REQUISITIONS MEASURES IN THE CONTEXT OF THE SARS-COV-2 PANDEMIC

Since end March 2020, several municipalities have requisitioned hotels in order to house the homeless for the duration of the lockdown. Considering the urgency and the need to contain the pandemic, additional properties could be requisitioned not only for the homeless but also to shelter people that still need to be in quarantine after leaving the hospital.

WHAT IS A REQUISITION ?

Although there is no legal definition, it is generally accepted that a requisition is the exceptional right of the state to temporarily claim and impose certain services, to request people to perform certain services and to attribute itself certain assets. It cannot be regarded as a normal means of administration, since there must always be exceptional and extremely serious circumstances justifying the requisition. The exceptional and extremely serious circumstances at hand must make it difficult or nearly impossible for the administration to achieve its end by any other means.

The Constitution does not provide any specific protection regime regarding requisitions, as it does for expropriations, however a compensation will be often be provided. Furthermore, the requisition needs to be founded on a legal basis.

WHAT ARE THE GROUNDS FOR THE REQUISITIONS OF IMMOVEABLE ASSETS SUCH AS HOTELS ?  IS THERE A COMPENSATION ?

Articles 11 and 181 of the Civil Security Law of the 15th of May 2007 authorizes the Minister or his delegates, as well as the Mayor and Zone Commander (and/or his delegate officials while intervening) to requisition any natural person and legal entity and  moveable/ immoveable assets alike  for interventions ensuring all missions of the civil security operational services  such as, notably, urgent medical assistance, rescue and assistance to persons in endangered conditions. The refusal or the fact of neglecting to comply with requisition measures is punished by civil penalties or imprisonment sentences (Article 185 of the Civil Security Law of the 15th of May 2007 and Article 422 of the Criminal Code).

The Royal Decree of the 25th April 2014 further implements the execution modalities for the requisitions based on Article 181 of the Civil Security Law and provides a clear framework as to the notification of a requisition order and the compensation to be paid. The compensation may be jointly agreed by the  persons concerned by the requisitions and the government. In the absence of such agreement, the requesting authority shall determine the compensation’s amount and shall notify it to the persons concerned (a specific process applies in case this amount is disputed).

Furthermore, for the missions which are not covered by Article 11 of the Civil Security Law of the 15th of May 2007, the Municipality, in concreto the Mayor, has the power to accommodate a requisition on the legal basis of Articles 133, al.2 and 135,§2,5° of the New Municipalities Law.

These provisions allow the Mayor to issue Police Decrees in the unforeseen events of riots, malicious gatherings, serious disturbances of public peace or any other unforeseen events, where the slightest delay could endanger or harm residents. Within this legal basis the Mayor can execute requisitions on both people as moveable/immoveable assets.

WHAT ARE THE SPECIFIC MEASURES ALDREADY ADOPTED REGARDING PRODUCTS’ REQUISITIONS ?

The Ministerial Decree of the 23rd of March 2020 (hereafter the “MD”) on special measures in the context of the SARS-CoV-2 pandemic, on the basis of Book XVIII of the Economic Law Code, stipulates that :

  • The officials appointed by the competent Minister may requisition certain medical equipment;
  • The requisition order will be signed by the Director-General of the General Directorate of Economic Inspection;
  • In case of requisition, a compensation will be paid for covering the cost price of the product.

The requisition order may concern the following products: surgical and other masks, screening equipment, disinfection wipes for medical use, respirators and associated devices and accessories, sheaths for single-use blood pressure measurement, self-adhesive ECG electrodes, devices used for Broncho alveolar lavage, inhalation chambers, masks bronchoscopes for single use, hydro-alcoholic gels, protective gels, protective goggles and masks, long sleeve gloves, hand alcohol and hydrogen peroxide 12 % and nebulizers.

In the current MD, the Minister refers explicitly to Article XVIII.2. of the Economic Law Code as a legal basis for the measure. This Article enables the Minister to requisition products in the event that unforeseen circumstances of occurrences threaten entirely or partly the good functioning of the economy, and allows these products to be made available to the state, public services or private persons and institutions. The requisition order may be extended to the equipment required for the production, processing, transport, storage of the product or its sale.

COMPENSATION ?

The MD gives no explanation on how to assess the product’s cost price. Is the cost price evaluated in the light of the sale’s price of the assets for the company? Is the loss of revenue to be taken into account ?

