NEW LEGISLATIVE AMENDMENTS

IN RELATION TO THE STATE OF EMERGENCY

The state of emergency in the Republic of Bulgaria was extended until 13 May 2020 b a Decision of the Parliament, promulgated in State Gazette issue 33 dated 7 April 2020. Along with this, a Bill for Amendment and Supplementation of the Act for the Measures and Actions During the State of Emergency (hereinafter referred to as “the Bill”) was promulgated in State Gazette issue 34 dated 9 April 2020. The present article shall briefly review the more significant amendments introduced by the above-mentioned Bill.

 I. Change in the Scope of the Compensations for Employers, Paid With the Aim of Protection of the Employment of Employees During the State of Emergency

The Bill provides for a change in the amount of the compensation for employers who have suspended work or have established part-time work as a result of the state of emergency.¹ It is stipulated that the compensation will cover not only 60 percent of the amount of the social security income of each employee, but also 60 percent of the due social security contributions, which are for the expense of the employer. This change will also require an amendment to the Decree of the Council of Ministers No. 55 dated 30 March 2020.

¹ Read more about the criteria and procedure for application for compensations in our article on the following link:

https://www.afa.bg/en/services-12-48.html

II. Terms

1. According to the amendment, during the state of emergency, the procedural terms for judicial, arbitration and enforcement proceedings shall be suspended, except for the explicitly listed terms for proceedings and cases that will continue to be counted during the state of emergency. These proceedings and cases are listed in an attachment to the Bill and the list includes (the listing below is not exhaustive):

• Precautionary proceedings under civil, commercial and administrative cases;

• Perpetuation of evidence under civil, commercial and administrative cases;

• Cases concerning the preliminary enforcement of administrative acts (under Art. 60 and Art. 166 of the Administrative Proceedings Code);

• Cases for disclosure of tax and social security information by the court under Art. 75 of the Tax and Social Security Proceedings Code (TSSPC);

• Requests for suspension of the preliminary enforcement of tax assessment acts under Art. 157 TSSPC;

• Requests for termination of actions performed by an administrative body or official that are not based on an administrative act or the law (as provided for in Art. 252 of the Administrative Proceedings Code);

• The cases under the Public Procurements Act;

• The cases under the Concessions Act;

• The cases under the Management of Assets Under the European Structure and Investment Funds Act;

• The cases concerning appeal of acts for establishment of public receivables;

• The cases concerning appeal of rulings and orders by the administrative court (under Chapter Thirteen of the Administrative Proceedings Code).

 2. Furthermore, the provision which had suspended the terms for compliance with instructions given by administrative bodies within administrative proceedings is repealed.

The terms under items 1 and 2 hereinabove shall not be repealed retroactively.

It is important to note that the terms in criminal, civil, commercial and administrative cases, which pursuant to the new amendments will not be suspended, as well as the deadlines for compliance with instructions in administrative proceedings, will continue to run after 7 calendar days have passed as of the date of promulgation of the Bill in the State Gazette. The legislator's idea is to give citizens and businesses a one-week transition period to adequately prepare the protection of their legitimate interests.

 3. Another significant change in regard of the terms provided for in the Bill stipulates that for the period of the state of emergency only the limitation periods, with the expiry of which the rights of natural persons or legal entities are extinguished or acquired, shall be suspended. The part of the previous text of the provision, which stipulated for the suspension of other terms provided for in normative acts, with the expiry of which rights are terminated or obligations arise for natural persons or legal entities, shall now be repealed.

 4. An amendment is introduced in Art. 4, which now provides an exception to the rule that the terms established by law, related to the exercise of rights or performance of obligations of natural persons or legal entities, as well as the terms of effect of administrative acts, which are limited in time and expire during the state of emergency, shall be extended with one month. As per the amendment, the terms under the following proceedings shall not be extended:

• proceedings for awarding of public procurements;

• concession procedures;

• the proceedings under the Management of Assets Under the European Structure and Investment Funds Act;

• the proceedings under Chapter Three of the State Property Act and under Chapter Three of the Municipal Property Act (expropriation of private property real estate dictated by public or municipal needs);

• the proceedings under the Farmers Support Act;

• the proceedings under the Property and Usage of Agricultural Lands Act;

• the proceedings under the Forestry Act;

• the proceedings under the Common Organizations of Markets in Agricultural Products of the European Union Implementing Act;

• the proceedings under the Veterinary Practices Act;

• the proceedings under the Spatial Development Act;

• the proceedings under the Competition Protection Act.

It is important to note that this change will not be retroactive and will take effect after the expiry of 7 calendar days counted as of the date of promulgation of the Bill in State Gazette. Thus, in practice, the terms were extended for the period from 13 March till 17 April, but after the latter date they continue to run.

 5. An amendment has also been introduced with regard to some of the terms under the Measures Against Money Laundering Act (MAMLA). The following terms, provided for in the latter act shall be suspended until the termination of the state of emergency:

• The terms for adoption by the obliged entities under MAMLA of Internal Rules for Control and Prevention of Money Laundering (Art. 102, Para. 1 and 2 of MAMLA and 6, Para. 2 of the Transitional and Conclusive Provisions of MAMLA);

• Terms for notification to the Director of the Financial Intelligence Directorate of the State Agency for National Security by obliged entities under the MAMLA, who are part of a group and apply policies and procedures on group level (Art. 104, Para. 2 and 4 of MAMLA);

• The terms for establishment of specialized services (Art. 106, Para. 2 of MAMLA), as well as for notification for the assignment or change of the senior management employee for these services (Art. 106, Para. 4 of MAMLA);

• The terms for bringing the Internal Rules into conformity with the requirements of Art. 101 of MAMLA by the obliged entities who have had this capacity during the effect of the repealed MAMLA ( 6, Para. 1 of the Transitional and Conclusive Provisions of MAMLA).

