Business continuity & Covid-19: the reaction from EMEA Governments

Our Public Policy Teams across the EU are helping clients navigate Governmental measures being put in place to protect business continuity in light of the Covid-19 pandemic. Here’s a snapshot of such measures. Should you wish to explore further or need advice on how to navigate these systems, please do get in touch.

Foreign Minister and First Secretary of State Dominic Raab is deputising for Prime Minister Johnson where necessary, including leading daily COBR meetings. Prime Minister Boris Johnson remains in St Thomas’s Hospital after 3 nights in intensive care with coronavirus.

Nearly three weeks after entering lockdown, it is expected the UK Government will continue lockdown measures for at least another three weeks

• Newly elected Labour Leader Keir Starmer has called on the Government to publish its exit strategy
• It comes as Scotland’s Chief Medical Officer resigned after it was revealed she failed to follow her own advice and travelled, twice, to her holiday home with her family

Specific measures

• The Government has updated its guidance for furloughed workers so they can take on additional work with farmers groups welcoming the move ahead of seasonal harvesting

Chancellor Rishi Sunak has announced a new £750m support package for the charity sector, £370m of which will support small, local charities working with vulnerable people;

• The measures were announced after the Parliamentary Digital, Culture, Media and Sport Committee warned that charities face losing up to £4 billion in income and, if nothing is done, many will face insolvency within weeks
• It will also provide a further £360m directly to charities to help them provide essential services and support vulnerable people.
• Up to £200m of that grant funding will support hospices, with the rest going to organisations like St John Ambulance, the Citizens’ Advice Bureau as well as charities supporting vulnerable children, victims of domestic abuse or disabled people.
• The government will also match pound-for-pound whatever the public donates to the BBC’s Big Night In charity appeal, starting with at least £20m to the National Emergencies Trust appeal.
• In England, the support will be provided to organisations through the National Lottery communities fund; the government will also allocate £60m of this funding through the Barnett Formula to Scotland, Wales and Northern Ireland.

Meanwhile, Bank of England’s Term Funding Scheme now has additional incentives for SMEs. The scheme is designed to incentivise eligible participants to provide credit to businesses and households to bridge through the current period of economic disruption caused by the outbreak of COVID-19.

Finally, schools in the UK remain open over Easter to look after vulnerable children and those of key workers with the government offering £25,000-75,000 per school as additional funding to cover the cost of keeping schools open and additional cleaning costs.

Ireland

€1bn worth of supports announced for businesses

• On April 8 the Irish Minister for Business, Enterprise and Innovation, Heather Humphreys announced an expansion of supports for all businesses impacted by the Covid-19 crisis. (Official Press Release)
• This will provide support to the SME sector and the enhancements to the working capital, credit guarantee and future growth support products will provide important assistance to businesses at this challenging time. The package is now worth €1 billion in liquidity measures including a new Sustaining Enterprise Fund for firms in the manufacturing and international services sectors. Free mentoring and online training are also available for all SMEs.

• €450m of lending will be provided through the Strategic Banking Corporation of Ireland which will provide much needed liquidity for firms and bring total SBCI COVID-19 lending capacity up to €650m with loans available through the pillar banks. €180m will come from the Sustaining Enterprise Fund for firms in the manufacturing and international services sectors. Measures also include the extension of supports for online trading to €7.6m and the expansion of Microfinance Ireland funding by €13m to €20m for Covid-19 loans with interest rates dropped from 7.8% to 4.5%.

Life sciences and product regulation

• Many manufacturers, including traditionally non-medical manufacturers have been working to mass supply medical devices to assist in the crisis. Regulators are now streamlining the process to allow devices to be put on the market as soon as possible to protect patients, healthcare providers and society. The HPRA has developed a process for the urgent assessment of applications to use non-CE marked medical devices in Ireland during the COVID-19 crisis. The HPRA will assess devices to determine whether the provision of non-CE marked devices is in the interest of the protection of health.

Health business procurement of PPE

• HBS Procurement have been working intensely under increasing pressure in order to manage the supply and replenishment of critical PPE (Personal Protective Equipment) stocks to support the service through COVID-19.
• Under the Umbrella of the Department of Health, HBP have been working collaboratively with suppliers to support the health service through these challenging times and it is important to recognise the extent of this engagement. Businesses that supply health care products can email; procurement@hse.ie and include a specific subject line: Supplier Sourcing Information
• In order to support requirements of COVID-19, HBS Procurement is procuring in accordance with the guidelines outlined in the World Health Organisation Operational Support and Logistics Disease Commodity Packages available here

Decision making by charities

• The Temporary Wage Subsidy Scheme announced by the Department of the Taoiseach in March will support employers in the charities sector to retain staff who are employed under non-exchequer funding sources.
• The Charities Regulator Authority (CRA) has stated that Annual reports which were due to be filed with the CRA on any date from 12 March 2020 to 29 June 2020 inclusive, may now be submitted to the CRA at any time up to 30 June 2020.