In the following days, there is a possibility that another MD will be issued that may derogate from the above-mentioned legal frameworks for requisitions. In order to ensure a quick response to the current Corona crisis, the Parliament voted on two different laws granting the federal government powers that normally are granted to the Parliament.

The CORANAVIRUS impact on HR matters

The Coronavirus is disrupting work relations. New rules have been urgently adopted in recent days to help employers deal with the consequences of government measures imposed to contain the epidemic. Let’s take stock of the HR situation to date.

HOW TO (RE)ORGANISE WORK?

The ministerial decree of 18 March 2020 stipulates:

  • For the majority of employers in the private sector, the obligation:
    • to organise telework for all jobs for which this is possible;
    • if this is not possible, to reorganise the working conditions in the usual workplace (and during transport time, if collective transport to the workplace is provided for, which is often the case in the construction sector) so that everyone can be sufficiently separated (at least 1,5m) from one another (respect for social distancing). How to achieve this? By adjusting fixed working hours, by introducing flexible working hours, by organising rotations, etc.;
    • if this is not possible, to close the workplace.
  • That the above rules do to apply for companies recognised as necessary for the protection of vital needs (this includes health institutions, the media, telecommunication infrastructure, waste collection and processing services, taxi services, fuel suppliers, production chains that cannot be stopped for technical reasons, businesses and companies involved in the food chain, etc.). These companies must nevertheless implement social distancing measures as much as possible. The list annexed to the ministerial decree is restrictive but ultimately includes many companies, which is currently giving rise to discussions between employer and union representatives in several sectors.

As warrantors of health and well-being at work, employers must ensure that risks are assessed and adequate protective measures are put in place, which means, at the very least, in addition to measures ensuring social distancing (desired or imposed):

  • Review the travel and business trip policy so as to eliminate/limit travel and business trips to what is strictly essential;
  • Provide for improved hygiene of the workplace (and work tools);
  • Enable workers to maintain meticulous hand hygiene by providing accessible disinfectants and communicate clearly about this subject;
  • Provide and communicate instructions in the event that a worker shows signs of illness, in particular infection by the Coronavirus, both with respect to the worker him or herself (isolate him or her, safeguard the manner of his or her return home, etc.) and with respect to other workers who have been in contact with him or her (disinfection of the premises, etc.).

A checklist is available on the website of the FPS Employment (https://employment.belgium.be/en)

HOW DOES TEMPORARY UNEMPLOYMENT WORK?

An employment contract that can temporarily no longer be performed due to an unforeseeable event beyond the control of the employer and the employee, is suspended for force majeure. In this case, the employer does not have to pay the salary. Compensation by the National Employment Office (“RVA” / ”ONEM”) (hereafter “NEO”) is possible and is in principle assessed on a case-by-case basis depending on the circumstances.

  • Temporary unemployment because of force majeure

The position of the NEO has progressively eased in recent days to the extent that, on the one hand, it has considerably broadened the scope of application of temporary unemployment because of force majeure and, on the other hand, it has greatly simplified the formalities to access it.

Broader scope of application

Thus, for the period from 13 March 2020 (and until 5 April but extendable until 30 June 2020), a flexible application of the concept of force majeure will be accepted. The NEO has indicated that all situations of temporary unemployment related to the Coronavirus will be considered as temporary unemployment for reasons of force majeure, even if, for example, it is still possible to work on certain days. The NEO explicitly refers to the following situations in particular:

  • Companies in the sectors in which a closure has been imposed by the ministerial decree of 18 March 2020 such as restaurants, bars etc.;
  • Companies that are (partially) closed because they do not have tasks that can be carried out through telework for (all) their workers and they cannot respect the social distancing measures in the performance of the work and in the transport they organise (for example, companies in the construction sector);
  • Companies that suffer production stoppages because they depend on suppliers who no longer deliver;
  • Workers who are quarantined because they have been exposed to contamination;

It seems, moreover, that the NEO considers that, exceptionally, even situations of reduced work following a general drop in activity (reduction in the number of orders, projects, etc.) may be considered as temporary unemployment for force majeure (and no longer as temporary unemployment for economic reasons), provided, of course, that this drop in activity is linked to the Coronavirus epidemic.

It is not required that the company is completely closed down. In practice, this means that some workers may be temporarily unemployed and others may not. Workers can also alternate between unemployment days and working days (however, an unemployment day must be an entire day).

