Source: https://www.ashurst.com/en/news-and-insights/legal-updates/general-legal-framework-and-administrative-measures-adopted-in-relation-to-covid-19-crisis-in-spain/
Timestamp: 2020-05-29 17:26:23
Document Index: 207828922

Matched Legal Cases: ['art. 1', 'art. 86', 'art. 116', 'art. 6', 'art. 43', 'art. 42']

General legal framework and administrative measures adopted in relation to the impact and management of the COVID-19 crisis in Spain | Ashurst
ASHURST SPAIN - COVID-19 08 May 2020 General legal framework and administrative measures adopted in relation to the impact and management of the COVID-19 crisis in Spain
1.	WHAT KIND OF REGULATORY MEASURES HAVE BEEN TAKEN?
The management of the COVID-19 health crisis has generated an immense amount of regulatory activity, both from the Government and the Central Administration, as well as from the Autonomous Regions and local authorities.
There is a first key distinction between:
(a)	the Royal Decree declaring the state of alarm, Royal Decree 463/2020, of 14 March, declaring the state of alarm for the management of the health crisis situation caused by COVID-19 (RD 463/2020), which has already been modified in some cases simply to extend the state of alarm or to establish certain conditions for informing the Parliament (Royal Decrees 476/2020, 487/2020), in others to introduce substantive modifications affecting the declaration of such state (Royal Decrees 465/2020, 492/2020 and 514/2020); and
(b)	the remaining regulations approved, all of them with a hint of exceptionality and most of them on a provisional basis, both by the State and by the Autonomous Regions and local authorities. In this Note we focus on State measures, the most important being the successive Royal Decree-laws (RDL), which adopt urgent measures to respond to the economic and social impact of COVID-19, namely: RDL 7/2020, of 12 March; RDL 8/2020, of 17 March; RDL 9/2020, of 27 March, adopting supplementary measures in the field of employment; RDL 10/2020, of 29 March, regulating recoverable paid leave for employees not providing essential services, in order to reduce population mobility in the context of the fight against COVID-19; RDL 11/2020, of 31 March, adopting additional urgent measures in the social and economic field; RDL 12/2020, of 31 March, on urgent measures for the protection and assistance of victims of gender violence; RDL 13/2020, of 7 April, adopting certain urgent measures in the field of agricultural employment; RDL 14/2020, of 14 April, extending the deadline for the submission and payment of certain tax returns and self-assessments; RDL 15/2020, of 21 April, on urgent complementary measures to support the economy and employment; RDL 16/2020, of 28 April, on procedural and organisational measures to deal with the COVID-19 in the area of the Administration of Justice; and RDL 17/2020, of 5 May, approving measures to support the cultural sector and of a tax nature to deal with the economic and social impact of the COVID-19.
The regulatory basis of RD 463/2020 is based on the two causes that justified the declaration of the state of alarm: health crises, such as epidemics; and situations of shortage of basic necessities (articles 4, b) and d), Organic Law 4/1981, of 1 June, on states of alarm, exception and siege [LO 4/1981] and 1 RD 463/2020). On the other hand, the measures to be adopted in the states of alarm will in any case be those strictly indispensable to ensure the re-establishment of normality and their application will be in proportion to the circumstances (art. 1.2 LO 4/1981).
The enabling title of the successive Royal Decree-Laws is found in the reasons of extraordinary and urgent need that lead to the approval of each of them (art. 86.1 of the Constitution [CE]).
2.	WHAT IS THE IMPORTANCE OF RD 463/2020, WHICH DECLARES THE STATE OF ALARM, ITS RELATIONSHIP WITH THE OTHER APPROVED REGULATIONS AND ITS WAYS OF CONTROL?
The importance of RD 463/2020 is obviously due to its constitutional and extraordinary nature. It is a unique royal decree, foreseen in the Spanish Constitution itself (CE, art. 116.2) and in Organic Law 4/1981 of 1 June on states of alarm, exception and siege (LO 4/1981, art. 6). Both of these and their successive modifications, the Government must report to the Congress of Deputies, "meeting immediately for this purpose" (arts. 116.2 CE and 8 LO 4/1981).
It is an eminently decisive or declaratory Royal Decree (it declares the state of alarm) and whose rank and relationship with other regulations are therefore not univocal. Thus, although it is formally approved by the Cabinet, its force exceeds that of regulations (e.g. it suspends legal deadlines and even limits fundamental rights).
