Draft Legislation re COVID-19 available

Austrian parliament will be in session tomorrow, Sunday, March 15th, in order to pass legislation relating to mitigating (a) the spread of the coronavirus and (b) the economic impact of the current crisis.

This follows today’s press conference by the government in which several measures were announced. One landmark legislation is the establishment of a 4-billion-euro fund to resolve the financial burden of the crisis. These resources will not be paid out to businesses or employees (at least not entirely) but are inter alia meant to stabilize the health care system, stimulate the labour market and maintain inner security. Furthermore, these funds may be used to

• cushion loss of income due to the crisis
• in connection with measures based on the Federal Act on Epidemics (Epidemics-Act)
• and to stimulate the economy.

The draft does not foresee any specific allocation of the 4 billion euro.

The currently available draft legislation also foresees a “Federal Act on temporary measures to prevent the spread of COVID-19”. This COVID-19-Action Act will authorize the Minister for Social Affairs and Health to pass ordinances prohibiting people from entering (i) business premises or (ii) specific business premises in order to buy goods and services. It will be up to the Minister to decide which businesses will have to close. The supplementary notes to the draft mention that this prohibition to enter certain businesses not only applies to customers but also extends to the economic operators. In other words: based on this act you can be locked out of your own store.

Similar measures could have been taken under the Epidemics-Act. One difference is: The Epidemics-Act also foresees the possibility to claim compensation for damages due to measures under the Epidemics-Act. The COVID-19-Action-Act does not foresee compensation for business owners. It can be argued that some of the funds mentioned above will be directed in that direction.

Additional draft legislation (amendment to the ABBAG-Gesetz) foresees - in short - the possibility to grant aid to businesses with liquidity problems due to the crisis. Such aid will be made available to all businesses with a seat in Austria and main operational activity in Austria. This will include subsidiaries of non-Austrian companies. However, the draft mentions that nobody has a legal claim to such financial aid.

At the time of this publication neither draft legislation has passed parliament. We will continue to monitor this development.