Finland


Authors:

Antti Säiläkivi, partner at HPP Attorneys Ltd

Rosa Tuominen, associate at HPP Attorneys Ltd

Contact:

E-mail: Antti Säiläkivi, partner, antti.sailakivi@hpp.fi

Overview of legal measures as of 30 June 2020 as response to the COVID-19 (coronavirus). Please note: Due to the extraordinary situation, the legislation is in continuous evolution and may change very fast. HPP Attorneys Ltd does not assume any liability for the accuracy of the information contained in this summary which is subject to change and may not reflect the current legislative or legal position at the time of reading. Furthermore, please note that this document should not be considered as legal advice or relied upon as such, but a merely a general overview of the recent measures and amendments to the Finnish legislation due to the COVID-19 outbreak.

Introduction

The Republic of Finland has a population of approximately 5.5 million. The Finnish judicial system is organized primarily by the Ministry of Justice and consists of independent courts of law as well as administrative courts as well as the prosecution and enforcement authorities. The Finnish legal system is a civil law system.

Finland is a parliamentary republic within the framework of a representative democracy and the single-chamber Parliament exercises supreme legislative authority in the country. Thus, legislative amendments are subject to the final approval of the Parliament even in extraordinary circumstances, such as a pandemic outbreak.

On 16 March 2020 the Finnish Government, in cooperation with the President of the Republic, declared a state of emergency in Finland as a result of the COVID-19 outbreak. Parliament approved the implementation of the Government Decrees related to the application of the Emergency Powers Act. The Emergency Powers Act defines various emergency conditions, including a widespread infectious disease, such as the COVID-19 pandemic. The purpose of the Emergency Powers Act is to secure the livelihood of the population and the national economy, to maintain legal order and fundamental and human rights, and to safeguard the territorial integrity and independence of Finland in emergency conditions. This is the first time the Emergency Powers Act has ever been implemented during peacetime.

On 15 June 2020, based on the situational assessment, the Government determined that the COVID-19 epidemic can be managed using the regular powers of the authorities. The Government issued decrees repealing the use of powers under the Emergency Powers Act and announced that the current situation in Finland no longer constitutes a state of emergency as referred to in the Emergency Powers Act. The decrees repealing the use of powers under the Act and the end of the state of emergency entered into force on 16 June 2020.

The purpose of this document

Our objective within this document is to offer an overall assessment of the situation in Finland prevailing at the date of this summary. The sources used are primarily the Finnish Government and other public authorities. As far as any regulations are referred to, please note that only the Finnish and Swedish language versions have legal force.

Please note that this document should not be considered as legal advice or relied upon as such, but a merely a general overview of the recent measures and amendments to the Finnish legislation due to the COVID-19 outbreak. As the regulations are under constant development, HPP Attorneys Ltd does not assume any liability for the accuracy of the information contained in this summary which is subject to change and may not reflect the current legislative or legal position at the time of reading.

Regulatory amendments due to COVID-19 outbreak

The Emergency Powers Act lays down provisions on the powers of authorities in emergency situations. The powers defined in the Emergency Powers Act can be exercised only if authorities cannot control the situation via regular powers. Under the Emergency Powers Act, the rights and everyday lives of individuals shall be restricted only if this is necessary to protect the population.

Due to the extraordinary circumstances which have arisen in Finland due to the COVID-19 outbreak, the Government has taken several measures concerning issues including, business functions, education, health, transport and mobility and employment in order to hinder the spread of the virus. The aim of the measures is to protect the population and to safeguard the functioning of society and the economy.

Please see sections below for a more detailed summary of specific regulatory amendments.

1. INTERVENTIONS AND RESTRICTIONS

1.1 Legal basis

The Emergency Powers Act

The Finnish Parliament approved the implementation of the Government Decrees of Emergency Powers Act on 18 March 2020 as a result of the emergency conditions arising in Finland due to the COVID-19 outbreak.

The Emergency Powers Act defines various emergency conditions, including an attack on Finland, a particularly serious major accident or a widespread infectious disease, such as the coronavirus pandemic. The purpose of the Emergency Powers Act is to secure the livelihood of the population and the national economy, to maintain legal order and fundamental and human rights, and to safeguard the territorial integrity and independence of Finland in emergency conditions. The decision to adopt the powers laid down in the Emergency Powers Act for a maximum period of six months must be made by Government Decree when the Government, in co-operation with the President of the Republic, has declared that there is a state of emergency in the country. The final decision-making power on adopting the Act rests with Parliament. When doing so, Parliament must decide whether the additional powers laid down in the Government Decree will be adopted in full or in part. Parliament may also decide to repeal the Government Decree.