The NEO specifies that an employer who had initially sent a communication of temporary unemployment for economic reasons can thus switch to the regime of temporary unemployment for force majeure (reason: “coronavirus”) without having to complete any further formalities.

Simpler formalities

Exceptionally (and temporarily until 5 April 2020, possibly extended until 30 June 2020), it is no longer necessary to submit a file to the regional unemployment office of the NEO. A simple declaration (Declaration for Social Risk [“ASR” / ”DRS”] scenario 5) via the social security portal site is sufficient.

(Immediate) financial compensation for the workers  

The worker receives, without probationary period, the amount of 65% (increased to 70% until 30 June 2020) of his gross monthly salary (the latter being capped at EUR 2,754.76 gross). In addition, a supplement of EUR 5.63 per day of unemployment is paid by the NEO.

The Minister of Employment has also just announced that workers newly declared to the NEO will immediately receive a lump-sum unemployment benefit of EUR 1,450 per month (for a full time) pending the examination of their files.

The NEO has indeed to examine a considerable number of files. The number of 400,000 files has already been mentioned, which is an unprecedented situation.

  • Temporary unemployment for economic reasons

This regime, which has been simplified as regards to employees by the Collective Labour Agreement (“CAO” / “CCT”) (hereafter “CLA”) n°47 concluded within the National Labour Council (“Nationale Arbeidsraad” / “Conseil National du Travail”) on 18 March 2020, implied requesting the FPS Employment for recognition as a company in difficulty, in particular, in the current context, on the basis of unforeseeable circumstances that lead to a substantial reduction in turnover, production or the number of orders over a short period of time.

This regime allows the use of a total suspension of performance (for a maximum of 16 weeks per year) or a partial suspension of performance (for a maximum of 26 weeks per year), or a combination of the two (within the same limits knowing that 2 weeks of partial suspension is equivalent to one week of total suspension).

However, the FPS Employment has explicitly indicated that during the period of flexible application of temporary unemployment for force majeure by the NEO, it will not take any action on applications for recognition as a company in difficulty, including those submitted since 13 March 2020.

Situations of reduced turnover, orders or production resulting from the Coronavirus epidemic will therefore preferably lead to a request for temporary unemployment for force majeure. It is advised to indicate ‘coronavirus’ in the declaration and not to refer to economic causes.

The regime of temporary unemployment for economic reasons remains applicable to situations where there is a drop in turnover, production and/or orders that are not linked to the Coronavirus epidemic.

EMPLOYERS SUPPORT MEASURES

  • Payroll tax: automatic deferral of 2 months (without fine or interest in arrears). The payment relating to the declaration for the 1st quarter of 2020 is therefore postponed until 15 June 2020. It is also possible to apply for a phased payment plan without a fine (to be introduced by 30 June 2020 at the latest).

We assist employers on a daily basis in understanding and implementing the new measures. The situation is constantly changing. We will keep you informed of future developments.

The CORANAVIRUS’ impact on corporate matters

HOW TO ORGANIZE THE ANNUAL GENERAL SHAREHOLDERS’ MEETING ?

The coming weeks are annual meeting season for calendar-year companies. In the current environment, what are the alternatives to in-person meetings provided by the new Belgian Code on Companies and Associations (“BCCA“)  ?

A first option to consider is to postpone the ordinary (annual) general shareholders’ meeting. In such case, the shareholders must be informed in due time, with a relevant explanation regarding the decision taken by the board of directors to not convene the meeting on the statutory date (breach of the Articles of association). For this breach of the Articles of association, the board could request specific discharge from the shareholders’ meeting.

Companies may also contemplate other options (as long as these options are not in contradiction with the provisions of their Articles of association and are applied pursuant to the BCCA requirements) :

  • vote by proxy (the goal being to limit the number of shareholders attending the meeting). The shareholders can grant a proxy to another shareholder or a third party to attend the meeting in person and vote on his/her behalf. This possibility does not need to be provided for in the Articles of association. Even if the Articles do not expressly mention remote voting, companies could request shareholders to vote by proxy ahead of the meeting.
  • remote vote prior to the shareholders’ meeting. The vote is expressed by letter (for the “SRL/ NV” and the SA / NV” ) or via the company’s website, by means of a form made available by the company (for the SA / NV”). The Articles of association must set out this possibility.
  • participation to the general meeting by way of electronic means of communication  made available by the company (video conferencing, web portal, …). The procedure and conditions for the use of the electronic means must be provided for in the Articles of association. In principle, the participation to the meeting by way of electronic means is solely possible for the shareholders (and not for the bureau, the directors and the statutory auditor)
  • shareholders’ resolutions can also be adopted via unanimous written resolutions. The Articles of association do not need to expressly foresee this possibility. However, this process can neither be applied for shareholders’ decisions that have to be recorded in an authentic deed nor by listed companies.

