Proposal to change the provision of Article 6 of the Law on measures and actions during the state of emergency, announced by a decision of the National Assembly of March 13, 2020.

MRS ANNA ALEXANDROVA
CHAIRMAN OF THE LEGAL MATTERS COMMITTEE
TO THE NATIONAL ASSEMBLY

ABOUT:  Proposal to change the provision of Article 6 of the Law on measures and actions during the state of emergency, announced by a decision of the National Assembly of March 13, 2020.

DEAR MRS ALEXANDROVA,

In connection with the adopted Law on measures and actions during the state of emergency, announced by a decision of the National Assembly of March 13, 2020, on behalf of the Confederation of Employers and Industrialists in Bulgaria, we are asking you to revise some of the texts of the law . The reason for our request is the number of signals from our member companies, which encounter serious difficulties in their implementation, such as the implementation of Article 6 of the law.

Although the norm was discussed in the context of cases of difficult payment by debtors under bank credit contracts and lease contracts, its final wording suggests that it applies to every single contract between private legal entities. This means that a debtor - a natural or legal person (with the exception of a public entity) who owes payment for a good or a service provided to him, can refuse to pay his creditor without negative consequences for him. In this case, the creditor cannot: charge interest or penalties for delay; cannot declare the contract due in advance; cannot rescind the contract for non-performance.

In the context of the above example, we propose the following specific changes:

1. Proposal to amend and add to Article 6, which should take the following form:

Art. 6. For the duration of the state of emergency, credit and financial institutions within the meaning of Art. 2 and Art. 3 of the Law on Credit Institutions provide an opportunity for their debtors under credit contracts, financial leases or other forms of financing, which are affected by the introduced measures, to temporarily postpone, in whole or in part, the fulfillment of their monetary obligations, such as for the period of the postponement interest and late payment penalties are not charged. For the duration of the state of emergency, early demandability cannot be declared, the contracts under the first sentence cannot be terminated or canceled due to non-fulfillment of the monetary obligations under them, and actions can not be taken to enforce them.

Motives:

The way the text has been adopted means that trade creditors are deprived of the strongest leverage to secure their claims if the debtor stops paying for the good or service provided. From the debtor's point of view, the text justifies not paying for already delivered but unpaid goods or services consumed. Moreover, the work of the judicial system is also currently suspended, which in addition to this text means that the only guarantee for a supplier of goods or services to collect what is due is to demand payment at the time of delivery of the goods/services, which for televisions does not apply.

A problem for business is that, in practice, suppliers of goods and services are deprived of all the available tools that exist in national law to protect receivables for deliveries made, incl. to also seek interest for fun.

As we warned in our previous letter, this has already led to chaos in the trade turnover and more and more customers are taking advantage of this situation and stop paying their suppliers altogether. This vicious practice also leads to the first bankruptcies in the entire spectrum of the economy. There are a lot of complaints from our member companies, who have always been good payers in their commercial relations.

For their part, the suppliers cannot take any action except to stop providing the goods and services or to do so only if they are paid immediately. In some cases this is impossible.

In conclusion we would like to propose in a future ZID of the Law on measures and actions during the state of emergency, announced by a decision of the National Assembly of March 13, 2020 (ZID of ZMDVIPORNS), or at least of the amended and supplemented provision of art. 6 of the ZMDVIPORNS to be given retroactive effect and the ZID of the ZMDVIPORNS or individual provisions of it also enter/enter into force from 13.03.2020 and apply/apply until the state of emergency is lifted.

With respect,

Eugene Ivanov
Ex. Director and member of the Management Board

Sofia March 31, 2020