The decrees repealing the exercise of powers under the Emergency Powers Act and the end of the state of emergency entered into force on 16 June 2020.

Communicable Diseases Act

The objective of the Communicable Diseases Act is to prevent communicable diseases and their spread, as well as to prevent harmful effects caused by these diseases to people and society at large. Thus, it includes relevant provisions intended to combat the coronavirus pandemic. The Communicable Diseases Act is applied to the organisation and implementation of infectious disease control, as well as to the planning, supervising, surveillance and monitoring of these activities.

On 22 April 2020, the Finnish Government considered that Finland can transfer gradually and in a controlled way from a situation in which there are extensive restrictive measures in society to one in which the epidemic is managed through enhanced measures, in line with the Communicable Diseases Act. However, the restrictive measures cannot be lifted at once.

So far, the Communicable Diseases Act has been utilized, for example, to close schools, prohibit public events and gatherings and order persons into quarantine. Primary and lower secondary schools did not arrange contact teaching from 18 March to 14 May 2020 excluding students in grades 1-3. Upper secondary schools, universities and universities of applied sciences have been mainly in distance teaching since March and are gradually returning to normal policies. School facilities have already been opened for students with certain restrictions.

Despite the fact that the state of emergency ended on 16 June 2020 and the Emergency Powers Act was repealed, other legislative powers will continue to be applied, in particular those laid down in the Communicable Diseases Act.

1.2 Border

On 12 June 2020, the Government decided on the partial extension of internal border control and the restriction of external border traffic until 14 July 2020. These instructions issued by the Finnish border guard provide passengers with information on the changes that apply to permitted cross-border traffic as of 15 May 2020.

As of 15 June 2020, internal border control will be terminated for traffic between Finland and Norway, Denmark, Iceland, Estonia, Latvia and Lithuania as well as for recreational boats between Schengen countries. The aforementioned traffic is unrestricted at all airports and in all ports, provided that the point of transport is open.

All airports will be opened for passenger traffic, taking into account travel restrictions for internal and external border traffic.

Until 14 July 2020, internal border control has been reinstated on the land border between Finland and Sweden; in air traffic with the exception of traffic between Finland and Norway, Denmark, Iceland, Estonia, Latvia and Lithuania; and in waterborne traffic, with the exception of recreational boat traffic and regular ferry services between Finland and Norway, Denmark, Iceland, Estonia, Latvia and Lithuania.

The following are permitted at internal borders where border control has been reinstated:

  • return to Finland

  • return traffic to other EU and Schengen countries or via them

  • commuter traffic

  • other essential traffic.

Travel for work and other essential traffic (internal borders)

a) commuting based on employment or assignment

b) diplomats, staff of international organisations, military personnel and humanitarian aid workers in the exercise of their duties

c) persons studying in Finland

d) persons with a Finnish residence permit and EU/Schengen citizens who have registered their right of residence

e) persons travelling for family matters (e.g. meeting a close relative, relationship, funerals, weddings, illness)

f) persons in need of international protection or who are travelling for other humanitarian reasons

g) other essential and justified traffic (e.g. pressing personal reasons, representatives of foreign media, property, residence or secondary residence in Finland)

Restrictions on border traffic will continue at external borders until 14 July 2020.

The following are permitted at external borders:

  • return to Finland

  • return traffic to other EU and Schengen countries or via them

  • removal of a third-country national from the country

  • other essential traffic.

Essential traffic (external borders)

a) citizens of an EU or Schengen country or a citizen of the United Kingdom arriving from another non-Schengen EU country or the United Kingdom due to commuting on the basis of employment or assignment

b) health care and rescue service personnel (including first aid) and elderly care professionals during assignments

c) freight transport and logistics personnel during assignments

d) diplomats, staff of international organisations, military personnel and humanitarian aid workers in the exercise of their duties

e) persons with a Finnish residence permit and EU/Schengen citizens who have registered their right of residence

f) persons in need of international protection or who are travelling for other humanitarian reasons

g) persons travelling for compelling family or other compelling personal reasons

h) other necessary and justified transport such as work that is significant for the functioning of society or supply security, the implementation of which requires the work performance of a person or persons coming from another country and the work can not be delayed; representatives of the foreign media; air transit the at Helsinki Airport; and the arrival of a family member of a Finnish citizen living abroad)

1.3 Visas

Owing to the COVID-19 outbreak, Finland, in line with the rest of the Schengen countries, has suspended the reception of normal visa applications with immediate effect from 19 March 2020 until further notice.