Germany

Amending the Foreign Trade and Payments Act

• On 8 April, the Federal Cabinet approved a bill to amend the Foreign Trade and Payments Act. As a measure during the Corona crisis, the Federal Government aims to prevent the outflow of information or technology that could have serious consequences for German public order and security.
• The bill is intended to make the examination of foreign direct investments even more effective – the examination standard will be tightened, closing a crucial regulatory gap.
• In concrete terms, foreign investments will in future be subject to the test criterion of a “probable impairment” of public order or security – in accordance with the EU screening regulation. The Foreign Trade and Payments Act has so far been based on the criterion of “actual and serious threat”.
• In addition, the national investment assessment can in future also take into account possible impairments of public order or security of another member state of the European Union or in relation to projects or programmes of Union interest.
• Furthermore, any acquisition subject to reporting requirements will in future be “pendingly invalid” as long as the investment review is ongoing. The past weeks have shown that the supply of the German population with vital goods such as vaccines can depend on a single company.
• Outflows of information or technology, and thus a legal or de facto completion of an acquisition during the still ongoing examination, should be prevented. So far, this has only been possible in the defence sector. A regulatory and prosecution gap is thus closed.
• The amendment essentially implements the EU Screening Regulation, which came into force in 2019 and for the first time sets out requirements for investment screening at the European level. The regulations apply to the acquisition of company shares by investors from outside the EU.

Loans for small and medium-sized enterprises

• Chancellor Merkel announced in the so-called Corona Cabinet that loans for small and medium-sized enterprises will be secured for a limited period of time with a 100 per cent state guarantee. The maximum limit could be 500,000 euros per company. The state could provide guarantees of up to 300 billion euros.

Federal government ensures co-determination

• The current restrictions resulting from the corona pandemic present practical difficulties and legal uncertainties for the conduct of staff council elections as well as for the basic ability of staff and works councils to act and pass resolutions.
• With a mix of measures, the Federal Government intends to ensure the co-determination of employees even in the current situation.
• Specifically, the federal government plans to amend the Works Constitution Act and the Federal Personnel Representation Act.
• This is intended to expand the possibilities for works councils to pass resolutions, to ensure that staff representatives are able to act and to ensure that the staff council elections are concluded.

South Africa

Mining sector

• Mineral and Energy Resources Minister, Gwede Mantashe, met some unions and the mining industry on Wednesday 8 April to plot a way to keep the crucial sector going, despite lockdown.
• These unions and the government have agreed in principle that 60% to 70% of the mine labour force will go back to work on 16/17 April, with protocols in place to contain the spread of Covid-19. It remains unclear if the national lockdown will be extended beyond then, but the mining industry is planning to reboot as quickly as possible.

Spaza shops and informal traders

• The government initially announced on 2 April that small shops known as spaza could remain open, but only if they were South African-owned and they had to obtain a permit from their councillors before setting up shop.
• On the first day of the lockdown, immigrant-owned shops were already being shut down by police, which caused an enormous social backlash as many informal traders are foreigners and shutting them down not only impacted their ability to generate income, but also impeded vital food supply to people in low income areas.
• The government changed its ruling to include foreign owned traders on 6 April.  It also announced the Spazashop Support Scheme to allow shop owners to buy goods from preselected wholesalers that the government has negotiated discounted prices with. Informal traders/spaza shop owners comprise about 3 million businesses in South Africa.

Social media regulation enforced

• A man who posted a fake video relating to Covid-19, claiming testing kits are possibly contaminated, has been arrested. The video was disseminated through various social media platforms and was in direct contravention of Regulation 11(5)(c) of the Disaster Management Act, in relation to ‘publishing any statement through any medium including social media with the intention to deceive any other person about measures by the government to address Covid-19.  This offence carries a penalty of six months in prison and/or a fine.

