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Spain: Coronavirus emergency declared & new measures

Spanish Royal Decree 463/2020 dated 14 March 2020, by which a „State of Emergency” is declared in Spain.

The circumstances of the situation resulting from the Coronavirus / Covid-19 epidemic in Spain have forced the Authorities to take strict measures. Those are mostly set out in Royal Decree 463/2020 of 14 March 2020.

As we write these lines, just one day after publication of the Decree, we cannot avoid many questions to which no clear answer can be provided at this moment; more concrete decisions from the Administration are expected, in order to achieve legal certainty, which is so important especially in as challenging circumstances as those resulting from coronavirus.

The measures set out in this Royal Decree will have effects for at least two weeks. This is the initial period for which the state of emergency has been declared.

The main issues of this Royal Decree with the focus on commercial practice and legal needs for companies are:

1. Limitation of the freedom of movement for all citizens, who will have the right to move within Spain only under certain circumstances such as: 

a.  To go to a doctor and for assistance at health centres;
b.  To provide assistance and care for the elderly, minors, dependents, people with disabilities or especially vulnerable people;
c.  To travel to workplace to carry out their work, professional or business activities;
d.  To go shopping foods, medicines and first aid products;
e.  To go to bank financial and insurance companies; and
f.  Movement of people due to force majeure or in an emergency.

2. Suspension of all school or university activity.

3. Suspension of all religious activity such as Mass or other ceremonies. Churches are however not closed.

4. Shutdown of all shops and public establishments. Some relevant exceptions have been foreseen such as food shops, supermarkets, pharmacies, petrol stations, tobacco shops and pet food shops.

5. Suspension and interruption – as appropriate – of all the deadlines in court proceedings for the period of the state of emergency, that is to say, for 15 days.  In this regard it was also agreed that no court appointments will take place, except in urgent circumstances.

6. Suspension of all deadlines in administrative proceedings before the Public Administration.

7. Suspension or interruption of the legal period to exercise all rights of action (limitiation periods) belonging to individuals or legal entities for the time of the state of emergency.  This means that in the case any rights that must be exercised against a third party such as a debtor either out of court or before court on or before a deadline, the period of the state of emergency will be not considered for the deadline.

From the commercial legal perspective, the latter suspension (of limitation periods) might rank among the most impactful measures – not only for the near future, but for the next few years. The general limitation deadline to exercise rights in Spain is otherwise 5 years. Depending on the nature of the right, such a deadline may vary from one case to another.

Beyond the above deadlines, there are a lot of other deadlines or fixed periods, which are currently cast into doubt due to the state of emergency; and some uncertainty applies over whether & when potential “force majeure” will apply.  In this regard, for example, there are tax filing & payment deadlines, such as form 720 for declarations of assets abroad and Corporate Law deadlines such as the three month period after Fiscal Year end to prepare the Annual Accounts by Directors.

These measures leave open some questions, that our BMKE team will be pleased to help clarify under such uncertain conditions.

Dr. David Elvira, Partner