COVID-19 in Vietnam: Travel Updates and Restrictions

In light of the recent COVID-19 outbreak, Vietnam has imposed several travel restrictions on those entering the country. As of May 19, Vietnam had confirmed 324 cases of COVID-19, though 263 of the patients had recovered.

Those planning to travel to Vietnam should be aware of the latest restrictions currently in place:

  • Vietnam has suspended the entry of all foreigners from March 22 until further notice to limit the spread of COVID-19. The measure will not apply to diplomats, officials, foreign investors, experts, and skilled workers as per Prime Minister Nguyen Xuan Phuc.
  • Vietnam’s Immigration Department on May 18 announced automatic visa extensions until June 30 for foreigners that entered the country on visa waiver programmes, e-visas, or tourist visas since March 1.
  • Foreigners that entered the country before March 1 including those with temporary residence permits will also be entitled to extensions till June 30 but must present proof of documents such as health declarations and official documents from embassies. For assistance, applicants can all the immigration helpline at 0243.9387320.
  • Travelers that are still in Vietnam can call the Tourist Helpline at +84378173371 for guidance on visas, accommodation, hospitals, embassy, or consulate details. The helpline is available from Monday to Friday from 9:00 a.m. to 5:30 p.m. local time.
  • Vietnam lifted social isolation measures on April 23 with most businesses resuming operations. Nevertheless, measures such as wearing face masks and observing strict hygiene standards remain in place.
  • As of 12:00 pm on March 15, Vietnam suspended all visas and will deny entry to travelers from the UK and the 26 Schengen countries; this includes travelers that have visited or transited through these countries in the past 14 days. This will be effective for 30 days.
  • In addition, Vietnam has suspended visa on arrival for all foreign nationals except for those on official or diplomatic trips. Those who currently hold visas to enter Vietnam will need to undergo screenings and may be quarantined when entering the country.
  • From March 7, all travelers coming to Vietnam will be required to submit a health declaration upon arrival. Passengers can fill out this declaration at the airport or submit it online via this link (picture below).
  • Those that are assessed to have symptoms of the epidemic will be transferred to designated health facilities for isolation.
  • There is a temporary ban on travelers with travel history to mainland China, except for those on official or diplomatic missions.
  • We have also heard of travelers in more remote border crossings into Vietnam being denied entry if they possess any China visa history in their passport. If travel is required, we recommend using the main border entry-exit points.
  • Do not travel if you are sick; those that travel while sick, risk being quarantined, and undergo tests.
  • Visa-free travel has been suspended for South Korean and Italian nationals as well as ethnic Vietnamese from these countries. In addition, travelers arriving from or those that have transited through Daegu and Gyeongsangbuk in South Korea in the past 14 days will be denied entry.
  • In addition, visa-free travel has also been suspended for eight countries: Denmark, Finland, France, Germany, Norway, Spain, Sweden, and the UK from March 9.
  • Travelers from China that are permitted to enter Vietnam, as well as those from South Korea, Iran, and Italy, are required to undergo a 14-day quarantine upon entry.
  • Flights and passenger trains, as well as various border crossings to mainland China, remain suspended.
  • All Vietnam carriers have suspended flights to South Korea, while other foreign airlines have reduced the number of flights significantly between Vietnam and South Korea.
  • Flights to Hong Kong, Taiwan, and Macao remain operational though they are operating with reduced capacity.
  • Additional restrictions are possible for travelers when they return to their country of origin, including entry restrictions and quarantine.

The Vietnamese government officially declared COVID-19 as an epidemic on February 1, with authorities taking swift and strict measures to contain the virus.

These include measures such as the suspension of schools, the cancelation of festivals, and tourist activities nationwide. In addition, bars, clubs, and movie theatres have also been closed in Hanoi and Ho Chi Minh City until March 31.

In addition, several Vietnamese businesses, residential complexes, and restaurants have installed their own preventative measures to keep customers safe.

Due to the epidemic, travelers should monitor restrictions and comply with advisories issued by the local and national authorities.

The Vietnamese Ministry of Health is updating about the epidemic here, while the Tourism Ministry has also listed travel updates here.

In addition, basic precautions one can take to reduce their risk to the coronavirus as advised by the World Health Organization (WHO) are:

  • Wash hands with soap and water or an alcohol-based hand rub;
  • Cover nose and mouth with tissues or inside of elbow when coughing or sneezing;
  • Avoid close contact with anyone with cold or flu-like symptoms;
  • Thoroughly cook meat and eggs; and
  • Avoid unprotected contact with live wild or farm animals.

