Procedural and other deadlines during a state of emergency

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It took out legislator two weeks to revise and amend the quickly adopted Act on emergency measures and actions (AEMA), announced by a decision of the National Assembly of March 13, 2020, whose initial provisions gave rise to a wide variety of interpretations and ambiguities regarding its application.

During an emergency meeting, which lasted until midnight, the MPs accepted the expected changes in the deadlines. The Act on Amendment and Supplementation of the AEMA, anticipating a number of changes in the original text, was adopted on 06.04.2020, and on 09.04.2020 was promulgated in issue no. 34 of the State Gazette.

As of 09.04.2020, most of the new provisions will enter into force immediately

The envisaged amendments cover a considerable part of the texts of the Act and their application extends to almost all areas of business and government.

After the initial adoption of the AEMA on 24.03.2020, particularly heated debates and numerous disputes triggered the texts regulating the suspension and extension of deadlines. That is why these are the most substantially modified provisions which, in their new “refurbished” version, should more accurately address possible hypotheses and possible contradictions.

Which deadlines will stop running?

According to the original text of the Act on Measures and Actions during the State of Emergency, until the state of emergency is lifted, the procedural deadlines for judicial, arbitration and enforcement proceedings ceased to run.

The newly adopted amendments of 06/04/2020 broadened the scope of cases for which deadlines did not stop running, with the addition covering exceptions to the general rule, which were exhaustively listed in an annex to the Act. The changes were dictated mainly by the increased pressure of society and the business regarding the practically discontinued legal proceedings and, consequently, all civil and administrative turnovers.

The general philosophy/idea of the changes was not to suspend cases whose suspension would cause particular difficulties for the development of economic turnover, cases of particular importance to the parties, whose delay could lead to unfair actions by any of them, and most cases related to acts of the government.

For example, 21 types of criminal proceedings were excluded from the new changes, including measures of deterrence, including those for detention, judicial appeal against such measures, measures for securing a civil claim, etc.

Serious difficulties would also cause the suspension of the rest of the cases, which is why the new changes envisaged to be continued the hearing of 6 types of civil and commercial and 16 types of administrative proceedings.

Other proceedings will also be continued, such as custody cases in terms of provisional measures, permits for withdrawal of amounts from child deposits, all security proceedings and proceedings for securing evidence, the cases under the Tax Insurance Procedure Code for disclosure of tax and insurance information, the cases under the Public Procurement Act, the cases under the Act on concessions and the Management of Funds from the European Structural Funds, etc.). The full text can be found HERE.

The detailed listing of the types of cases/proceedings which will not be suspended, regardless of the state of emergency, has actually answered many of the questions that emerged in the first days after 13.03.2020 and clarified the functioning of the judicial authorities in the next weeks.

Out of the above mentioned, all claim proceedings remain suspended, including special claims, labor and commercial disputes, divisional proceedings, matrimonial proceedings, as well as the overwhelming majority of proceedings related to appealing administrative acts, penal decrees, etc.

In relation to the suspension of the deadlines in most court proceedings, the National Assembly also canceled the judicial vacation in 2020, which is annually announced between July 15 and September 1.

The limitation periods are also ceased

The new text provides for the suspension of “limitation periods with which the rights of private entities are extinguished or acquired “. Thus, from the original scope of the provision, the rather vague part concerning “other deadlines provided for in regulatory acts” and the time-limits for expiry of “termination of rights or obligations for private entities” has been completely eliminated.

The originally foreseen suspension of the deadlines for the execution of instructions given by an administrative authority to parties or participants in proceedings other than those related to the procedures under the Act on the Management of the European Structural and Investment Funds has been completely abolished.

Regardless of the short duration of their application, the quoted texts provoked many questions, which is why the amendment required special precision. In our opinion, all the changes regarding the suspension of the deadlines appear to be justified and clarified. And the application of the new text in the future will show how unequivocal and seamless its interpretation is.

The suspension of some time limits under Anti-Corruption Law and Seizure of Illegally Acquired Property and the Judiciary Act also remained in force.

The amendments shall be implemented immediately, explicitly providing for what is happening with the deadlines that fall under the new exceptions, but have been suspended until now. All of them would continue running after the expiration of 7 days after the promulgation in the State Gazette or as of 17.04.2020. In addition, all actions taken from the declaration of a state of emergency until the entry into force of this Act shall remain in force.

