Investment Funds | Annual Account Derogations
On 26 March 2020, the Chamber of Deputies of the Grand-Duchy of Luxembourg issued a draft law No.7540 (the “Draft Law”) for the purposes of introducing temporary derogations from accounting requirements for financial sector entities, including funds, in the context of the fight against the COVID-19 virus.
The temporary derogations concern only deadlines relating to a financial year closed on the date of the end of the state of crisis and for which the deadlines for filing and publication had not expired on 18 March 2020.
For investment funds, the proposed derogations included in the Draft Law are the following:
- First, by way of derogation from Article 23(2) of the amended Law of 15 June 2004 on investment companies in risk capital (“SICAR”), an extension period of 3 months is granted to make available to investors the annual report together with the auditor’s certificate.
- Furthermore, by way of derogation from Article 52(2) of the amended Law of 13 February 2007 on specialised investment funds (“FIS”) and from Article 38(2) of the amended Law of 23 July 2016 on reserved alternative investment funds (“RAIF”), an extension period of 3 months is granted to make available to investors the annual report.
- Finally, notwithstanding Article 150(2), subparagraph 2, of the amended Law of 17 December 2010 concerning undertakings for collective investment (“UCITS”), an extension period of 3 months is granted for the publication of the annual and semi-annual reports.
In addition the Draft Law allows the CSSF to postpone by three months the deadline for the filing of other periodic reports, not referred to in this Draft Law, required by any of the laws where it acts as supervisor.
There is also before the Parliament a draft law No.7541 which will allow commercial companies to benefit from an extension period of 3 months for filings and publications with the Luxembourg Register of Commerce and Companies.
COVID-19: What is the Impact on the Free Movement of Persons?
The coronavirus has spread around the globe and the scale of the threat faced today underlines the imperative need for coordinated restriction measures on the free movement of people at the European level, in order to maximise the potential impact of measures taken at the national level to fight the pandemic.
However, while 14 Member States (Luxembourg excluded) have notified the European Commission of their decision to temporarily reintroduce border controls to limit the spread of the COVID-19, it remains imperative that certain categories of cross-border workers be able to travel to their workplace without constraint or delay.
It is in this context that the European Commission adopted on 16 March 2020 a communication calling for temporary travel restrictions applying to all non-essential travel from third-countries to the European Union (the “EU”), including Member States of the European Economic Area and Switzerland (the “Associated States”). On 30 March 2020, the European Commission also published guidelines on how to implement these temporary travel restrictions (the “Guidelines”).
Following the endorsement by EU leaders, all EU Member States are now applying these restrictions.
Temporary restrictions for non-essential travels
Pursuant to the European Commission recommendations and guidelines, the temporary travel restrictions should apply to all non-essential travels from third-countries to the EU and the Associated States.
More particularly, the restrictions on non-essential travels shall concern non-resident third-country nationals where they present relevant symptoms or have been particularly exposed to risk of infection and are considered to be a threat to public health.
In this respect, if a refusal decision is issued by a border guard, it must state the precise reasons for the refusal and be given by means of a standard form (available under Annex V Part B of the Schengen Borders Code).
In addition, any refusal decision must be proportionate, non-discriminatory and implemented in a way that ensures full respect of the human dignity of the persons concerned.
Exemption for EU citizens and residents
EU citizens and third-country nationals legally residing in the EU shall however be exempted from these restrictions. Member States shall indeed always admit these individuals on their territory for the purpose of returning home. Member States can however take appropriate measures such as requiring non-nationals entering their territory to undergo self-isolation or similar measures upon return from an area affected by COVID-19, provided they impose the same requirements on their own nationals.
Free movement of certain categories of workers
As many of the cross-border and posted workers are crucial for their host Member State (e.g. in the health care system, provision of other essential services such as medical equipment or supply of goods), unhindered movement across borders is essential for them. Indeed, restrictions applied to these workers could lead to additional difficulties or even hinder efforts to fight the COVID-19 crisis.
Consequently, cross-border and posted workers (including workers using a Member State only as a transit country to reach another Member State) as well as seasonal workers shall benefit from continued and free mobility, and Member States should allow these workers to have unhindered access to their place of work if they exercise:
- one of the critical occupations listed in the Guidelines (non-exhaustive list); or
- other activities still allowed in the host Member State; or
- seasonal activities in particular in the agricultural sector.
To ensure free mobility of these workers, Member States (in particular those that have temporarily reintroduced border controls) should establish burden-free and fast procedures for border crossing points regularly used by these workers (such as dedicated lanes or specific stickers).
In addition, health screening, which can only be carried out before or after the border, should not necessitate the workers to leave their vehicles (e.g. by electronic body temperature measurement, which should not be carried out more than three times within the same day).
Related national measures implemented in Luxembourg
In light of the Commission recommendations, the Luxembourg Government adopted a grand-ducal regulation on 18 March 2020 introducing a series of measures in the context of the fight against COVID-19 (the “Regulation”).
The Regulation provides that third-country nationals may no longer enter the territory of Luxembourg from 18 March 2020 at 18.00 for a renewable period of one month. In this regard, in order to be in line with the European recommendations, the Luxembourg government could clarify the conditions under which a decision to refuse entry to the Luxembourg territory may be issued.
Citizens of the EU and the United Kingdom (who must be treated in the same way as citizens of the EU until the end of 2020), as well as their family members, are however excluded from these temporary travel restrictions for the purposes of returning home, in accordance with the European Guidelines.
Derogations are in addition provided, in particular, for:
- cross-border workers;
- third-country nationals who have long-term resident status, as well as any other person with a right of residence in accordance with European directives and national law in Luxembourg or one of the neighbouring countries;
- health professionals, health researchers and professionals involved in the care of the elderly;
- persons employed in the transport of goods and persons, including airline personnel;
- members of the diplomatic corps, personnel of international organisations, military personnel, personnel in the field of development cooperation and humanitarian aid, in the exercise of their respective functions;
- passengers in transit;
- passengers traveling for urgent and duly justified family reasons.
Situation of third-country nationals already in Luxembourg
The Regulation furthermore provides that, by way of derogation from the Law of 29 August 2008 on the free movement of persons and immigration, the validity of visas, temporary residence permits, residence cards and residence permits, due to expire after 1 March 2020, is automatically extended for the duration of the state of emergency (which has been extended for three months by a law of 24 March 2020).
Similarly, the stay of third-country nationals not subject to visa requirements whose stay has just exceeded 90 days will be considered legal for the duration of the state of emergency.