The visa processing authorities have discretionary powers to receive and process individual visa applications in exceptional cases, such as applications from family members of a Finnish citizen. Passports related to visa applications currently under consideration will be returned and the applications will not be processed. This does not apply to Russia, however, where all applications that have already been received will be processed. Processing fees will not be reimbursed.

Activities relating to residence permit applications were gradually resumed in the missions on 16 June 2020. Applicants, who wish to identify themselves for or to submit a residence permit application, need to make an appointment and contact the service number of the mission. Priority will be given to customers who have booked an appointment but whose appointment had to be cancelled because of the COVID-19 pandemic.

Information on when these exceptional arrangements will terminate will be announced at some later date. Processing centres will provide more detailed information on potential country-specific arrangements.

1.4 Export control

Transports of goods and electronic customs clearances continue as usual despite the coronavirus.

The Ministry of Social Affairs and Health is providing instructions and export licences regarding personal protective equipment meant for professionals.

1.5 Prohibition of crowds

On 14 May, the Ministry of Education and Culture and the Finnish Institute for Health and Welfare issued guidelines on preventing coronavirus infections during public events.

Public events with more than 500 persons are prohibited until 31 July. For outdoor events where there are several sections or demarcated areas intended for audiences, it will be possible to hold events with a total audience of more than 500 persons as of 1 July.

Public meetings and public events with a maximum of 50 persons may be held in indoor and outdoor premises.

Public meetings include demonstrations and other events that are open to all and that are organised in line with the right to freedom of assembly. Public events include entertainment events, competitions, performances or other similar events that are open to the public. The use of public sports facilities or visiting a shopping centre, for instance, do not constitute public meetings or public events.

The restriction on gatherings does not apply to private events, such as private parties or meetings. The Government recommends, however, that people do not organise private events for more than 50 persons.

Public meetings and public events with more than 50 and a maximum of 500 persons in indoor and enclosed outdoor spaces may be organised with special arrangements.

1.6 Lockdown

The Government has not set official restrictions on people’s movement except for the temporary restrictions considering travel outside Uusimaa (a region of Finland) which ended on 15 April 2020. People that are sick or have symptoms of the virus must stay at their homes until they are fully recovered.

1.7 Open Businesses, Industries and allowed Gatherings

Restrictions concerning businesses and venues, restaurants

Restaurants, cafes, licensed premises and other food and beverage service businesses must follow certain restrictions:

· The amount of customer seating must be reduced by half, and arrangements must be made to ensure sufficient distance between customers

· Each customer must have their own seat at a table or counter. Customers may pick up their food and beverages at the counter, but they will not be permitted to serve themselves for the time being.

· Food and beverage service businesses may be open between 6.00 and 23.00 at maximum and may serve alcohol between 9.00 and 22.00. Alcoholic beverages purchased before 22.00 may be consumed until 23.00.

NB: On 13 July, restrictions on the opening and licensing hours and numbers of customers of food and beverage service businesses will be lifted. The decree lays down provisions on the other restrictions that will remain in force. The aim of these restrictions is to continue to protect customers and staff from coronavirus (COVID-19) infections after 13 July 2020.

All customers will still be required to have their own seats from 13 July onwards. In addition, food and beverage service businesses must continue to provide their customers with instructions on how to prevent the spread of a communicable disease. Customers need to be able to wash their hands, and the premises and surfaces of food and beverage service businesses must be kept clean. Food and beverage service businesses will also be responsible for ensuring sufficient physical distances between customers.

Each establishment must display its plan on how to implement these restrictions and obligations in such a way that customers can see it.

Other venues

Indoor and outdoor premises must be arranged in such a way that customers will not be exposed to the spread of the disease.

Museums, theatres, the National Opera, cultural venues, libraries, hobby and leisure facilities, youth centres and club facilities have been open as of the beginning of June.

1.8 Shareholder's meetings and other meetings of companies

On 24 April, the Finnish Parliament passed an act which provides for derogation from various community acts.

The Act provides, for example, for the following:

  • Annual general meetings of limited liability companies, cooperative meetings, associations’ meetings and other similar meetings may be postponed and held by the end of September 2020, notwithstanding that applicable legislation, the Articles of Association or other applicable regulations set a stricter deadline (by way of example, normally the Finnish Limited Liability Act regulates that the annual general meeting shall be held within six months of the end of the financial period which in practice means that nearly all Finnish public and private companies must have held their annual general meeting by the end of June each year).

