The Impact of the Coronavirus (COVID-19) on business

COVID-NEW-06

The emergence of COVID-19 in Macedonia, which resulted in a declaration of a state of emergency by the Government, has a strong impact on all companies and industries, creating many challenges that need to be addressed by the employers. Listed below are suggestions and measures adopted by the Government of the Republic of Macedonia and clarification of the key issues and the impact of the coronavirus on businesses.

Obligations for the employers regarding the declaration of a state of emergency as a result of COVID-19
It is recommended for the employers to organize the work of all employees by working from home, depending on the type of work and the ability to perform in such a way.
If the employment contract or the Regulation on the implementation of the employment procedure do not provide work that the employee performs at his home or premises of his choice that is out of the employer’s premises, as a manner of performing work, the employer must decide to organize work from home. If employers cannot organize work from home because of the nature of the tasks performed by the employees, they should:
– if possible, to reorganize work in shifts so there is no downtime;
– to enable holding business meetings by electronic means (video link, video calling, etc.);
– to cancel business trips within the country and abroad;
– to implement strengthened continuously cleaning of the objects;
– to provide protective equipment for the employees;
Regarding the Decision on the prohibition and special regime of movement within the territory of the Republic Macedonia, with which is prohibited the movement of population in the period from 21:00 – 05:00 in order to prevent the spread of COVID-19, the employers who organize the work within the aforementioned period must obtain a Permit for movement of the employee due to shift and night work. The permits for movement are issued based on a completed application form (download here), signed and stamped by the responsible person of the legal entity, and with a memorandum. The permit is valid only for the person to whom it is issued and must be open to inspection by the state organs.

Restrictions for transportation of goods
The transportation of goods will run smoothly under special security protocols, except for a ban on:
– export of flour and wheat;
– export of medical equipment and medical supplies and materials;

Restrictions on the movement of people
An absolute ban on movement of the population in the Republic of Macedonia in the period from 21:00 – 05:00. Additionally, the Government enacted a decision to prohibit the movement of the citizens over 67 years from 11:00 – 5:00, and for young people up to 18 years of age, the ban on movement will start at 21:00, up to 12:00 the following day.

From this ban are excluded:
• People who need emergency medical care / life-threatening condition / persons on dialysis, exclusively accompanied by up to 2 persons (if the vehicle is stopped for police checkpoint, the justification for going out and for the transport to the medical facility will be recorded and checked additionally by submitting medical documentation after the medical examination);
• Members of the Ministry of Internal Affairs (MVR), the Army of Republic of Macedonia, firefighters, waste sector employees, that are currently on shift work;
• Teams on duty of EVN, Water and Sanitation, Telecommunications Services, The District Heating System, only upon prior notice to 192 (MVR);
• Employees who have a necessity to move beyond the limited time and appear on the list prepared by the directors of public health institutions, which they will have to distribute to the Ministry of Internal Affairs or any other Ministry / Institution in order to prepare special passes / IDs.
• Taxi companies with a limited number of vehicles on duty that will be used exclusively for transportation to / from the hospital facility or pharmacy (the taxi drivers are obliged to use personal protective equipment in the vehicle – a protective mask and gloves);
Starting from March 18, 2020, all border crossings in Macedonia have been closed, except for diplomats, doctors, entry and transit of goods vehicles (under special conditions) and other persons to whom the Ministry of Internal Affairs will give an opinion.

The international airport in Skopje is closed, except for:
• State flights
• Military cargo
• Medical flights
• Humanitarian flights
• Empty flights

The intercity and the public transport should be organized by limiting the capacity for transportation of passengers by 50% in the vehicle or compulsory maintaining a distance of at least two meters between the passengers.
The public transport is prohibited from 21:00 to 05:00.
Gatherings of the population in groups larger than five (5) persons in public places and surfaces from 05:00 to 21:00 are prohibited.
Any kind of meetings and events, regardless of the scope and number of participants during this period (cinemas, theaters, playgrounds, museums and other institutions where could be held mass meetings, events or concerts and other cultural – informative events, all sports facilities or workout rooms, catering facilities, cafeterias, bars, restaurants, clubs, casinos and sports betting) is prohibited.