The companies’ choice will of course depend on their specific situation.

WHAT ARE THE SPECIFIC COMMENTS TO CONSIDER IN THE COMPANIES’ ANNUAL REPORT ?

Depending on the specific circumstances, the current situation could qualify as a material event or as a risk or uncertainty to be mentioned in the annual report.

WHAT ABOUT THE FILING OF THE FINANCIAL STATEMENTS ?

Late filing of the financial statements can lead to penalties. However, in case the late filing is due to an event of “force majeure”, a reimbursement of these penalties can be claimed. For such purpose, the company must evidence the “force majeure” and must claim the reimbursement within 18 months after the closing date of the annual accounts. Whether the coronavirus could be considered as “force majeure” event in this respect will largely depend on the evolution of the situation.

The Belgian government is considering solutions to allow some flexibility and facilitate the organisation of general meetings of shareholders under the current circumstances. We will update this insight when such measures are adopted.

The CORANAVIRUS’ impact on commercial contracts – Covid-19 as an event of force majeure?

The Coronavirus COVID-19 puts mankind to the test in many ways. In addition to countless medical, social and economic issues, several legal questions also arise. This article focuses on commercial law issues and more specifically on how commercial contracts can be affected by this epidemic. What if certain agreements can no longer be executed because of the Coronavirus? Can the Coronavirus be invoked as a case of force majeure (“overmacht”)?

As in most legal matters, the answer depends on the specific circumstances and a case-by-case analysis.

FORCE MAJEURE CLAUSE?

First and foremost, it is important to check whether the agreement contains a force majeure clause.

It is of course very unlikely that the parties would have established a contractual clause in relation to the outbreak of a Coranavirus, but it is possible, for example, that they have included a general clause on the outbreak of epidemics, health issues, government measures, etc.

Such clauses are very important, both because they can extend or limit the possibility of invoking force majeure, and because they can determine the consequences in the event a force majeure would occur.

BELGIAN COMMON LAW

In Belgian law, a force majeure situation allows a party to temporarily or permanently fail to perform its contractual obligation(s) without any risk of liability, because a change of circumstances makes it (absolutely or reasonably) impossible to perform the obligation(s).

This means that to invoke force majeure, the following three conditions must be met:
1) there must be an unforeseeable circumstance,
2) which is beyond the control of the party that is supposed to perform, and
3) which makes the fulfillment of the obligation(s) absolutely or reasonably impossible.

It is important to keep in mind that the burden of proof will lie on the party which fails to fulfill its contractual obligations.

Let’s assess whether the above conditions apply to the Coronavirus crisis:

1) CAN THE CORONAVIRUSCRISIS BE QUALIFIED AS AN UNFORESEABLE CIRCUMSTANCE?

An “unforeseen” circumstance amounts to a situation that could not reasonably be taken into account at the time the agreement was concluded.

At first sight, it seems safe to say that an average person (“bonus pater familias”) could not have foreseen the outbreak of an epidemic of such a magnitude, i.e. a virus which leads to the (semi)lockdown of several countries around the world.

However, in some cases it will be relevant to determine when it became clear that the Coronavirus would have such far-reaching consequences and when the agreement was concluded. If a contract is entered into when the force majeure situation already exists, the debtor cannot invoke it as a valid reason not to fulfill his contractual obligation.

2) IS THE CORONAVIRUS CRISIS BEYOND THE CONTROL OF THE PARTY SUPPOSED TO PERFORM?

The second condition of force majeure implies that the non-performance of an obligation is not caused by the fault of the person who is in breach.

In order for this condition to be met, it is essential to be certain that the coronavirus is the exact reason for the non-performance of the agreement.

For example, the non-execution can be due to the Coronavirus as such (i.e. illness) or due to the measures imposed by the government, the so called “Fait du Prince” (i.e. a governmental intervention, e.g. when the government closes restaurants and bars, leading to the cancellation of several supplier orders). However, in some cases also (personal) precautionary measures (e.g. closing your shop even before it was ordered by the government) could be a legitimate reason for non-performance.