An obligation is provided for with regard to the non-profit legal entities, which do not correspond to any other category of obliged entities under MAMLA and for which the obligation has arisen to prepare Risk Assessment under Art. 98, Para. 4 of the latter act. These entities must adopt Internal Rules for Control and Prevention of Money Laundering within 4 months counted as of the termination of the state of emergency.

 6. The Bill also stipulates that the terms under the following acts shall not be amended: the Financial Instruments Markets Act, the Public Offering of Securities Act, the Activity of Collective Investment Schemes and Other Collective Investment Enterprises Act, the Special Investment Purpose Companies Act, the Financial Supervision Commission Act, the Insurance Code and Part Two of the Social Security Code (Supplementary Social Security). There is an exception of the above with regard to terms for announcement of financial statements and disclosure of financial information, which were extended with the initial enactment of the Act for the Measures and Actions During the State of Emergency.

III. Amendments in the Consequences of Contractual Non-Performance

One of the most important and substantial changes introduced by the Bill concerns Art. 6, the previous version of which provided for the elimination of the consequences of late payment of obligations of natural persons or legal entities, including interest and penalties for late payment, as well as non-monetary consequences such as premature repayment, contract cancellation and seizure of property for the period of the state of emergency. The scope of the provision is now significantly narrowed down and currently the effects of late payment of obligations of natural persons or legal entities will not be applied solely with regard to credit agreements and other forms of financing (factoring, forfeiting, etc.) provided by banks and financial institutions (incl. when the receivables have been transferred), as well as with regard to leasing agreements. Under such contracts interest and penalties for late payment will not be accrued, the obligation cannot be declared prematurely payable and the contract cannot be cancelled due to default, and no property can be seized. This amendment can be considered as a positive step, since the too broad wording of the previous version of Art. 6 virtually eliminated the protection of creditors against non‑performance of pecuniary obligations.

 IV. Remote Adoption of Decisions by Public and Municipal Bodies and Online Court Sessions

 1. Another novelty provided for in the Bill is the possibility for public and municipal bodies, councils, committees and commissions to hold meetings remotely.

 2. A similar situation has been introduced with regard to the courts – open court sessions, including those of the Commission for Protection of Competition, can be conducted remotely, ensuring the direct and virtual participation of the parties and participants in the proceedings. Minutes will be drawn up for the sessions held and the latter shall be published immediately.

 V. Change in the Regime of "One-Day" Employment Contracts

The Bill also provides for a simplification of the regime of the short-term seasonal agricultural employment contracts, provided for in Art. 114a of the Labour Code (LC), better known as "one-day employment contracts".

An opportunity is provided for such contracts to be concluded for more than one day (unlike the provided for in the Labour Code which stipulated that separate contracts are to be concluded for each day of work).

The Bill provides for that during the state of emergency, such contracts may be concluded not only by registered farmers, but also by registered tobacco producers for cultivating crops and harvesting tobacco crops.

These contracts will be drawn up as per a template approved by an order of the Minister of Labor and Social Policy and published on the website of the Executive Agency “General Labor Inspectorate” and will contain information regarding: the parties, the place of work, name of the position, amount of the remuneration, days and months of performance of the work, duration of working hours, as well as the beginning and end of the working day.

 VI. Other Amendments

1. The Transitional and Conclusive Provisions of the Bill also provide for an amendment to the TSSPC, according to which the inaccessible part ² of the employment remuneration, employment compensation, any other remuneration for work, pension or scholarship is at a total amount of one minimum wage monthly.

² The inaccessible part of somebody’s income is that part of the income of a debtor which cannot be subject to enforcement proceedings as regards a claim (within the meaning of TSSPC – public enforcement of a public obligation).

2. An opportunity for the state and municipalities is provided for, which allows them to reduce or remit partially or in whole the instalments under rent agreement and the taxes for usage of real estate, which is state or municipal property, by natural persons or legal entities, who have limited or suspended their activity due to the measures and limitations imposed during the state of emergency.

3. The Bill provides for that the acts of the Minister of Health by means of which temporary measures and limitations are introduced in regard of the state of emergency, shall be subject to preliminary enforcement.

 4. The amount of monetary sanctions for violation of anti-epidemic measures has been reduced in order to increase their collectability, as the previous amounts can be considered excessive (BGN 5,000 for individuals and BGN 15,000 for sole traders and legal entities). The new amounts are as follows:

• for individuals – fine at an amount between BGN 300 and BGN 1,000, and for second violation - from BGN 1,000 to BGN 2,000;

• for sole traders and legal entities – penalty payment at an amount between BGN 500 and BGN 2,000, and for second violation - from BGN 2,000 to BGN 5,000.

The reduced amounts of the sanctions will be applied to the already issued penal decrees, which have not yet entered into force.

This material is not exhaustive, is only of general nature and does not represent a specific advice or consultation. Should any additional questions arise, please do not hesitate to contact us at tel.: 02/943 37 00, fax: 02/943 37 07, е-mail: office@afa.bg or at: 38, Oborishte Str., Sofia 1504.