UAE

Employee protection measures

• The Ministry of Human Resources and Emiratisation, in cooperation with the Federal Authority for Identity and Citizenship, the Ministry of Foreign Affairs and International Cooperation, the General Civil Aviation Authority, and the National Emergency Crisis and Disasters Management Authority, has launched the ‘Early Leave’ initiative. The initiative aims to enable residents who work in the private sector and wish to return to their home countries to do so during the period of precautionary measures undertaken in the UAE to contain the spread of the new coronavirus, Covid-19.
• The UAE Cabinet, chaired by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, adopted a resolution on Wednesday, April 8, to grant paid leave to select categories of employees at the federal government in light of the ongoing Covid-19 pandemic.

Travel regulation updates

• H. Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman, and CEO of the Emirates Group, had earlier announced that Emirates Airlines will operate flights to bring back all UAE citizens stranded abroad free of cost. Emirates Airline has obtained permits and approvals required to operate a limited number of flights to select destinations. The flights, which began on Sunday, are taking passengers stranded in Dubai to their home countries. Emirates will operate four flights per week to London and three flights per week to Frankfurt, Paris, Brussels and Zurich.
• The Roads and Transport Authority (RTA) today announced its public bus services will be free of charge for individuals permitted to leave their homes during the extended disinfection period. Dubai Taxi vehicles and franchised taxis will in addition offer a 50 percent discount on normal fares.

Disinfection programme continuation

• The Ministry of Health Prevention, MoHAP and the Ministry of Interior, MoI, have announced the continuation of the ‘National Disinfection Programme’, as part of the preventive and precautionary measures taken by the UAE to contain COVID-19. The two ministries said new facilities and establishments would be added to the disinfection plan in all emirates of the country. The Programme will be subject to periodic assessment as per recommendations approved by the World Health Organisation, WHO, and established international practices.
• All community members were urged to stay home from 8:00 pm until 6:00 am the following day, unless absolutely necessary to obtain essential food supplies or medicine or perform essential jobs in vital sectors.

Other

• The UAE has officially proposed that the World Expo 2020 Dubai be moved.  They have put forward a potential start date of October 1, 2021, in light of the coronavirus pandemic. The request was made in a letter addressed to Dimitri S. Kerkentzes, secretary general of the Bureau International des Expositions (BIE).
• The Securities and Commodities Authority (SCA) has provided listed companies with an additional 45 days to file their financial statements of the FY 2019 and Q1 of 2020. To address potential compliance issues stemming from the impact of the coronavirus on investors and capital markets, the SCA has issued a circular informing traders that they have been graced with additional 45 days so that they can report their disclosure statements no later than 14/5/2020 and 30/6/2020 for the FY 2019 and Q1-2020, respectively.

EU

SMEs to receive up to €8 billion in crisis support

• The European Commission in cooperation with the European Investment Fund has announced it will make available €1 billion to be used as special guarantees aimed at incentivising banks and other lenders to provide financing to at least 100 000 European SMEs affected by COVID-19. The guarantees would be used to unlock an estimated €8 billion in financing.
• The funding will be available to SMEs from April onwards and is aimed at overcoming the liquidity crunch, which has hit SMEs particularly hard.
• Interested SMEs can apply directly via their local banks and lenders participating in the scheme.

ESCALAR to help high potential companies grow and expand in Europe

• The European Commission launched ESCALAR, a new investment approach, developed in cooperation with the European Investment Fund. The scheme’s aim is to boost the availability of venture capital and growth financing for promising companies in order to encourage their expansion in the EU.
• ESCALAR will provide up to €300 million to venture capital and private equity funds in the hope of unlocking up to €1.2 billion worth of investments into high potential companies.
• The approach is motivated by the Commission’s desire to reinforce the bloc’s technologic and economic sovereignty. The programme has been in the works for some time, but the launch was expedited by the current crisis according to EU Commissioner for Internal Market and Services, Thierry Breton.

ECB temporarily eases collateral rules

• The European Central Bank (ECB) adopted a package of temporary collateral easing measures in an effort to address the growing liquidity shortages of European lenders. The temporarily increased tolerance is aimed at ensuring the availability of credit to the EU economy.
• The new measures will alleviate the situation of banks across the Eurozone but will have a particular impact on Greek banks, who have so far struggled to raise funds on financial markets due to the poor rating of the nation’s sovereign bonds, which meant they were ineligible for use as collateral for refinancing loans.
• The ECB has stressed that the measures are temporary for the duration of the pandemic and will be re-assessed before the end of the year.

European Commission asks for travel restrictions to be extended until 15 May

• The EU executive has proposed an extension to the current restrictions on non-essential travel from third countries to 15 May (with the possibility for further extension “depending on developments of the epidemiological situation”). The temporary restrictions were first introduced on 16 March for a period of 30 days.
• Schengen Member States and the Schengen Associated States need to approve the measure for it to be enacted.