In the latter case, there is of course a higher potential of dispute. It is therefore crucial to maintain a clear communication with the other contracting party at all times. Again, the question whether a judge will accept “precautionary measures” as a force majeure in the context of the Coranavirus will depend on the specific circumstances of the case.

3) DOES THE CORANAVIRUS CRISIS MAKE THE FULFILLMENT OF THE OBLIGATION(S) ABSOLUTELY OR REASONABLY IMPOSSIBLE?

According to part of the Belgian legal doctrine, the unforeseen event must have made the performance of the contract “completely” or “absolutely” impossible. In this view, only insurmountable physical, material or legal impediments are accepted as force majeure.

On the other hand, the majority of Belgian scholars defend a “relative” impossibility. Meaning that a human, reasonable or practical impossibility will be sufficient.

This third condition means that there are no fair, reasonable and practicable alternatives to execute the agreement. For instance, by delaying the performance of the contract, engaging a subcontractor, finding another delivery method, etc.

Regarding the Coronavirus, it is obviously difficult to determine when this “unforeseeable event” will end; hence a delay will not always be helpful. Also the fact that this epidemic affects so many people and companies will in most cases make it very challenging or even impossible to find subcontractors or substitutes to execute the agreement. Nevertheless, even in these extreme circumstances, the debtor must do everything possible to limit the potential negative repercussions of its non-performance.

CONCLUSION

It follows from the above that the Coronavirus should certainly not be considered as a “safe harbor” for not executing agreements or commitments. The question whether the Coronavirus epidemic will qualify as force majeure with respect to your specific agreement depends on many factors, and must therefore always be carefully analyzed on a case-by-case basis.

GDPR-grade consent required by the ECJ for the use of analytics and marketing tracking cookies

Important recent development with respect to the use of tracking cookies for analytics and marketing purposes on websites, further to a judgment of the European Court of Justice (ECJ) in the “Planet49” case on 1 October 2019 (case C-673/17).

Admissible practice prior to the ECJ “Planet49” judgment

Cookies are small text files that are placed on users’ devices to collect information for various purposes, such as to remember a user’s preference, to tailor shown ads and to enable website operators to analyse traffic)

Directive 2002/58/EC, as implemented in national laws of the EU Member States, governs the use of cookies and was due to be replaced by a new ePrivacy Regulation alongside the introduction of the GDPR on 25 May 2018 (ePrivacy Directive). Under the ePrivacy Directive, the placement of cookies can only be based on consent, with the notable exception of “strictly necessary” cookies.

However, no consent pursuant to the requirements of the GDPR (which must be freely given, specific, informed and unambiguous, and must result from a clear affirmative action by the user to be valid) was obtained, as consent was inferred from the silence or the implied conduct of the user (such as the further use of the website), as long as the user was informed about the use of cookies through the use of a cookie banner and a reference to a data protection notice.

Cookies were thus often installed at the time of first access to a website. Such cookies would then immediately start collecting personal data and other information.

Typical cookie banners would read “By pursuing your navigation on the website or closing this message, you agree to our use cookies in accordance with our privacy policy” or “If you continue using our website, we will assume that you are happy to receive all cookies on this website in accordance with our cookies policy”.

Why was such practice largely considered permissible?

Prior to the introduction of the GDPR, it was widely accepted that consent could be obtained through the use of a cookie banner, simply referring users to a cookie or privacy policy and informing users that continuing to use the website implies their consent to the setting of cookies.

Post GDPR, the legal situation in relation to cookies became somewhat unclear because of the fact that the ePrivacy Directive was not replaced yet.

Despite this potential uncertainty, the above practice was still considered acceptable post GDPR by a large number of EU data protection authorities. Indeed, the consent under the ePrivacy Directive was considered different and more easy to obtain than consent under the GDPR, as the implementation of the ePrivacy Directive in the various EU member states does not refer to GDPR-standard consent.

Dissenting views

The European Data Protection Board (EDPB) issued a written opinion in March 2019 addressing the interplay between the ePrivacy Directive and the GDPR. Although not specifically addressed in the EDPB’s opinion, some suggested that the EDPB’s opinion was to be interpreted as meaning that all references to “consent” in the ePrivacy Directive means consent as defined by the GDPR.