Financial reliefs, subsidies or state aid for a business that is significantly affected by COVID-19
The first set of economic measures will soon be available, as follows:
• Direct financial support of 5.7 million through the Macedonian Bank for Development Promotion (bank loans with an interest rate of 0 percent, a grace period of 6 months, repayment period of 2 years);
• Micro companies, up to 10 employees, can get a bank loan from 3 to 5 thousand euros, small companies with 10 to 50 employees, can get a bank loan from 10 to 15 thousand euro and medium companies with 50 to 250 employees, can get a bank loan from 15 to 30 thousand euros;
• Subsidizing contributions for the employees in companies from the sectors of tourism, transport, catering and other affected companies, for April, May and June of 2020, with a contribution subsidies per employee up to 50% of the average salary in 2019. The subsidy can be used under a condition that the company does not reduce the number of employees under the number of employees in February of 2020 and this shall be valid from the date of the use of the measure. Furthermore, the company should not pay a dividend during 2020, until the date of submission of annual report, i.e. financial statements for 2020, and should not pay a reward bonus after the measure comes into force. Only the companies that have achieved profit as financial results from operations in 2020 will return contribution subsidies of 50% of profit before taxation, which means that the measure is directly geared to help the companies that generated lower financial results in 2020 due to coronavirus;
• Reducing the base interest rate of the National Bank at the level of 1.75% to further reduce the cost of financing enterprises and individuals;
• Decision on credit risk management aimed at facilitating conditions for restructuring of loans to the most affected sectors. Exemption from advance payment of income tax for the companies from industries affected by the corona crisis for April, May and June. These include transport, tourism, hospitality, and then other companies from various sectors affected by the coronavirus.
• The statutory default interest will be reduced by 50% in collaboration with the Ministry of Justice and the penalty interest for public charges will be reduced from 0.03% to 0.015% i.e. by 50%. The providers of cash register maintenance are advised to reduce the prices for maintenance by 50%;
• Postponing the loan payments for companies and citizens affected by the crisis, by paying the April installment in July, which means that there will be a postponement of the payments for three months;

Are COVID-19 is a Force Majeure event and how does it affect the obligations of parties under contracts?
Force majeure means everything that is regulated by the Law of obligations. Force Majeure events are unpredictable natural events, and other events, which were not caused by fault and are beyond the control of the contracting parties, that prevent to a considerable extent or disable the work of the parties. This includes pandemic, as this caused by COVID-19, which can lead to inability to perform obligations under the contracts.
In this case no general advice can be provided, because each contract has different types of conditions.

The current status of the courts and other authorities
Proposed measures that should be adopted by the Government:
• The Judicial Council and the Supreme Court of the Republic of Macedonia should consider the possibility and recommend to the presidents of the courts to make a plan to delay trials with the exception of those court cases in which there is a need of urgent treatment, such as cases that should become obsolete, cases in which is imposed measure detention or other measures to ensure presence, cases in which the right to trial within a reasonable time is infringed, cases where the only thing missing is pronunciation of verdict and cases without a public hearing;
• The Notary Chamber of Republic of Macedonia, the Macedonian Bar Association and the Chamber of Enforcement Agents of the Republic of Macedonia should implement all measures, conclusions and recommendations adopted by the Government.
• Suspension or termination of the Law on enforcement to the end of June. The executors will be obliged to stop taking any enforcement actions. The employers of the debtors and the payment operations carriers are obliged to stop acting on orders issued by enforcement agents by the end of June. This shall not apply in cases where money are already added on the executors’ account and they will be able to transfer the money to the creditors, and in cases when it comes to alimony for children of single parents.

Market restrictions imposed by the government as a result of state of emergency

Price freeze of basic food products including bread, salt, oil, milk and dairy products, eggs, flour, meat, pasta, drugs and disinfectants, except for those where there is evidence of increased incoming invoices. The government made a decision for 100-percent exemption from customs duties for products of flour and wheat, oil sunflower, sugar, soaps, detergents, clothing and clothing accessories, diapers for children and adults and wipes, handmade hats in rolls, plastic masks with textile filter, textile coatings for surgical use, surgical suit paper, paper masks, protective rubber suits, rubber, and other surgical gloves, disinfectants, medical alcohol and protective glasses.

We recommend to follow and respect the government’s measures for the protection of all citizens and the common good. If you need any legal advice about COVID-19, please contact us.

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