It is also significant in this regard that the Government, as the authority competent to declare the state of alarm, has enabled itself to modify the scope of such declaration (RD 463/2020, second final provision), as it has indeed already done.
On the other hand, it can be said that the Government acts, in approving this Royal Decree, as the head of the global State and not only of the Central Administration. This is the only way to explain why RD 463/2020 ratifies the provisions and measures adopted by the competent authorities of the Autonomous Regions and the local authorities on the occasion of the COVID-19 coronavirus, "which will remain in force and produce the effects envisaged in them, provided that they are compatible with this Royal Decree" (first final provision). This is an equally exceptional ratification or consolidation, as the expository part of the Royal Decree explains: "The temporary measures of an extraordinary nature that have already been adopted by all levels of government must now be intensified without delay to prevent and contain the virus and mitigate its health, social and economic impact".
Finally, the Royal Decree declaring the state of alarm has been qualified as a decision or provision with the rank or value of law (Constitutional Court Ruling 83/2016). This Ruling establishes the following with respect to the possibilities of control of this Royal Decree and the acts dictated in its application:
The control by the constitutional jurisdiction of the Royal Decrees declaring and extending the state of alarm does not exclude the jurisdictional control by the ordinary courts of the acts and provisions dictated in its application during the validity of the state of alarm.
Likewise, the affected persons may file an appeal for constitutional protection (recurso de amparo), after exhausting the ordinary judicial process, against the acts and provisions dictated in application of this Royal Decree when they consider them to be harmful to fundamental rights or public liberties susceptible of protection through this constitutional process.
3.	WHAT ARE THE DURATION AND EFFECTS OF THE STATE OF ALARM?
The state of alarm is declared throughout the national territory for fifteen calendar days (from 14 to 29 March 2020), having been subsequently extended four times with the authorisation of the Congress of Deputies (currently until 24 May 2020).
Its scope involves a good number of matters that are based on the two causes that justify the declaration of the state of alarm, above mentioned: health crises, such as epidemics and shortages of basic necessities. This explains why the competent authorities (Government delegates) are the Ministries of Health, Defence, Home Office and Transport, Mobility and for the Urban Agenda.
The most intensive measures are those limiting freedom of movement, or property (possibility of imposing seizures, "in particular for the provision of security services or critical and essential operators") and personal freedom (possibility of imposing the performance of forced personal obligations "essential for the achievement of the purposes of this royal decree").
As the more general aim of the Royal Decree is to contain the health epidemic, various "containment" measures are envisaged, consisting either of the suspension of face-to-face educational or training activities (thus ratifying the provisions of several Autonomous Regions in their field), or of commercial, hotel and cultural activities open to the public, or of the conditioning of attendance at places of worship or civil and religious ceremonies, depending on the size and characteristics of such places.
Specific measures are also laid down in the four areas of competence of the delegated authorities, namely: measures to strengthen the National Health System throughout the national territory (with all public administration health authorities reporting directly to the Minister of Health); measures to ensure the supply of goods and services necessary for the protection of public health; measures in the field of transport; and measures to guarantee food supplies (including the intervention of enterprises or services and the mobilisation of the State security forces and the armed forces).
The regulation is completed with the provision of the penalty system and the establishment of measures for customs transit, the critical operation of essential services and the guarantee of the supply of electrical energy and oil and natural gas products (an extension on these last aspects can be seen in the section of this Note relating to specific measures in the field of energy).
4.	WHAT DOES RD 463/2020 PROVIDE FOR THE SUSPENSION OF PROCEDURAL DEADLINES?
In general, in all jurisdictions, terms are suspended and time limits provided for in procedural laws are suspended and interrupted. The calculation of the time limits will be resumed at the moment that the RD 463/2020 or, in its case, the extensions of this one, becomes out of force.
There are special measures for the criminal justice system, and the suspension ("interruption") mentioned above is excluded in those cases of particular gravity where the interest in continuation is understood to be predominant: procedures for the protection of fundamental personal rights - in contentious-administrative matters; procedures for collective conflict and the protection of fundamental rights and public freedoms - in the social jurisdiction; judicial authorization for non-voluntary internment on grounds of mental disorder; and measures for the protection of minors - in the civil jurisdiction. Furthermore, it may always be agreed to take any legal action necessary to avoid irreparable damage to the rights and legitimate interests of the parties to the proceedings.