In their guidance notes issued in July 2019, the French and UK data protection authorities (the CNIL and ICO) clearly stated (i) that it is the GDPR standard of consent that must be obtained before placing cookies on users’ devices and
(ii) that users must take a clear and positive action to give their consent to cookies (and continuing to use a website does not constitute such as valid consent).

It is worth noting that, on certain aspects, such guidance documents go further than the current draft of the new ePrivacy Regulation (dd. 4 October 2019) which is due to replace the existing ePrivacy Directive (e.g. the current draft permits operators to place first or third party cookies on users’ devices without consent for “audience measuring”, i.e. to analyse traffic passing through their websites for the purpose of optimising the service).

The ECJ “Planet49” judgment of 1 October 2019

The ECJ ruled in its “Planet49” judgment that the GDPR-standard consent also applies to the setting of cookies under the ePrivacy Directive, thereby following the interpretation of the CNIL and the ICO.

Therefore, an active and informed consent is required for placing cookies and profiling technologies including advertising cookies (but not for strictly necessary cookies). Pre-ticked boxes, for example, are not a valid mean to obtain consent.

In addition, the ECJ confirmed that it does not matter whether personal data are collected through the cookies and that consent must be obtained even when the placement of cookies does not involve the processing of personal data.

The ECJ also ruled that the controller should inform users of the lifespan of each cookie and on any third parties access to information collected through such cookies, prior to obtaining their consent.

Practical implications and recommendations

While the ICO and CNIL’s guidance and the ECJ’s “Planet49” judgment may be subject to criticism, it is likely the requirement of a GDPR-standard consent will be confirmed by the future ePrivacy Regulation (with a number of exceptions for certain types of cookies).

Accordingly, a prudent approach would consist in reviewing as soon as possible existing cookies practices, including the manner in which user consent is obtained, along with existing cookie banners, cookies information notices and consent management.

New Belgian law to govern contractual relationships between companies

Recently, the Belgian parliament adopted the Law of 4 April 2019 modifying the Belgian Code of Economic Law (“CEL”) by (i) prohibiting certain unfair, misleading and/or aggressive market practices in a B2B context, (ii) introducing a greylist and a blacklist of clauses in B2B contracts and (iii) expanding the scope of Belgian competition law to also cover abuses of economic dependence. The purpose of the legislator was to strengthen the negotiating position of smaller companies in their vertical relationships with larger companies. The Law of 4 April 2019 will however apply to all contractual B2B relationships.

(i) Misleading and/or aggressive market practices
Entry into force: 1 September 2019

Law of 4 April 2019 copies the already existing provisions in B2C contracts, and now explicitly prohibits the following practices between companies:
– misleading market practices
– aggressive market practices
– all market practices which would encourage an infringement of the CEL.

(ii) Blacklisted and greylisted clauses
Entry into force: 1 December 2020

In addition to misleading and aggressive market practices, the Law of 4 April 2019 introduces the following:
– a general unfairness test, which prohibits contractual clauses creating an obvious (legal) imbalance between the parties (not extended to essential terms of the contract);
– a blacklist, containing the following 4 clauses which will always be prohibited:
o A clause providing that party A is irrevocably bound, while the obligations of party B are subject to a condition at this party’s discretion;
o A clause granting a party the unilateral right to interpret any clause of the contract;
o A clause which, in case of a dispute, leads the other party to waive any legal recourse;
o A clause which provides, irrefutably, that a party has had knowledge of provisions which it could not actually have knowledge of before entering into the contract.
– A greylist of clauses which will be considered prohibited unless (i) it does not create an obvious imbalance, or (ii) such clause was truly desired and knowingly adopted by the parties. These clauses include, a.o., unilateral modification clauses, clauses limiting means of evidence, excessive damage clauses, etc.

For reasons of legal certainty and legitimate expectations, the provisions regarding B2B-clauses will only apply to B2B contracts which are established, renewed or modified after 1 December 2020. Therefore, the black- and greylisted clauses will not be applicable to already existing contracts, unless they are renewed or amended.

(iii) Abuse of economic dependence
Entry into force: 1 June 2020

The legislator has also created an additional category of restrictive competition practices, besides restrictive agreements and the abuse of a dominant position. Businesses will now also be prohibited from abusing a position of economic dependence of another business, by which competition on the Belgian market concerned can be affected (for example: the refusal of a sale).