This article is produced by Vietnam Briefing, a premium source of information for investors looking to set up and conduct business in Vietnam. The site is a publishing arm of Dezan Shira & Associates, a leading foreign investment consultancy in Asia with over 27 years of experience assisting businesses with market entry, site selection, legal, tax, accounting, HR and payroll services throughout the region.

Spanish Firm Testing Staff For COVID-19 upon Office Return

Spanish heavyweight Uría Menéndez is testing all of its staff for COVID-19 as a preliminary step before returning staff to its offices in Spain.

Two people with knowledge of the situation told International that the firm is paying for staff to be tested, ahead of what another person described as a “prompt reopening”.

Uría confirmed that it is testing all its members in all locations, and said that the results will influence any reopening decisions. 

“According to the results, during the next weeks the most appropriate measures will be taken, always prioritising the health of all members of the firm,” a firm spokesperson said in a statement.

The firm added that the preference is for its people to continue with remote working for the time being.

Commenting on the current legal market in Spain, a partner at an international firm based in the country said it is not “business as usual” and that office re-openings will help bring a sense of normality.

Earlier this month, International revealed that several major Spanish firms, and international outfits including Hogan Lovells, were eyeing how best to return staff to offices.

Vietnam Issues Investment Incentives for SMEs

As the outbreak of COVID-19 hampers business activity, Vietnam introduced Decree No. 37/2020/ND-CP (Decree 37) on March 30 to update the list of sectors and industries access to investment incentives under Decree 118/2015/ND-CP. The move underlines the government’s efforts to support businesses and particularly small and medium-sized enterprises (SMEs) affected by COVID-19.

Decree 37 will take effect on May 15.

The regulation expands the list of business lines eligible for investment incentives. This includes four types of SME business lines which are:

  • Small and mediums sized enterprises (SMEs) supply chains;
  • Business incubators for SMEs,
  • Technical support facilities for SMEs; and
  • Co-working spaces of SMEs.

The aforementioned businesses will now be eligible for import duty exemptions on fixed assets as well as other exemptions based on location.

SMEs continue to play a major role in Vietnam, accounting for 98 percent of all enterprises, 40 percent of GDP, and 50 percent of employment or 1.2 million jobs. As per the Ministry of Finance, Vietnam has more than 600,000 firms, with nearly 500,000 private and 96 percent being small and micro-enterprises.

However, SMEs continue to face problems such as access to finance, market access, and competition with foreign firms. We highlight three issues faced by SMEs below.

Access to finance

Credit access is a major concern for the Vietnamese SMEs. Banks providing commercial loans prefer to allocate their resources to larger firms rather than SMEs. According to banks, higher default risks, lack of financial transparency, and lack of assets for a mortgage are the major factors for not providing loans to SMEs. SMEs have to increase transparency and introduce newer production technologies, to reduce risks and increase efficiency to increase their chances of acquiring commercial loans.

Global supply chains

A study by the International Finance Corporation shows that only 21 percent of Vietnamese SMEs are linked with global supply chains, much lower than 30 percent and 46 percent in Thailand and Malaysia respectively. Integrating further with global supply chains in terms of procurement, operations, and sales will allow firms to manage competition, reduce risks, and reduce production costs, which currently is 20 percent higher than those of neighboring countries, such as Thailand and China.

[Read more]


This article is produced by Vietnam Briefing, a premium source of information for investors looking to set up and conduct business in Vietnam. The site is a publishing arm of Dezan Shira & Associates, a leading foreign investment consultancy in Asia with over 27 years of experience assisting businesses with market entry, site selection, legal, tax, accounting, HR and payroll services throughout the region.

US Legal Industry Shed 64,000 Jobs in April

To the surprise of no one, the April jobs report from the U.S. Bureau of Labor Statistics showed massive employment losses, totaling over 20 million positions for the month, and legal jobs were no exception.

The legal sector showed a net loss of 64,000 jobs—a decline dozens of times larger than the fluctuations normally seen by the industry. The overall unemployment rate across industries stands at 14.7%, according to BLS data, higher than any time since the Great Depression.

The report on Friday showed 1,097,006 people working in the legal industry, including attorneys, paralegals, legal secretaries and others. The figure is down by 50,000 jobs from this point last year.

Updated numbers for the prior month saw the overall job market lose over 700,000 jobs in March, with the legal industry showing a loss of 1,700 jobs.

But that was before COVID-19 had a full month of stay-at-home restrictions to bolster its devastating economic effects.

Pandemic-related cost-cutting measures at major legal employers—big law firms most prominently—have been accelerating since they began in March, with April and early May bringing increasing reports of furloughs and layoffs.