In turn, the periods of limitation and expiration of any actions and rights have been suspended under the same circumstances.
An extension of these aspects can be seen in the section of this Note relating to procedural and insolvency issues.
5.	WHAT DOES ROYAL DECREE 463/2020 ESTABLISH REGARDING THE SUSPENSION OF ADMINISTRATIVE DEADLINES?
In general, the terms are suspended and the time limits for the processing of procedures by public sector entities are interrupted; the calculation of which will be resumed at the moment that RD 463/2020 or, if applicable, its extensions are out of force.
This suspension applies to the public sector understood as the Central Administration, the Autonomous Regions, the local authorities and the institutional public sector (constituted, in turn, by the public bodies and public law entities linked to or dependent on the public administrations, the private law entities linked to or dependent on the public administrations when they exercise administrative powers and the public universities).
However, the competent body may, by means of a reasoned decision, establish that the time limit shall not be suspended and determine the measures of organisation and instruction strictly necessary to avoid serious harm to the rights and interests of the interested party in the proceedings, provided that the interested party agrees that the time limit shall not be suspended.
6.	WHAT IS THE RELATIONSHIP BETWEEN THE ADMINISTRATIVE TIME LIMITS SUSPENDED BY RD 463/2020 AND OTHER SPECIFIC TIME LIMITS?
6.1	Relationship between time limits
A first and obvious consideration is that the suspension of deadlines does not affect those provided for by the Royal Decree that declares the state of alarm. However, this declaration of pure common sense, which initially appeared in RD 463/2020 (third additional provision, section 4), is repealed by virtue of RD 465/2020 and, in its place, a rule similar to the one mentioned recently is introduced, that is to say, that it will be possible to agree, with reasons, on the continuation of those administrative procedures that refer to situations that are closely linked to the facts that justify the state of alarm, or that are indispensable for the protection of the general interest or for the basic functioning of the services.
In addition, RD 463/2020 expressly leaves out of the suspension of administrative deadlines two cases to which it does not apply: administrative procedures in the areas of social security affiliation, settlement and contributions; and tax deadlines, which are subject to special regulations.
On the other hand, since the date of entry into force of RDL 8/2020, it includes a rule (ninth additional provision) which relates the periods provided for in both regulations: "The suspension of administrative periods provided for in third additional provision of Royal Decree 463/2020, of 14 March, which declares the state of alarm for the management of the health crisis situation caused by COVID-19, shall not apply to the periods provided for in this Royal Decree-Law".
6.2	Specific rules on deadlines in certain areas
Firstly, this is the case of the tax deadlines, which, as was said, are outside the suspension of RD 463/2020 and are subject to specific rules (RDL 8/2020 and RDL 11/2020). An extension on these aspects can be seen in the section of this Note relating to the impact on the tax environment of the RDLs published after the declaration of the state of alarm.
Secondly, this is also the case of bankruptcy deadlines (art. 43 RDL 8/2020), whose relationship with procedural deadlines and their problems are dealt with in the section of this Note relating to procedural and insolvency issues.
Finally, this is also the case, among others, of the rules that determine the suspension of the expiration period of registry entries during the validity of the royal decree declaring the state of alarm (art. 42 RD 8/2020). In this regard, please refer to the section of this Note regarding changes in corporate obligations as a result of the state of alert.
7.	WHAT ARE THE NEW DEVELOPMENTS IN PUBLIC PROCUREMENT?
The first rule established is the generalisation of the emergency procedure for the adoption of any type of direct or indirect measure by the bodies of the General State Administration to deal with COVID-19 (articles 16 RDL 7/2020 and 120 of Law 9/2017, of 8 November, on Public Sector Contracts, which transposes into Spanish law the Directives of the European Parliament and the Council 2014/23/EU and 2014/24/EU, of 26 February 2014 [LCSP]).
In addition, article 34 RDL 8/2020 (modified by RDL 11/2020 and RDL 17/2020) regulates a series of measures applicable to public contracts in force at the time of the entry into force of this regulation entered into by entities belonging to the public sector in accordance with article 3 LCSP (regardless of the public procurement regulations to which they are subject in accordance with the specifications), and to contracts entered into by public sector entities in the so-called special sectors (that is, subject to Law 31/2007 of 30 October on procurement procedures in the water, energy, transport and postal services sectors or to Book I of the recently approved Royal Decree Law 3/2020 of 4 February).
