Legal aspects of the coronavirus
We now find ourselves in a time of uncertainty and severe challenges for both individuals, businesses, and society at large due to the ongoing coronavirus (COVID-19) outbreak. Health aspects naturally take precedence, but it cannot be ignored that the situation will also have other negative effects on both an individual and structural level.
We are attempting to handle these matters internally in a humane and professional manner, and our thoughts go out to clients, partners, and others who are experiencing difficulties at this time.
The Swedish government and several authorities have taken extraordinary measures to protect people’s health.The Riksbank has adopted an action program that aims to, inter alia, provide liquidity to ensure that companies continue to have access to credit. Example of measures include corporate lending via banks and the purchase of corporate bonds and commercial papers.1)
On an EU level, significant measures have been taken, or have been proposed, such as EUR 37 billion in support measures directed at the healthcare sector, companies, and the labor market. In addition, concessions from the application of the legal framework for government aid have been announced.2) In addition, the European Investment Bank has offered liquidity assistance to help small and medium-sized companies with a crisis package of up to EUR 40 billion. The European Central Bank also announced a EUR 750 billion pandemic emergency program for the purchase of public and private securities.3) Depending on the development, additional measures from the public sector may be required.
Thus far, Wistrand’s clients have been impacted in various ways and to varying degrees. Lately, Wistrand has worked closely with our clients with the purpose of minimizing the risks that arise in the best way possible.
Wistrand is a full-service law firm, and we expect that coronavirus-related questions will have a strong impact on our activities within most areas of law for some time to come. Through our counsel, all our clients benefit from the experience we have accumulated in a short amount of time, and that will help our clients to correctly navigate the legal issues that arise.
In the current, unfolding situation, new rules shall be considered together with existing legislation, both on an international and local level, and it is crucial to have a solid understanding of these in order to quickly and resolutely generate sustainability for companies using the available options.
With respect to the measures taken and proposed by the Swedish Government aimed at business owners until 4 May 2020, the following may be noted: 4)
1. New rules on short-term layoffs for reduced total payroll
2. Support for businesses based on loss of turnover
3. Temporarily lowered employers’ social security contributions and individual contributions
4. Temporary discount for fixed rental costs in vulnerable sectors
5. Increased provision for tax allocation reserves
6. Central government assuming greater sick pay responsibility
7 Respite for tax payments regarding employers’ social security contributions, preliminary tax on payroll and VAT.
8. Central government loan guarantee program for small and medium-sized companies
9. Increased loan facilities for companies via Almi, the Swedish Export Credit Agency (EKN), and Svensk Exportkredit (SEK)
10. State credit guarantees to airlines
11. Increased scope for Almi Invest to be an active investor in innovative companies
12. Temporary rules to facilitate annual general meetings for companies and associations during the virus outbreak
In summary, there are a number of options available to companies for handling the difficult situation that has quickly evolved. It is important that you act quickly, in a structured manner, and use the regulations to maximize the benefit thereof.
On Wistrand’s website, a number of articles have been published. These cover a selection of business law issues that arise due to the coronavirus.
Wistrand has appointed a task force focusing on corona-related questions. The group, which is made up of legal professionals with different expertise from both offices, offer advice on, inter alia, force majeure in agreements, insurance coverage options, labor law issues, and insolvency. We monitor and analyze the current development, both in Sweden and globally. The group tracks and evaluates decided and planned government actions (such as, for example, the deferment of tax payments and changes to labor laws). In this way, we can ensure that we at Wistrand are able to assist clients facing grave challenges related to the coronavirus on short notice and with a high level of expertise.
The Stockholm Corona Task Force consists of
Jörgen Eklund, jorgen.eklund@wistrand.se
Christian Bergqvist, christian.bergqvist@wistrand.se
Jakob Bernander, jakob.bernander@wistrand.se
Anders Öhlin, anders.ohlin@wistrand.se
Marek Keller, marek.keller@wistrand.se
Johanna Müller, johanna.muller@wistrand.se
The Gothenburg Corona Task Force consists of
Maria Kosteska Fägerquist, maria.kosteska.fagerquist@wistrand.se
Jörgen Wistrand, jorgen.wistrand@wistrand.se
Sara Fager Hultqvist, sara.fager.hultqvist@wistrand.se
Viktoria Hybbinette, viktoria.hybbinette@wistrand.se
1) The Riksbank. 2020. The Riksbank to increase asset purchases and take measures to facilitate credit supply. https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/press-releases/2020/the-riksbank-to-increase-asset-purchases-and-take-measures-to-facilitate-credit-supply/ (Retrieved 2020-03-17).
2) European Council, 2020. Statement on COVID-19 economic policy response. https://www.consilium.europa.eu/en/press/press-releases/2020/03/16/statement-on-covid-19-economic-policy-response (Retrieved 2020-03-17).
3) European Union. 2020. The common EU response to COVID-19. https://europa.eu/european-union/coronavirus-response_sv (Retrieved 2020-05-04). English version: https://europa.eu/european-union/coronavirus-response_en
4) Government Offices of Sweden. 2020. For business owners due to COVID-19 https://www.government.se/articles/2020/03/economic-measures-in-response-to-covid-19/ (Retrieved 2020-05-04).