This weekly update aims to
inform our readers of the legal and regulatory measures adopted by the Lebanese
authorities to mitigate the impact of the recent Covid-19 outbreak in Lebanon.
Here is the list of measures taken between April 20 and April 27 2020:
1. Central Bank of Lebanon. – Circular n˚553: On April 27, 2020, the Central Bank of Lebanon issued a circular instructing all money changers to abide by an exceptional maximum USD exchange rate of 3200 LBP and prohibiting them from adopting abnormally high spreads on currency exchange operations for a period of 6 months.
2. Ministry of Interior. – Memorandum n˚46/A.M./2020: On April 25, 2020, the Ministry of the Interior issued a Memorandum that prohibits all circulation between the hours of 9 pm. and 5 am. The Memorandum also amended the operating hours of several businesses and allowed several vehicles to circulate without restrictions.
3. Ministry of Justice. – Circular of April 25, 2020: The Ministry of Justice extended the suspension of all Court hearings and the restriction of the activiy of Court regsitries to May 4, 2020. The Circular excludes sentencing hearings, release hearings before criminal Courts and urgent matters from the scope of the suspension.
4. Council of Ministers. - Decision n˚1/2020: On April 24, 2020, the Council of Ministers extended the public mobilization measures to May 10, 2020 and approved a plan to begin lifting lockdown measures progressively over a period of five weeks.
5. Ministry of Industry.- Circular of April 23, 2020: The Ministry of Industry extended the deadline for industrialists to provide information on their stocks and production needs to April 28, 2020. Industrialists must electronically fill out the forms published on the website of the Ministry and submit them by email to firstname.lastname@example.org
6. Lebanese Parliament. – Laws Passed on April 21-21, 2020: On April 21-22, 2020, the Lebanese parliament passed 26 laws.
Among them, the following laws aim to mitigate the impact of Covid-19:
7. Central Bank of Lebanon.- Circular n˚552:
- Law approving the re-allocation of US$40 million under the current Health Resilience Project (US$120 million) to strengthen the capacity of the Government of Lebanon to respond to the Covid-19 crisis by equipping governmental hospitals and increasing their ability to test and treat suspected cases.
- Law authorizing entities listed in Article 32 of the Budget Law of 2020 to grant donations aimed at mitigating the impact of Covid-19.
- Law exempting the aforementioned entities from VAT on the amounts donated to mitigate the impact of Covid-19.
- Law on the suspension of legal, judicial and contractual deadlines.
On April 22, 2020, the Central Bank of Lebanon issued a new circular amending the provisions pertaining to the facilities that may be granted by the Central Bank to commercial banks and financial institutions.
The new circular provides that commercial banks and financial institutions shall grant “exceptional loans” in both Lebanese pounds and US dollars to borrowers who cannot repay loan installments due in March, April, May and June because of the current events.
Here are the main features of the Circular:
- These loans shall be granted to settle the installments of previous loans and/or for settling salaries or covering productive or operational needs of businesses.
- These loans shall be granted without interest rate for a period of five years with a free prepayment option.
- These loans cannot be granted to businesses that were not subject to lockdown measures unless they are able to demonstrate that they cannot repay loan installments because of the current events.
- These loans are to be repaid in the currency in which they are denominated.
- These loans can be granted to customers who did not borrow any money from their bank or financial institution provided that their financial situation has deteriorated because of the current events.
- The Circular prohibits Banks and Financial institutions from applying penalties and fines on overdue payments.
- The facilities granted by the Central Bank of Lebanon are to be calculated in accordance with an “Average” currency exchange rate.
- Each bank or financial institution shall be responsible of ensuring compliance with the provisions of the Circular.
For any additional information about the legal issues raised by Covid-19, please do not hesitate to contact our Firm.