It distinguishes, in turn, according to the three main types of public contracts, namely those for services and supplies (whether for successive or single-tract provision: sections 1 and 2, respectively, of that article); those for works (section 3) and those for works and service concessions (section 4).
The first group provides for the suspension of public service and supply contracts for successive services whose performance becomes impossible as a result of the COVID-19 (except for the cases of continuity in contracting which are provided for when, on expiry of a contract, the new contract guaranteeing continuity of performance has not been entered into). The so-called automatic suspension operates from the moment the situation that prevents its provision occurs and until it can be resumed; which is understood to be when, having ceased the circumstances or measures that were preventing it, the contracting body notifies the contractor of the end of the suspension. In these cases, the contracting authority must pay the contractor for the damages effectively suffered by the contractor during the period of suspension, upon request and with proof of the reality, effectiveness and amount by the contractor in accordance with the procedure provided for in the RDL. In case of partial suspension, the damages to be paid will be those corresponding to the suspended part of the contract.
Such damages may, however, only be those included in the RDL (a rule that raises many doubts, including those relating to its constitutionality): salary expenses including social security contributions (those corresponding to staff affected by recoverable paid leave under RDL 10/2020 will not be considered as compensation but as a down payment for the part corresponding to the hours that are recovered), expenses for maintenance of the definitive guarantee, expenses for rent or maintenance costs of machinery, installations and equipment and expenses corresponding to the insurance policies provided for in the specifications in force at the time of the suspension of the contract. The contracting authority may make advances on the estimated amount of compensation due to the contractor.
In public contracts for services and supplies of non-successive provision, a rule of extension of the contractual period is established. When the contractor offers to comply with his commitments if the initial period or the current extension is extended, the contracting authority will grant it, giving it a period that will be at least equal to the time lost for the aforementioned reason, unless the contractor requests a shorter one. The contracting authority will grant the contractor an extension of the deadline, following a report from the contract's construction manager, which establishes that the delay is not due to the contractor's fault, but is the result of the COVID-19 in the terms indicated in the previous paragraph. In these cases, no penalties will be imposed on the contractor or the contract will be terminated.
With regard to public works contracts, the possibility of suspending the contract at the contractor's request is established, provided that the contract has not lost its purpose as a result of the de facto situation created by the COVID-19 or the measures adopted by the State, and when this situation makes it impossible to continue with the execution of the contract. A possible extension of the final delivery deadline is also foreseen in contracts where, according to the "work development programme or works plan", the completion of the work is scheduled between 14 March (the start date of the alarm state) and during the period of the contract, and as a result of the de facto situation created by COVID-19 or the measures taken by the State, the delivery of the work cannot take place, provided that the contractor offers to meet its outstanding commitments if the initial deadline is extended and that he completes the relevant application form.
Once again, the concepts that can be compensated are limited to those indicated above and, furthermore, the recognition of the right to compensation will only take place when the main contractor provides reliable proof: (i) that both he and the subcontractors, suppliers and providers are up to date with the fulfilment of their labour and social obligations on 14 March 2020; and (ii) that he is up to date with the fulfilment of his obligations to pay his subcontractors and providers on the same date.
In addition, the right to restore the economic equilibrium of the contract is established in public works concession and service concession contracts as a result of the de facto situation created by the COVID-19 (or the measures adopted by the State, Autonomous Regions or local authorities to combat it) by, as appropriate in each case, extending their initial duration to a maximum of 15% or amending the economic clauses included in the contract.
This rebalancing shall in any event compensate the concessionaires for the loss of revenue and the increase in costs incurred, including any additional salary expenses they may have actually paid, over and above those provided for in the ordinary performance of the works or service concession contract during the period of the de facto situation created by COVID-19.
Such compensation shall be paid only if the contracting authority, at the request of the contractor, has established that it is impossible to perform the contract and has provided evidence of the reality, effectiveness and amount of such expenditure, and only in respect of that part of the contract affected by such impossibility.
Finally, the suspension of the terms and interruption of the periods of the contracting procedures promoted by entities belonging to the Public Sector has been lifted as of May 7, 2020, as long as they are processed by electronic means. This measure will be extended to the special resources that apply in both cases.