  • However, the Board of Directors of the company should prepare financial statements by the end of June 2020 at the latest.

  • If decided by the company’s Board of Directors, the annual general meeting of a listed company may be held as a remote meeting, which all shareholders may participate in through advance voting or otherwise remotely participating in person or by means of a representative.

  • Meeting of cooperatives and registered associations may be attended through a delegate and the Board of Directors may allow members to participate remotely.

It is also possible to require pre-registration to the above meetings even though the legislation or the company’s or association’s governing status would not include this requirement under normal situations.

1.9 Supply of essential medical goods

On 15 June 2020, the Government decided to waive the exercise of powers under the Emergency Powers Act. Decisions issued under the Act concerning the adequacy and distribution of medicinal products are no longer valid.

1.10 Health care

The Government's recommendation to avoid visits to hospitals is no longer valid. This applies to both special health care and primary health care.

Regional considerations should be used in organizing visits. The unit is responsible for practical arrangements such as the use of protective equipment and meeting places.

1.11 Persons with a higher risk

The Government is no longer issuing an age-based recommendation to avoid physical contact. However, it is wise to take a cautious approach to close contacts, using individual discretion and taking into account the risk factors. It is important for everyone to follow the general guidelines to reduce the risk of infection.

The Government recommends that, as a general rule, access to the actual customer premises of units providing 24-hour care and treatment remain limited to their staff. This recommendation does not apply to persons providing essential services to clients, such as rehabilitation workers or personal assistants. Older clients and clients belonging to other risk groups must be given the opportunity to meet their loved ones safely, for example outside or in separate meeting rooms. The activities of care units must support clients’ functional capacity in a variety of ways.

People who are critically ill or in hospice care must be given the opportunity to meet their loved ones safely.

1.12 Sanctions

The police together with certain other specific authorities is responsible for supervising the restrictions. There are no financial sanctions for violating the Emergency Powers Act, however the police may give orders if the restrictions are being violated.

For example, during the restrictions on travel into Uusimaa (see Chapter 1.2), the police imposed fines on several drivers seeking to cross the border of Uusimaa without an essential reason.

2. SUPPORT OF BUSINESSES

2.1 Legal basis

Introduction

The Finnish Government has launched various financial instruments to support businesses in this extraordinary situation. The Government is aiming to strengthen businesses’ resilience to continue during and after the coronavirus epidemic. The State's direct monetary support is mainly executed by reinforcing the financial mandates of the existing State's institutions which grant monetary support. For example, institutions like Business Finland, Finnvera and Finnish Industry Investment have been granted supplementary budgets to grant financial support for applicants which fulfill the applicable criteria. The government's financial support is also allocated, for example, through municipalities and regional Centres for Economic Development, Transport and the Environment (CEDTEs).

In negotiations held on 13 May 2020, the Government decided to introduce a new form of support to businesses in all industries to cover their costs. The support is intended for companies that have experienced a marked decrease in turnover due to the COVID-19 epidemic and have costs that are difficult to adjust. Support is allocated to companies and sectors most severely affected by the coronavirus. The Act entered into force on 26 June and the support could be applied as of 7 July from the State Treasury.

Legislation

The Finnish Government is supporting businesses through financial packages worth several billions of euros. This has been achieved primarily through amendments to the State budget – with such amendments executed in the form of supplementary budget proposals. So far, the Finnish Government has submitted four supplementary budget proposals. The State's direct monetary support is allocated through institutions which are described in Chapter 2.2 below.

A number of measures, however, have also required specific legislative amendments. Various amendments have been made to acts which concern, for example, tax policy, the State special finance company (Finnvera), the terms and conditions of employees’ pension insurance (TyEL) and entrepreneurs’ pension insurance (YEL) policies. Many of these legislative amendments are not in the form of direct monetary support but have the effect of easing operational preconditions of businesses in this situation.

2.2 Support measures

The main state support policies and institutions are presented below

Support for business costs

The President of the Republic approved the Act on Support for Business Costs and the Government issued the related Decree on 26 June 2020.

The purpose of the new support for business costs is to reduce the number of companies that go bankrupt due to the coronavirus crisis. To be eligible, both the business sector and the individual company must have experienced a market decrease in turnover. The number of sectors covered is 368.

