Member Article

In the context of the COVID-19 pandemic, the Portuguese Government approved Decree-Law no. 10-J/2020, of 26 March (the"Decree-Law") which establishes a moratorium on certain financing agreements with a view to protect the liquidity of companies and families.

1. Beneficiary Entities

The eligible beneficiary entities (the “Beneficiary Entities”) are:

a) companies with registered office and economic activity in Portugal, other than those operating in the financial sector, provided that such companies:

 

i) as of 18 March 2020, were not in breach or default in respect of instalments for more than 90 days (or below the materiality thresholds set out in the Notice of the Bank of Portugal no. 2/2019 and in Regulation (EU) 2018/1845 of the European Central Bank);

ii) are not in a situation of insolvency or suspension of payments or having their credits subject to enforcement procedures;

iii) have no debts to the tax authorities or to the social security;

b) individuals, in relation only to residential loans, who:

i) as of 27 March, are not in default of payment obligations under the relevant loan for more than 90 days (or are not above the materiality thresholds set out in the Notice of the Bank of Portugal no. 2/2019 and in Regulation (EU) 2018/1845 of the European Central Bank);

ii) are not in a situation of insolvency or suspension of payments or subject to enforcement proceedings;

iii) have no debts to the tax authorities or to the social security; and

iv) reside in Portugal,

provided such individuals fall under one of the following situations:

i) are in prophylactic isolation or ill; or

ii) are caring for children or grandchildren; or

iii) their normal working period has been reduced; or iv) there has been a suspension of their employment contract; or

v) are unemployed and registered with the IEFP (Institute for Employment and Professional Training); or

vi) are workers eligible for the extraordinary support for the reduction of the economic activity of self-employed workers; or

vii) are workers of entities whose establishment or activity has closed due to the state of emergency;

c) individual employers, private charities, non-profit associations and other social economy entities, with the exception of those subject to oversight under the Mutualist Associations Code, who:

i) as of 27 March, are not in breach or default of instalments for more than 90 days (or are not above the materiality thresholds set out in the Notice of the Bank of Portugal no. 2/2019 and in Regulation (EU) 2018/1845 of the European Central Bank);

ii) are not in a situation of insolvency or suspension of payments or subject to enforcement proceedings;

iii) have no debts to the tax authorities or to the social security; and

iv) reside in Portugal,

The Decree-Law clarifies that the entities operating in the financial sector, which are outside of the scope as beneficiaries, consist of banks and other credit institutions, financial companies, payment institutions, e-money institutions, financial intermediaries, investment companies, collective investment schemes, pension funds, securitisation funds and their management companies, securitisation companies, insurance and reinsurance companies and public debt management bodies with the same status as credit institutions.

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