Decree-Law No. 10-J/2020, of March 26, has approved an exceptional, special regime of personal guarantees of the State, in the context of the COVID-19 disease pandemic. 

In this regard, see also the information available under "Impact on State Aid to Undertakings" .

 

System of public guarantees on new financing:

The law also establishes a special system of personal guarantees by the State and other legal persons governed by public law, including to guarantee credit operations or other financial operations, in any form, to ensure liquidity or any other purpose.

The law further regulates the granting of guarantees referred to in the previous paragraph, within the context of the initiatives, programmes and other support measures adopted within the European Union or under European instruments and mechanisms.

 

Who can benefit from State personal guarantees?

Without prejudice to the granting of guarantees within the context of the initiatives, programmes and other support measures adopted within the European Union or under European instruments and mechanisms, the State personal guarantees may be requested by the following entities:

  • Companies
  • Private social welfare institutions
  • Non-profit associations and other social economy entities

 

What is the procedure for granting State guarantees?

The abovementioned entities may benefit from the provision of State guarantees through the following procedure:

  • Request
    This request shall be addressed to the member of the Government responsible for the financial sector, through the Directorate General of Treasury and Finance. The essential details of the transaction to be guaranteed have to be indicted, in particular, the amount and the deadline. In order to assess the risk of the operation and to define the conditions of the guarantee to be granted, additional elements may be required.  
  • Opinion
    The member of the Government of the area of activity of the beneficiary entity must issue an opinion, his favorable opinion being a necessary condition for the application to be granted.
    The opinion shall focus on the framework of the transaction within four aspects:
    • Government policy to respond to the national economic emergency resulting from the COVID-19 pandemic
    • Relevance of the beneficiary entity to the national economy
    • Prospective economic viability of the entity concerned
    • Express need for personal guarantee from the State 
  • Dispatch
    The essential details of the transactions and the favourable opinion shall be published in an annex to the approval or authorization order and any amendment shall follow the same procedure.
  • Follow-up
    The beneficiary entities or other entities, as defined by the order of the Government responsible for the financial sector, shall regularly send to the Directorate General of Treasury and Finance the necessary details to monitor the transactions that are subject to the guarantee and, as soon as become known, of facts making it impossible to duly comply with the guaranteed obligations.
  • Guarantees within the context of the European Union
    The procedure referred to above applies, mutatis mutandis, to the granting of guarantees within the context of initiatives, programmes and other support measures adopted within the European Union, or under European instruments and mechanisms
  • Regulation
    The member of the Government responsible for finance may define by order other terms and conditions relating to the transactions subject to the guarantee, as well as the respective procedure.

 

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.