additionally, the board is required to designate a top-level management officer who is specifically responsible for ensuring the com - pany complies with these legal requirements. Although the laws do not explicitly use the “ESG” acronym, they establish key reporting requirements across these three areas: • General climate duty – There is a fundamental duty for everyone, explicitly including private compa - nies, to protect, preserve, respect and safeguard the climate balance, actively contributing to the mitigation of climate change. • Management report – The annual management report must include an analysis of non-financial performance indicators, specifically requiring information on environmental issues and employee matters. 7. Environmental, Social and Governance 7.1 ESG Requirements • Employee interests – Directors have a legal duty to act with diligence and loyalty, explicitly taking into account the interests of the company’s workers. 7.2 ESG Developments A material shift is currently under discussion in this jurisdiction regarding ESG reporting, with a strong focus on the environmental (E) component and sus - tainable finance. Based on the proposed draft law, the particular components of ESG that are changing include: • A new classification system – The introduction of a legal framework for a “sustainability taxonomy”. This system will classify economic activities to
accurately determine the degree of sustainability of entities and investments. • Mandatory and voluntary disclosures – The shift introduces mandatory reporting rules for disclosing information tied to this new sustainability classifi - cation. Additionally, it establishes a complemen - tary, voluntary regime for disclosing other sustaina - bility-related information. • Green financing focus – The primary objective of these changing reporting requirements is to promote overall sustainable development in Cabo Verde by standardising data and facilitating access to sustainable financing. 8. Artificial Intelligence 8.1 Board Oversight of AI There is no special regime on the matter of AI. 8.2 AI Use-Related Risks There is no special regime on the matter of AI. 8.3 Liability Exposures Arising From AI Use Although there is no specific AI law, the liability regime for directors and officers established in the Commer - cial Companies Code is broad and “technology-neu - tral” enough to cover contingencies arising from the use of AI. Main Liability Exposures Breach of duty of care and risk management Directors must act with the diligence of a careful and orderly manager, which includes the duty to make informed decisions regarding risks. Implementing AI systems without adequate oversight, resulting in unfair practices, safety incidents, or IP/data breaches, constitutes a direct breach of this fundamental duty. Disclosure failures The board of directors is legally required to prepare an annual management report containing a clear descrip - tion of the principal risks and uncertainties facing the company. If the use of AI represents a material risk (eg, severe reputational risk or privacy legal risks), fail - ing to disclose this information constitutes a reporting failure.
104 CHAMBERS.COM
Powered by FlippingBook