Review of legislative changes regarding urgent measures aimed at ensuring the sustainable development of the economy and preventing the consequences of the spread of a new coronavirus infection

Urgent measures to support the economy and citizens of the Russian Federation in connection with the COVID-19 epidemic

Amendments to various laws have been adopted providing for measures to support the economy and citizens of the Russian Federation in the context of the pandemic. Some provisions of
Federal Law No. 166-FZ of 8 June 2020 "On amending certain legislative acts of the Russian Federation in order to take urgent measures ensuring a sustainable development of the economy and preventing the consequences of the spread of the new coronavirus infection" (hereinafter - the “Law”) will be further considered.

1. Lease relationships

The Law provides for benefits to categories of lessees fulfilling the following requirements (hereinafter - the Lessee):

• being a small or medium enterprise (hereinafter – “SME”);
• conducting activities in sectors of the Russian economy most affected by the deterioration of the situation as a result of the new coronavirus infection spread, the list of which has been approved by the Government of the Russian Federation;
• having a lease agreement concluded before the state of high alert or emergency situation was established in the territory of the subject of the Russian Federation.

1.1 Rent reduction and repudiation (termination) of a lease agreement

The Lessee is entitled to claim a rent reduction from a lessor for a period not exceeding one year. If an agreement to reduce the rent is not reached with the lessor within 14 working days after the Lessee has requested a rent reduction, the Lessee has the right not later than 1 October 2020 to repudiate the lease agreement in accordance with the procedure provided by Article 450.1 of the Civil Code of the Russian Federation.

In this case, compensation for damages incurred as lost profits, or damages for termination or repudiation of the agreement stipulated by Article 393.1 of the Civil Code of the Russian Federation, related exclusively to early termination of the lease agreement, other monetary amounts (if in accordance with paragraph 3 of Article 310 of the Civil Code of the Russian Federation the Lessee’s right to unilaterally repudiate the agreement was conditioned upon the need to pay a certain monetary amount to the lessor) are not chargeable to the Lessee, while any security deposit provided for in the lease agreement and paid to the lessor, is not refundable to the Lessee. However, other losses (monetary amounts) are subject to compensation (payment) in accordance with the civil law.

1.2 Lease extension for real estate

The Lessee has the right to request the lessor to conclude in 2020 an additional agreement to extend the lease of real estate (except for land) up to one year. In this case, an additional agreement shall be concluded without bidding or market valuation of the leased property. The lessor shall not be entitled to refuse the Lessee to enter into an additional agreement if the Lessee has properly performed the obligations under the lease agreement before the introduction of a regime of high alert or emergency situation in the territory of the subject of the Russian Federation.

1.3 Lease extension for land

With regard to the lease of a land plot, the Lessee is also entitled to request lease extension from the lessor. The extension term shall be determined by the Lessee, but it may not exceed the period of the land plot lease agreement agreed upon by the parties before its extension, or three years if the term of the agreement is more than three years.

The Lessee has the right to request extension until 1 March 2021, if the following requirements are met:

• the period of the land plot lease agreement has not expired;
• the lessor did not submit a claim to the court for termination of the lease agreement;
• the land supervision authority does not have information on revealed or outstanding breaches of legislation during the use of the land plot.

The lessor shall enter into an additional agreement without bidding within five working days from the date of the Lessee's claim, even if the Lessee has outstanding lease payments.

2. Increase in monthly childcare allowance

Starting from 1 June 2020, the minimum allowance for a full calendar month is increased to RUB 6,752 instead of RUB 1,500 for the care of the first child and RUB 3,000 for the care of the second and subsequent children. The maximum amount will be RUB 13,504 instead of RUB 6,000. The Law establishes the categories of citizens of the Russian Federation for whom, effective from 1 July 2020, an increased monthly childcare allowance is provided:

• mothers, fathers or other relatives, guardians actually caring for a child, dismissed during the parental leave due to the winding-up or termination of the employer's business;
• mothers dismissed during the maternity leave due to the winding-up or termination of the employer's business.

3. Deferred payment of administrative fines for SME

The Law has extended the period for payment of administrative fines from 60 to 180 days from the date of entry into force of the resolution on imposing an administrative fine or from the date of expiration of the period of deferral or extension of the execution of the resolution on imposing an administrative fine for persons who are SME subjects carrying out entrepreneurial activities without establishing a legal entity, and legal entities, as well as directors and other employees of these legal entities.

However, the extended period applies only in 2020 and does not apply to a number of violations, such as:

• violations of sanitary and epidemiological legislation during the period of introduction of restrictions in connection with the spread of the coronavirus infection;
• committing an administrative offence involving road traffic;
• spreading deliberately inaccurate information in the media and on the Internet;
• failure to pay an administrative fine within the period provided for by the legislation on administrative offences.

4. Judicial instalment plan for debtor’s payments in bankruptcy case

The Law establishes the possibility for the debtor subject to the moratorium to use a judicial instalment plan, i.e. to postpone to the future the deadlines for the performance of those debtor’s obligations that are overdue at the time the bankruptcy proceedings are initiated, as well as those reflected in the register of creditors' claims and maturing within one year from the date the respective instalment plan is granted.

The right to an instalment plan is granted to business entities, in respect of which, upon their application submitted to the court during the moratorium, the restructuring (for debtors having the status of individual entrepreneurs) or observation (for debtors having the status of legal entities) procedures have been introduced.

5. New powers of the Government of the Russian Federation

The Law gives the Government of the Russian Federation new powers in various business spheres. In particular, the Government of the Russian Federation receives the right to determine the specifics of conducting general meetings in the form of in-person and absentee voting, to determine the specifics of the organisation of medical assistance in the event of a threat of the spread of diseases dangerous to other people, as well as the procedure for the collection and recording of information on the spread of diseases dangerous to other people, and the composition of such information (including on persons to whom medical assistance is provided and other persons).

The Government of the Russian Federation shall be entitled to extend the time limits for the applicant, rightholder and other person to perform actions related to the registration of inventions, utility models, industrial designs, computer programs, databases, etc., including the time limits for payment of patent and other fees.

Also, according to the Law, in 2020 the Government of the Russian Federation shall be entitled to make decisions stipulating the specifics of licensing, accreditation, certification, state registration, qualification exams and other permitting regimes provided for by the legislation of the Russian Federation.

6. Absentee meetings at non-profit organisations

A decision of the supreme governing body of a non-profit organisation in 2020 may be made by absentee voting (regardless of whether the charter of a non-profit organisation contains a procedure for absentee voting) on the following issues:

• formation of bodies of a non-profit organisation and early termination of their powers;
• approval of an audit organisation or an individual auditor of a non-profit organisation (for non-profit organisations whose annual financial statements are subject to statutory audit).

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