Legal alerts / 15.05.2020

Resumed operations and new measures to support business

When the Russian President’s Decree No. 316 dated 11 May 2020 terminated the ‘non-working’ day regime in Russia and new measures were announced to support the sectors of the economy that have been most affected by the spread of COVID-19[1] (the “Affected Sectors”), the lawyers at Borenius analyzed both the conditions under which companies will be able to resume their operations and the support measures from which they can benefit.

 

Resumed operations

The President’s Decree No. 316 dated 11 May 2020  establishes powers of regional authorities to extend, if necessary, the restrictive measures and to suspend (or restrict, for instance, by determining the employee headcount) the operations of certain companies based on the recommendations of the consumer rights watchdog Rospotrebnadzor and chief sanitary inspectors of constituent entities of the Russian Federation.

Further, Rospotrebnadzor has, in its letters in April 2020, formulated a number of recommendations (the “Recommendations”)[2]. The main Recommendations include the following:

  • deep cleaning of premises and air disinfection with special equipment,
  • daily monitoring of the temperature of employees before they start working and whether they have any respiratory diseases, and providing personal protective equipment to employees (e.g. changing masks and gloves every three hours), as well as equipping wash-basins with antiseptics;
  • marking the space between visitors, restricting the number of visitors and movements of employees during their lunch time;

As Rospotrebnadzor has stressed, companies that resume their operations in accordance with a decision of regional authorities must take these measures into account. The expenses on compliance with the recommendations will be borne by the companies themselves.

 

Moscow

By the Moscow Mayor’s Decree No. 55-UM dated 7 May 2020 (the “Decree”), restrictive measures have been extended in Moscow until 31 May 2020 inclusive. Therefore, all prohibitions that were previously imposed with respect to the operations of companies and visits by individuals to their premises will be preserved.

Starting from 12 May 2020, a list of companies has been established to which visits have been temporarily suspended. Those companies not included in the list may open their offices for visits. Such companies are obliged to meet sanitary requirements established by the Decree which largely coincide with the substance of Rospotrebnadzor’s Recommendations.

Moreover, companies are obliged to decide on determining the headcount of employees and of persons who are employed under contracts for services. Such information (without indicating personal data), including the types of work and the place where such work is done must be sent to: organization_size@mos.ru in the form set out in Annex 4 to the Decree.

 

St. Petersburg

 By the St Petersburg Government’s Resolution No. 276 dated 9 May 2020 restrictive measures in St Petersburg have also been extended until 31 May inclusive. However, the ban has been lifted on visiting organizations that were not covered by the Russian President’s Decree announcing non-working days (all companies except for those that operate continuously, medical and pharmacy companies, companies supplying food products and essential products to the general public, and those engaged in operations in emergencies which cannot be postponed). The ban remains with respect to the supply of services to the public when an individual should be present when such services are provided.

The Resolution recommends (but this is non-binding) that the remote work regime be retained for employees who have already been transferred to work remotely.

Companies that intend to resume their operations when employees attend in person are obliged to do as follows:

  • by 18 May 2020 or before their operations start, ensure that internal regulations are in place establishing a standard for safe operations according to the form approved by the Committee for Industrial Policy, Innovations and Trade of St Petersburg (the “Committee”).
  • notify the Committee of the resumed operations by sending information via a personal account on the website of the Center for Entrepreneurship Development and Support.

 

New measures to support Affected Sectors

Tax write-off: during the Meeting on the sanitary and epidemiological situation held on 11 May 2020, the President of Russia proposed to completely write off taxes (except for VAT) and insurance contributions for Q2 of the current year. This measure will apply to individual entrepreneurs and to small- and medium-sized enterprises (“SMEs”) from Affected Sectors, as well as to socially-oriented not-for-profit organizations.

Preferential loans: The President of Russia further proposed that a special lending programme should be launched starting from 1 June 2020 to support employment. All enterprises from Affected Sectors and socially-oriented not-for-profit organizations will be able to tap into it. The volume of credit will be calculated by the formula of the monthly minimum wage[3] per employee based on a 6-month period. The loan maturity will be 1 April 2021. The final rate for recipients of a loan will be a preferential rate of 2%, the other part will be subsidized by the state. The interest will be capitalized and will not require monthly payments. Moreover, the loan will be secured by a state guarantee up to 85%.

It is worth mentioning that support measures are also being introduced at the level of constituent entities. For instance, in St Petersburg the Plan of priority measures[4] was supplemented on 12 May 2020 with the Plan of additional measures (actions) to ensure the sustainable growth of the St Petersburg economy in the worsening environment owing to the spread of COVID-19[5]. Meanwhile, three packages of measures to support regional business have already been adopted in Moscow[6].

 

[1] See the Russian Government’s Resolution No. 434 dated 3 April 2020

[2] Rospotrebnadzor’s Letters No.02/7376-2020-24 dated 20 April 2020, and No.02/7495-2020-32 dated 21 April 2020

[3] RUB 20,195 in Moscow as approved by the Moscow Trilateral Agreement for 2019-2021 between the Moscow Government and Moscow associations of trade unions and Moscow associations of employers and the Moscow Government’s Resolution No. 1177-PP dated 10 September 2019; and RUB 19,000 in St Petersburg as approved by the Regional Agreement on the Minimum Wage in St Petersburg for 2020

[4] A plan of priority measures to support the economy in combating the coronavirus infection

[5] The second package of measures to support the economy in connection with restrictive measures and prohibitions introduced

[6] Information from the official portal of the Moscow Mayor and Moscow Government dated 24 March 2020, 1 April 2020, and 15 April 2020

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