To be eligible for the support for business costs, the sales of the business sector must have decreased by at least 10% compared to the reference period. If the company operates in such a sector, another requirement is that the company’s own turnover has decreased by at least 30% compared to the reference period. The turnover decrease is determined based on the value-added tax returns submitted to the Tax Administration.

The total number of eligible business sectors is 368, listed in the annex to the Government Decree. The classification is based on the Standard Industrial Classification used by the Statistics Finland that is intended for the classification of businesses and other organisations or individual workplaces according to their economic activities. The definitions of the classification are based on the production inputs and processes typical for the activity and goods and services produced. Sectors with only one company have been combined into larger groups of sectors.

The turnover of the sector in April 2020 is compared to the average turnover in March–June 2019.

The turnover of the companies in April–May 2020 is compared to their average turnover in March–June 2019. If the company was established after June 2019, the turnover will be compared to the average of the company’s sales in January–February 2020.

Support is granted on the basis of the company's fixed costs and payroll costs. The maximum amount of support payable for two months is EUR 500,000. Support amounting to less than EUR 2,000 is not paid because this would have no effect on preventing bankruptcies. The fixed costs that entitle to the support may account for no more than half of the company’s average turnover during the reference period.

APPLICATION

The application period for the support starts on 7 July 2020 and the last day for the submission of applications is 31 August 2020. The State Treasury makes the decisions on granting the support based on the applications and information on the companies’ sales provided by the Tax Administration. The State Treasury will also carry out ex post controls to make sure that the criteria for granting the support were met, and support granted on the basis of incorrect information may be recovered.


A supplementary budget of EUR 800 million to Business Finland (The funding agency which funds and accelerates Finnish companies’ growth quicker and develop their innovations to become global)

The budget is split into the following two programmes:

1) Preliminary funding for business disruption. Up to EUR 10.000

a. Companies can use the funding to investigate and plan new business, alternative subcontracting chains, and ways to organize production during and after the disruption caused by the coronavirus.

2) Development funding for business disruption. Up to EUR 100.000

a. Companies can use the funding to carry out development plans, as identified in an exploratory study or otherwise in their operations, in order to improve their potential for success during and after the disruption caused by the coronavirus. These measures are solely intended for companies to create new product- or production-related solutions.

NB. Business Finland’s application period for funding in disruptive circumstances ended 8th of June 2020 4:15 PM.

Additionally, the loans granted by Business Finland for research, development and innovation activities (R&D&I) will be increased by EUR 300 million

  • The loans are intended for identifying and developing new business in labour-intensive sectors where the coronavirus has caused difficulties

Further information

  • Companies can reduce project content and cost reporting intervals, meaning companies can get paid for project costs faster

  • Repayment instalments can be delayed

  • The terms of funding will be granted additional flexibility

A supplementary budget of EUR 400 million for CEDTE’s projects

  • The additional funding will support SMEs (including self-employed traders) that have suffered from market and production disruptions caused by the coronavirus. The grant is available throughout the country

  • Focused particularly on service sectors, but also for other industries

  • For start, renewal and growth. Focus on companies’ internationalization

NB. CEDTE’s application period for funding in disruptive circumstances ended 8th of June 2020 4:15 PM.

Finnish Industry Investment Ltd will have an ability to fund medium-sized companies up to EUR 150 million in total (Finnish Industry Investment Ltd "Tesi" is the State venture capital company)

  • Investments of EUR 1-10 million

  • Criteria for the support: min. EUR 10 million turnover, personnel min. 50, business was profitable before the crisis and the conditions for it will continue to be so

A supplementary budget of EUR 250 million for municipalities

  • Sole traders will be able to apply for financing of EUR 2000 from municipalities to address difficulties caused by the coronavirus

  • Sole traders that were profitable before the coronavirus-induced interruption will be eligible for support

  • The support would cover financial losses caused between 1 March 2020–31 August 2020

  • The support scheme would run for a fixed term and be in effect for 6 months

  • Application period closes 30 September 2020 with information available online at municipalities’ websites

Finnvera may have an ability to fund SMEs with EUR 12 billion in total (Finnvera is a State-owned special financing company and the official export credit agency for Finland)

  • In addition, the share of the State's compensation for credit and guarantee losses to Finnvera will be raised from 50% to max. 90%

  • Option for repayment-free months (max 6 months for loans guaranteed by Finnvera)

  • The support is for small & medium businesses. The company must fulfill the conditions for long-term profitable operations

3. SUPPORT OF THE JOBMARKET

3.1 Legal basis

The Finnish Government has launched various legislative instruments during recent weeks to support the Finnish labor market. The measures have benefited both employers and employees in the current extraordinary situation. The majority of the amendments are based on the social partners’ proposal to the Finnish Government to protect businesses, employment and livelihoods in the economic crisis caused by COVID-19. On 20 March 2020, the Finnish Government decided to advance the proposal on an expedited timeline.

