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Amendment of the Law on measures and actions during the State of Emergency

amendment of the law

AMENDMENT OF THE LAW ON MEASURES AND ACTIONS DURING THE STATE OF EMERGENCY

WHAT IS IMPORTANT TO BUSINESS?
 
By virtues of a special 34th issue of the State Gazette the Law on Amending and Supplementing the Law on measures and actions during the state of emergency, declared by the National Assembly on 13 March 2020 (“the Law”) was promulgated. The Law amends important provisions concerning the consequences of delayed payments; compensations paid by the state for maintaining employment, known and as “the 60/40 measure”; the possibility of incentives for tenants of state and municipal property, etc.

Below we present a summary of the more important provisions affecting business.
  I. Regarding the consequences of delayed payments
According to the initial version of the Law on Measures and actions during the state of emergency declared by the National Assembly on 13 March 2020, the negative legal consequences of delayed payment of debts of private entities did not apply during the state of emergency. In practice, this meant that individuals, companies, civil societies, associations, foundations, etc. were able to delay payment of their monetary obligations without any negative legal consequences (interest, penalties, early payment, termination, seizure of properties, etc.).

In its current version, the Law provides the lack of consequences for delayed payments to be applied only to leasing contracts and credit agreements and other forms of financing (factoring, forfeiting, etc.) provided by banks and financial institutions under Art. 3 of the Credit Institutions Act, including where the debts have been acquired by other banks, financial institutions or third parties. Accordingly, with respect to all other contracts (purchase agreements, lease agreements, service agreements, etc.) delayed payment shall have all contractual and legal consequences for the party in delay.

  II. Regarding the compensation paid by the State to employers
The Law introduces changes to the aid offered by the state to employers in order to maintain employment, also popular as “the 60/40 measure”. According to the initial version of the Law on Measures and actions during the state of emergency and Decree № 55 dated 30 March 2020 of the Council of Ministers the compensation which the state pays shall cover 60 per cent of the insurable income of the employees, but not the obligation to the employer for insurance payments.

In the current version, the Law provides for the compensation to cover also the insurance contributions paid by the employer. According to the Minister of Labor and Social Policy, however, it is unclear as to what part of the insurance contributions shall be covered by the state – whether 60 percent, as it is in terms of employment remuneration, or in full. The Ministry of Labor and Social Policy is expected to request an interpretation of the Act and subsequently amend the Decree No. 55 dated 30 March 202, of the Council of Ministers, regulating the terms and conditions for applying for compensation.

Meanwhile, the Ministry of Labor and Social Policy published an Order № RD 01-219 dated 2 April 2020 which assigns additional obligations for employers whose employees continue to work form the office. Some of the responsibilities include: introducing an access control; creating a work organization that minimizes direct contacts between employees as well as between employees and visitors; where possible, keeping a distance of not less than 1 - 1.5 meters; providing the necessary personal and collective means of protecting to the employees according to the specifics of their activity – face masks, gloves, etc. The control on compliance with the Order is entrusted to the Executive Agency General Labor Inspectorate, which has the authority to carry out inspections and impose sanctions on employers in case of non-compliance.

  III. Regrading incentives for tenants of state or municipal properties
According to the Law, until the end of the state of emergency by a decision of Council of Ministers, governors and heads of other departments providing rent or use of state or municipal properties may introduce incentives for the respective tenants or users. Under the Law, incentives may include a reduction of the amount of rental payment or exemption of payment in whole or in part. The incentives should target tenants or users who have limited or ceased their activities due to the measures and restrictions imposed during the state of emergency. According to the provisions of the Law, the introduction of the said incentives is left at the discretion of the respective state or municipal bodies.

  IV. Regarding obligations under the Anti-Money Laundering Act
According to the Anti-Money Laundering Act, obliged persons have a period of 6 (six) months to prepare internal rules for control and prevention of money laundering and terrorist financing, in accordance with the results of the National Risk Assessment. The results were published on 9 January 2020 on the website of the State Agency National Security and as of this date begins the 6-month term for adoption of the internal rules.

According to the Law, the terms for the adoption of rules are suspended until the end of the state of emergency, and non-profit legal entities which do not fall into another category of obliged entities, adopt the rules within 4 months of the state of emergency.

  V. Regarding legal proceedings and prescription periods
Pursuant to the Law, the prescription periods, which terminate rights or create obligations for individuals, shall be suspended during the state of emergency, unlike other terms provided in legislation.

An Attachment to the Law explicitly lists criminal, civil and administrative proceedings on which procedural terms are suspended, some of which are:
- In civil and commercial proceedings: security proceedings; evidence securing cases; permits for withdrawal of deposits from children's deposits; custody cases regarding only interim measures; proceedings under the Domestic Violence Protection Act only an order for immediate protection or amendment thereof, as well as in cases of rejection of the request for protection;         
 
- In administrative proceedings: security proceedings; evidence securing proceedings; procedures for challenging of acts for public receivables; cases under Art. 215 of the Spatial Planning Act, related to contesting acts for issued building permits and for approved and or amended detailed development plans; protection cases against unjustified actions of the administration, etc.         
For all judicial, arbitration and enforcement proceedings which are not listed in the Attachment, the suspension of procedural terms shall be maintained for the duration of the state of emergency.

  VI. Next steps
For more information and legal assistance for your business during the state of emergency, do not hesitate to contact the Legal Department of Colliers International at: bulgaria@colliers.com or +359 896 777 654. 

 

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