What deadlines are extended during a state of emergency?

Along with the suspension, the Act, in its original form, also provided for certain cases of prolongation by a month of certain statutory procedural terms related to the exercise of the rights and obligations of individuals, as well as the effect of temporary acts of the government and administration. The extension is not valid with respect to the suspended deadlines, which we mentioned above, and beyond these cases it is also not an absolute rule applicable in all cases, and in this direction exactly was the amendment adopted on 06.04.2020.

Until 30.06.2020 important deadlines under the Corporate Income Tax Act are extended, among which are the following important deadlines: the deadline for filing the annual tax return, for filing the corporate tax, for filing the tax on expenses, for declaring the tax on ancillary and ancillary activities within the meaning of the Gambling Act, as well as the deadline for submission of an annual activity report by persons engaged in activities under the same Act and others;

The discount for the advance payment of the real estate tax and the motor vehicle tax can be used for tax payment till 30.06.2020.

The following terms are extended under the Personal Income Tax Act:

– The deadline for payment of the tax on expenses by individuals engaged in business activities as traders has been extended to 30.06.2020;

– Until 30.06.2020, the deadline for filing the annual tax return and paying the due tax by local individuals and individuals engaged in business activities as traders within the meaning of the Act was extended;

– The discount for the declaration submitted electronically shall be used if it is submitted by 31.05.2020.

A significant change, as last amended on 06/04/2020, was introduced in respect of several proceedings which were excluded from the original text of the Act, the important thing here being that the proceedings listed below will not be affected by the state of emergency and should continue to be conducted as usual and according to the time limits provided for in the applicable legislation.

The new amendments of 6 April 2020 provided that the extension of time would not be applicable to the following proceedings:

  • for the award of public contracts,
  • concession procedures,
  • under the European Structural and Investment Funds Management Act,
  • under chapter three of the State Property Act and Chapter Three of the Municipal Property Act,
  • under the Farmers Support Act,
  • under the Ownership and Use of Agricultural Land Act,
  • under the Forest Act,
  • under the Act implementing the Common Organization of Agricultural Markets of the European Union,
  • under the Law on Veterinary Medicine,
  • under the Spatial Planning Act,
  • under the Competition Act,
  • on the relevant by-laws to Acts listed above.

In order not to create tension in the turnover, the legislator has provided 1 week additional or delayed action and this change will come into force on 17.04.2020.

It is important to note that, in addition to the cases listed above, the extension of time limits also remains applicable to those which are suspended for the period of the state of emergency. After its cancellation, the suspended deadlines, which started before 13.03.2020, will be resumed and will continue to run in the remaining part which has not expired at the moment of suspension. All other suspended periods, which should have started during the state of emergency, will begin to run after its cancellation.

Cancellation of the consequences of delayed loan contract obligations

Until the state of emergency is lifted, in case of delayed payment of debts to individuals, debtors under credit agreements and other forms of financing provided by banks and financial institutions, as well as under leasing contracts, no interest and penalties are accrued. Furthermore, the obligation cannot be declared ahead of schedule and the contract cannot be canceled due to default, and no property can be seized. We recommend that you negotiate with your banker and keep him informed of your ability to repay the loan by renegotiating your repayment plan.

This is one of the most widely applicable texts not only for business but for individuals, for whom the current situation could present serious financial difficulties.

In this regard, instructions were also given by the Bulgarian National Bank (BNB) to the banks to develop a package of measures to deal with COVID-19, including a moratorium on credit payments. We, at Murgova and Partners Attorneys at Law, keep an eye on developments on the topic and will keep you up to date with any current information.

Measure 60/40

The measure provoked divergent opinions, but also a great interest among people in the first days after its adoption.

The proposed amendment seeks to strengthen the assistance that the state will provide to the areas of business that are most affected by the measures taken during the state of emergency and to support their survival. Details on the subject of the types of entities which would be able to benefit can be found in one of our previous materials published on the Legal 500 website. Our team is fully available for further clarification on the issues raised in this article, as well as any assistance and advice required in connection with the consequences of the state of emergency declared in the country.

Since deadlines are a topic that is quite broad, we specifically recommend consulting with a lawyer to determine if certain deadlines for your duties have stopped running or have been extended during the state of emergency.

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