The Government has already, for example, increased flexibility in co-operation procedures and temporary layoffs, widened the availability of unemployment benefits, reduced employers' pension contributions and provided compensation where a parent remains unpaid at home to care for their children during the pandemic.

Amendments have been made, for example, to the Unemployment Security Act, Unemployment Fund Act and Employment Contracts Act. Furthermore, entirely novel acts have been passed, such as the act on temporary support to those absent from work with no pay due to the coronavirus pandemic.

3.2 Support measures

NB. The following list is not meant to be exhaustive, but it demonstrates various support mechanisms for the labor market

Increased flexibility in co-operation procedures and temporary layoffs (The temporary amendments are in force until 31 December 2020)

Co-operation procedure and temporary layoffs

  • The minimum negotiation period has been shortened from 14 days / 6 weeks to 5 days.

  • The right to lay off employees temporarily has been extended to apply to fixed-term contracts.

  • The notification period concerning temporary layoffs has been shortened from 14 days to 5 days.

  • A company which has notified an employee of the layoff before the entry into force of the amendments may, during the period of validity of the amendments, lay off the employee after at least five days have elapsed from the notification.

Re-employment of employees

  • Employers’ re-employment obligation has been extended to 9 months regarding employees who have been made redundant on financial and production-related grounds or on grounds relating to the re-organisation of the employer’s operations.

Cancellation during trial period

  • Employers may cancel employment contracts with immediate effect during a trial period on financial and production-related grounds or on grounds relating to the re-organisation of the employer’s operations.

Enhanced availability of unemployment benefits

  • Employees who have been laid off temporarily are entitled to unemployment benefits e.g. irrespective of whether they are engaged in business activities or studies (labour policy statements which are normally required are not currently required).

  • The general preconditions for unemployment benefits remain unamended, i.e. the employee shall register as a jobseeker with the TE Office (Public employment and business services) and a statement of the employee’s right to unemployment benefits shall be issued. The employee’s obligation to accept work offered by the employer during the temporary layoff, pursuant to the Unemployment Security Act, also remains unamended.

  • The temporary act providing enhanced unemployment benefits is in force from 1 April 2020 to 31 December 2020. The act applies to temporary layoffs that have commenced on 16 March 2020 or later.

Amendments to an employee’s waiting period

  • The usual 5-day waiting period prior to entitlement to unemployment benefit has been temporarily suspended in layoffs and redundancies. Unemployment securities are available immediately. Unemployment benefit is paid as a daily allowance, earnings-related unemployment allowance or labour market subsidy. The State is responsible for financing the unemployment benefit during the employee’s waiting period.

The work requirement is shortened

  • The conditions for receiving unemployment benefit have been eased. The terms of work requirements affecting the benefit have been halved. (From 26 weeks to 13 weeks and from 52 weeks to 26 weeks).

  • The temporary acts providing enhanced unemployment benefits are in force from 15 April 2020 to 31 December 2020.

Act on temporary support to those absent from work with no pay due to the coronavirus epidemic

  • Loss of income would be compensated where a parent remains unpaid at home to care for their children during the epidemic.

  • The support could be paid to a parent who cares for children at home when they are not attending early childhood education and care or grades 1 to 3 in basic education due to the restrictions. Parents of pupils in need of special support or pupils in extended compulsory education and preparatory education are also entitled to the support.

  • Loss of income would also be compensated in situations where a person has been subject to quarantine upon their return from abroad to Finland. The condition for compensation is that the person has a contractual or public-service employment relationship in force in Finland. The benefit will be paid for a maximum period of 14 days from the date of arrival in Finland.

  • The amount of the support would be the same as the minimum parental allowance, i.e. EUR 28.94 per weekday (EUR 723.50 per month).

Amendments to insurance policies

  • An exceptional provision to the terms and conditions of employees’ pension insurance (TyEL) and entrepreneurs’ pension insurance (YEL) allows pension insurance companies to, upon request, extend the payment period for insurance contributions by an additional 3 months without any penalty interest.

  • However, the insurance contribution interest (2 %), that is part of the pension contribution, is always taken into account in the calculation of the pension insurance contribution.