Importantly, the maximum fine that the Belgian Competition Authority can impose has also been increased. The cap has been increased to 10% of the worldwide turnover of the undertaking involved. This could significantly increase fines in Belgium, given that, to date, fines were capped at 10% of Belgian turnover (including exports), which was favourable for international undertakings.

September 2019 – UBO registry

More than 5 years after the introduction of the UBO registry by the Fourth Money Laundering Directive (EU 2015/849) or “MLD4”, 2 years after the adoption of the coresponding Belgian Money Laundering Act and after two consecutive postponements of the effective date, all Belgian corporate entities and other Belgian legal entities will be obliged to identify their UBOs and upload the required information in the Belgian UBO-Register by 30 September 2019.

While the information obligations of the UBO apply directly to companies and legal entities, it should be noted that the company’s directors may be held liable up to considerable amounts.

Please note while listed companies are excluded to identify their UBO’s in accordance with a recently updated FAQ of the Belgian administration, this exclusion importantly does not apply to daughter companies which are directly or indirectly held by such listed companies with less than 100% of the total shareholding.

Our firm is advising on all UBO matters, and also acts as a representative for companies in timely obtaining all UBO related information, identifying the UBO’s, completing the register as proxyholder and keeping it regularily updated.

 

May 2019 – Verhaegen Walravens supports the Belgian Representation at the Venice Biennale 2019

Verhaegen Walravens is proud to announce that artists Harald Thys & Jos de Gruyter have been awarded a “Special mention as National Participation to Belgium” during the official awards of the 58th Biennale of Venice.

Curated by Anne-Claire Schmitz, the artists’ Mondo Cane installation has received exceptional international recognition for staging an uncanny alternative view of the under-recognised aspects of social relations accros Europe.

Our law firm remains a commited partner and supporter for artists & art alike.

February 2019 – Transitional regime of the new law of companies and associations

The text of the new law of companies and associations has been adopted by the Parliament on February 28, 2019. Existing companies and associations will have to adapt their articles of association (and eventually their other corporate documents (shareholders’ agreements, internal rules, etc.)) to the new provisions of the law.

All legal entities which will be set up after May 1st, 2019, will have to be incorporated according to the new code.

As for the existing companies and associations, the new code will apply according to the following transitional regime:

  • From May 1st, 2019 :
    • Existing legal entities can decide, on a voluntary basis, to apply the new provisions of the code. To that end, an amendment of the articles of association is necessary.
    • The rules relating to the expulsion and withdrawal of shareholders are applicable to the legal proceedings instituted after May 1st, 2019. The current provisions of the companies’ law will apply to the proceedings introduced before May 1st, 2019.
  • From January 1st, 2020 :
    • If the articles of association of an existing legal entity are modified (except if the modification relates to: a capital increase made by the board of directors, the exercise of subscription rights or the conversion of convertible bonds), the company has to modify its articles of association in order to adapt them to the new code.
    • The mandatory provisions of the new code will apply automatically to all legal entities. Default provisions will apply automatically if the articles of association do not provide otherwise.
  • January 1st, 2024 :
    • On January 1st, 2024 all existing legal entities must have complied with the new code (i.e. modification of the articles of association).
      The directors are personally and jointly liable for the damages resulting from failure to comply with this obligation.
    • As from January 1st, 2024, existing legal entities with a company form which is abolished by the new code and which have not modified their articles of association (i.e. société en commandite par actions / commanditaire vennootschap op aandelen, société agricole / landbouwvennootschap, groupement d’intérêt économique / economisch samenwerkingsverband, société cooéerative à repsonsabilité illimitée / coöperatieve vennootschap met onbeperkte aansprakelijkheid, société coopérative à responsabilité limitée / coöperatieve vennootschap met beperkte aansprakelijkheid which does not correspond to the new definition of the société coopérative / coöperatieve vennootschap) are automatically converted into the closest surviving form.
      Following this automatic conversion, the directors must convene a general assembly at the latest on June 1st, 2024 which assembly shall adapt the articles of association. The directors are personally and jointly liable for the damages resulting from failure to comply with this obligation.

 

June 2018 – EU MIPIM PropTech

Anouk De Graef, our firm’s real estate partner, will attend MIPIM PropTech Europe in Paris this 20 & 21 June.

MIPIM PropTech Europe is the premier Property and Tech event in Europe, providing insight to the latest cutting-edge property technology and the future of property in the European market for the industry’s key decision makers.

We look forward to meeting our clients at this important real estate event.