Anti-Crisis Shield - key changes related to the financial market
On 26 March 2020, the Parliament received a governmental bill amending the Act on special arrangements for preventing, counter-acting and combating COVID-19, other infectious diseases and crisis situations caused by them and certain other laws (hereinafter the 'Anti-Crisis Shield' or 'the Act'), which is being carried out by the necessary legislative process in an extraordinary manner. Since, in accordance with Article 92 of the Act, it enters into force on the day following its promulgation, with a number of exceptions, including those providing for the retroactive effect of certain regulations, it seems necessary to examine the main solutions provided for in the Anti-Crisis Shield now.
Change the definition of the concept of "Counteracting Covid-19"
In order to assess the scope of application of the Act, it is necessary to refer precisely to the issues relating to the 'COVID-19 counteraction', a concept which, prior to the entry into force of the Act, did not include combating the socio-economic consequences of the epidemic. Therefore, it is worth noting the amendment contained in Article 1, point 1) of the Act, because from the date of entry into force of the Act, also all activities related to the control of the social and economic effects of the SARS-CoV-2 disease will fall within the scope of this notion and will, under the conditions specified in the regulation, be admissible or otherwise affect the sphere of competence of the entities (e.g. give the right to apply for the reliefs and exemptions specified in the Act).
Non-interest-bearing costs of consumer credit
The Act introduces a significant restriction on the possibility of charging consumers for high non-interest-bearing credit costs, limiting them accordingly:
(a) for consumer credit with a repayment period of not less than 30 days to the amount calculated using the formula:
MPKK ≤ (K × 15%) + (K × n/R × 6%)
in which the individual symbols mean:
MPKK - maximum amount of non-interest bearing credit costs,
K - total loan amount,
n - repayment period expressed in days,
R - number of days per year.
(b) for consumer credits with a repayment period of less than 30 days calculated using the formula:
MPKK ≤ K x 5%
in which the individual symbols mean:
MPKK - maximum amount of non-interest bearing credit costs,
K - total amount of credit
At the same time, the total amount of these costs may not exceed 45% of the loan amount, regardless of the financing duration. This means that the legislator has decided to drastically reduce these costs compared to the solutions provided for in Art. 36a of the Consumer Credit Act, where the amount of costs depending exclusively on the amount of the credit has been set at 25%, and depending on the duration of financing at 30% of this amount per year, with a limit of 100% of the credit amount. This will undoubtedly help those who, as a result of COVID-19, will be forced to seek financing from loan institutions, but it will also result in a decrease in the profitability of this type of activity and, in certain situations, may lead to the cessation of the activity by some of the consumer loan companies, which have so far been strongly opposed to further proposals to reduce these costs. The solution will be valid for 365 days from the date of entry into force of the Act, with costs determined in accordance with the current Consumer Credit Act only being charged for the remaining period of outstanding credit.
BGK guarantees and warranties
The Act provides that in connection with the effects of COVID-19 and the purpose of providing financial liquidity to entrepreneurs other than small and micro entrepreneurs, BGK may, upon request in its own name and on its own account, grant sureties and guarantees for the repayment of loans up to 80% of the outstanding loan amount, for a specified period and up to a predetermined amount. These activities may constitute State aid within the meaning of the relevant provisions as they constitute State aid to remedy a serious disturbance in the economy as referred to in Section 3.1 of the Communication from the Commission - Temporary framework for State aid measures to support the economy in the context of the ongoing COVID-19 epidemic (2020/C 91 I/01) (OJ C 202, 7.8.2020, p. 1). (EU C 91I of 20.03.2020, p.1) and can be cumulated with de minimis aid granted in accordance with the provisions of Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (OJ L 352, 24.12.2013, p.1).
Changes in credit repayment terms or dates and export insurance
Pursuant to the Act, the bank will be able to change the terms and conditions or dates of repayment of a loan granted under the Banking Law or a cash loan to a micro, small or medium-sized entrepreneur if the loan or loan was granted before 8 March 2020, and such change is justified by the assessment of the borrower's financial and economic situation made by the bank not earlier than on 30 September 2019. The parties must agree on the terms and conditions of such a change, but it must not cause deterioration of the financial and economic situation of the borrower.
Korporacja Ubezpieczeń Kredytów Eksportowych S.A. will receive instruments enabling, among other things, to cover export insurance also for bank credits, loans or credit limits for issuing guarantees or letters of credit, which is to help Polish entrepreneurs return to foreign markets.
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