4. SUPPORT OF SPECIFIC SECTORS

4.1 Legal basis

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4.2 Support measures

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5. TENANCY AND LEASE

5.1 Legal basis

NB. This writing has been originally published on HPP Attorneys' websites. This version is slightly modified.

Based on the Act on Commercial Leases, restrictions regarding the business of a tenant or a downturn in the volume of customers and the consequent adverse trading conditions do not directly entitle a tenant to a release from the obligation to pay rent or any reduction of the agreed rent. However, if restrictions issued by authorities, would lead to a clause being considered as being unreasonable, Section 5 of the Act on Commercial Leases may give grounds for adjustment of such clause. The current restrictions due to the coronavirus are in force temporarily and it is not entirely clear as to whether they constitute a ground which would entitle the tenant to an adjustment of the rent. It may be noted that under Section 25 of the Act on Commercial Leases a tenant has a right to claim the amount of the rent to be reduced via court proceedings. Nevertheless, this provision has been applied very rarely in courts due to the nature of business-to-business agreements. According to legal practice, business-to-business agreements have been settled and terms of such agreements will be capable of adjustment only in very exceptional circumstances. It is not yet clear whether the Finnish courts would consider the impact of coronavirus as being sufficient grounds for deviating from the principle that business-to-business agreements are legally valid on the agreed terms and that adjustment of any term in such agreements is not generally available.

As regards the obligation to pay rent in the current situation, a party may be able to invoke force majeure clauses if the agreement contains such a provision and the wording is applicable to the case at hand. Generally, Finnish lease agreements do not contain a force majeure clause for this kind of unusual situation. Nevertheless, even if the agreement does not contain a force majeure clause, according to Finnish law, a party can invoke force majeure under the general contract law principle. In general, “Force majeure” means an exceptional overwhelming obstacle, which is beyond the party’s control and to which the party has not been able to prepare fairly, for example, a state of war or the measure of an authority which prevents to fulfil obligations in accordance with the agreement. On the other hand, it should be noted that the scope of force majeure is more restricted than in cases where a specific clause of force majeure has been included in an agreement. As a result, while considering the interpretation and adjustment of the agreement, parties shall firstly examine the terms and conditions of the agreement.

On the one hand, the situation considered as a force majeure may be at hand if the authorities set out a prohibition requiring certain premises to close, such as restaurants or shopping centres. In this case, a landlord is not able to offer the premises and the tenant is not able to operate business in accordance with the lease agreement and the prohibition causes an overwhelming obstacle in terms of fulfilment of obligations of the lease agreement by either party. On the other hand, if the landlord decides to close business premises such as a restaurant or a shopping centre on its own initiative and without any prohibition from a public authority, the tenant’s operating in the premises has been prevented. In such circumstances, a temporary suspension of the obligation to pay rent or a reduction in the amount of the rent should be possible as in such case, the landlord is responsible for the actions. Where the tenant itself decides to close its premises due to the adverse operation conditions caused by the coronavirus, a force majeure situation would generally not be at hand. A deterioration of the tenant’s liquidity or business conditions would not constitute force majeure that makes the fulfilment of the obligation by the tenant impossible, i.e. issues regarding a tenant’s cashflow would presumably belong to the business risk of the tenant and not to the scope of force majeure.

It should be noted that invoking force majeure is always subject to case-specific consideration. Additionally, invoking force majeure does not mean the total termination of the obligation to pay rent under the lease agreement but may give rise to other remedies such as, for example, a right to claim more time to pay the outstanding amount of rent as well as a waiver of the usual delay consequences due to the situation. In addition, force majeure does not, as a matter of general contract law, primarily entitle the tenant to terminate the tenancy unless the lease agreement itself includes a right for the parties to terminate the agreement, for example when the duration of a force majeure event exceeds a certain period.

5.2 Measures

Although the legislation does not directly provide for the possibility to lower rents, various instances (such as insurance companies) and private persons have waived rental payments and issued payment time for tenants. For example, at the end of March 2020, the city of Helsinki decided to temporarily waive rental payments on commercial premises and terraces since the COVID-19 coronavirus crisis has fundamentally changed the operating environment of many businesses.

The city of Helsinki has decided to waive rental payments for the period 1 April to 30 June 2020 for commercial tenants in at least the following lines of work: restaurants and other food services, retail stores, hairdressers, beauty salons, fitness and health services (including massage and physiotherapy), activities related to the arts, music and other public events, and business and start-up advisory services. This waiver also applies to rent on space in Helsinki’s market halls. The decision entered into force automatically, so business owners affected need not contact the city.

6. LEGAL PROCEEDINGS

6.1 Legal basis

There is no provisions or powers in any act, including the Emergency Powers Act, which directly apply to court proceedings.

The most important legislation governing court proceedings are the Code of Judicial Procedures and the Criminal Procedure Act. Arbitration procedure is governed by the Arbitration Act.

6.2 Measures

Due to the COVID-19 situation, proceedings might be postponed and hearings might be cancelled which would generally delay court proceedings. Deadlines, exhortations and hearing dates are binding until otherwise decided by the judge. It is up to every judge to decide how to take the COVID-19 situation into consideration in their proceedings and court rooms. Infected or quarantined people who are unable to attend to court hearings, as well as people in risk groups, are advised to contact a responsible contact person by phone or email for further instructions without delay.

Court hearings will be organized virtually where possible. If not possible, hearings will be cancelled, except for urgent matters such as coercive measures and criminal proceedings concerning prisoners in remand. In such cases, the hearings will be postponed.

In practice the majority of District Court and Appeal Court proceedings have been postponed until the autumn. The majority of the Supreme Court cases are being adjudicated upon via a written procedure.

With regard to the Arbitration Institute of the Finland Chamber of Commerce, so far, no specific measures have been taken.

7. DEBT COLLECTION

7.1 Legal basis

The key legislation concerning debt collection in Finland is the Debt Collection Act and the Enforcement Code. Interest on late payments is determined by the Finnish Interest Act.

The Debt Collection Act provides for all stages of voluntary collection and the Enforcement Code provides for legal collection in a District Court. Basically, the collection process consists of four stages:

1) The creditor sends a payment reminder to a debtor (voluntary collection)

2) Payment demand (voluntary collection)

If the bill still remains unpaid after the creditor's payment reminder(s), the creditor might transfer the collection to a professional collection body such as a collection agency that will continue the collection process by sending a payment demand

3) District court (legal collection)

If a bill remains still unpaid after a payment demand(s) has been issued and there is no agreement on the payment plan, the creditor or the collection agency may take the matter to court to obtain a verdict based on which the debt can be collected by competent authorities

4) Enforcement (legal collection)

When the court issues a debt-collection order, debt enforcement may be initiated. In debt enforcement, the amount of income and property seized will be such that it will cover the debt payment and collection costs.

Interest on late payments accumulates during the entire debt collection period.

On 28 April, the Government proposal HE 44/2020 vp was passed which will impose temporary amendments to the Enforcement Code. The proposal's objective is that the exceptional circumstances resulting from the COVID-19 pandemic and the resulting financial difficulties can be better taken into account in enforcement proceedings than the current rules. The amendments will provide, for example, that enforcement measures may be suspended if it can be considered as being in the interests of the defendant and the suspension does not cause particular harm to the applicant. The need for additional time due to the COVID-19 pandemic or the resulting exceptional circumstances must be taken into account when taking enforcement action or setting deadlines for applicants or defendants for property seizures.

In addition, if the debtor's ability to pay is substantially impaired as a result of sickness, unemployment, maintenance paid by the debtor, temporary difficulty in paying due to the COVID-19 pandemic or exceptional circumstances, or for any other special reason, a lower amount than normal shall be seized.

Although there are not many actual amendments to the legislation on debt collection, several relevant institutions have adopted different policies.

7.2 Measures

In short, various companies have stated that they will not start legal collection processes during the coronavirus and that they will not collect recovery costs.

Furthermore, for example, the Finnish Tax Administration has stated that it will relax the terms of payment arrangements:

  • Companies can request a payment arrangement due to temporary financial difficulties

  • The first instalment of the payment arrangement will fall due three months after the arrangement has been approved, as opposed to just one month

  • The Ministry of Finance prepared a legislative amendment, HE 33/2020 vp, that reduces late-payment and penalty interest rates for taxes subject to a payment arrangement. Interest rates have been reduced by three percentage points. The amendment would be temporary and would apply to taxes due on or after March 1, 2020. The provision applies to payment arrangements applied for by 31 August 2020. However, the reduced interest rates would apply throughout the payment arrangement

In addition, several banks and insurance companies are offering temporary instalment-free periods to private and business customer whose repayment capacity is likely to become impaired by the coronavirus situation.

8. MISCELLANEOUS

8.1 Legal basis

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8.2 Measures

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