Some large firms, such as Mayer Brown and Hogan Lovells, have managed to get by thus far with pay cuts and dividend deferrals. But others, such as Nixon Peabody, Goodwin Procter and Sheppard, Mullin, Richter & Hampton, have all made substantial staff cuts to go along with pay reductions for attorneys and staff.

The last time the legal industry went through an acute economic crisis, during the Great Recession, layoffs were the norm. For now, many large firms are still opting, when they can, to enact pay cuts, hour reductions and furloughs instead.

Unlike during the Great Recession, though, the direct impacts of the pandemic are spread across every industry, the flurry of austerity measures has happened quickly, and there isn’t a clear path forward to recovery.

Mixed messages at the federal level, differing local situations in states and municipalities and the possibility of months or more of uncertainty over economic conditions put businesses, including law firms, in the unenviable position of trying to plan for something they can’t see.

Many of the geographic areas in the U.S. that were hit hardest initially by COVID-19, such as New York, Detroit and Seattle, have seen success in slowing new cases, but they are rising elsewhere. That could drive major regional variations in when demand will ramp back up and whether a return to the office is possible. With regard to the latter, it doesn’t seem firms are in that much of a hurry.

Other findings in Friday’s jobs report include:

  • Unemployment overall rose by 10.3% in April, the largest monthly increase since records started being kept in January of 1948.
  • Workers who identify as white had an unemployment rate of 14.2%; those who identify as Asian were at 14.5%; those who identify as black were at 16.7%; and those who identify as Hispanic were at 18.9%. With the exception of those who identify as black, the numbers are all record highs.
  • Those who were on a temporary layoff increased by a factor of 10 to more than 18 million.
  • Labor force participation rate fell 2.5% to 60.2%, the lowest recorded level since 1973, when the rate was at 60%.
  • Leisure and hospitality lost 7.7 million jobs, or 47% of the workforce.

COVID-19 – Insurance Coverage

In times of crisis, individuals and corporations rightly turn to their insurance policies in the expectation of alleviating current and future loss. When doing so, they discover, for the first time, the policies’ exclusions, named perils, deductibles, self-insured retentions, specific and aggregate limits (and sub-limits) of coverage. On March 23, 2020, Swiss Re, the world’s largest reinsurer by market capitalization, announced a $250 million exposure to any cancellation of the Tokyo Olympics. The International Olympic Commission (IOC) is said to have an event cover that exceeds $800 million. A cover of this size was likely manuscripted by a fleet of insurance professionals who scrutinized everything down to the last comma in the last sentence of the policy. The IOC likely knows what it purchased and when and to what extent it will be reimbursed in the event of postponement or cancelation.

Most commercial lines policies, however, are issued on non-negotiated forms. Corporate policyholders have only a vague understanding of their policies’ mechanics coupled with unrealistically high expectations of coverage. This confusion typically results in wasteful litigation and sometimes judicially created a cover that insurers never intended to provide. An insurance company’s understanding of its policies and confidence in its ultimate limited exposure, will not deter what will likely be tens of thousands of lawsuits filed by individuals and businesses seeking reimbursement for the incomparable loss that is likely to result from COVID-19.

Property Insurance (business interruption) 

Currently, more than 18 states have state-wide stay at home orders and many of the nation’s largest cities are similarly closed for business. Naturally, many small business operators will remember (or be reminded) that their “business owner’s policy” may have business interruption (BI) coverage. Large corporations will have business interruption and perhaps even contingent business interruption (CBI) coverage, included in their commercial property policy. Most commercial property insurance policies provide coverage for business income loss by adding an endorsement to the insured’s property policy. Typically, such an endorsement protects the insured for losses of business income sustained as a result of direct loss, damage, or destruction to insured property by a covered peril. This type of policy would seemingly not respond to loss resulting from COVID-19. Similarly, CBI covers an insured’s business income loss resulting from loss, damage, or destruction of property owned by others, including direct “suppliers” of goods and services to the insured or direct “receivers” of goods or services manufactured or provided by the insured. The property damage to these suppliers or receivers must be of a type that would be covered by the insured’s policy had the damage happened to the insured’s property.

The current pandemic seemingly has caused no “physical” property damage, except perhaps contamination. Undoubtedly, insureds will argue that the physical contamination of the property prevents its use and is therefore covered loss. Additionally, certain businesses, including large manufacturers, have shuttered entire operations due to a single employee found to be infected by the virus. Insureds will likely draw on case law citing gas, ammonia and other air-borne hazards, as well as asbestos, and claim, by analogy, that the mere presence of COVID-19 in a structure satisfies the “direct physical loss of or damage to” requirement. At least one such case has already been filed in state court in Napa, California: French Laundry Partners LP et al. v. Hartford Fire Insurance Co. et al. (March 25, 2020).

Certain specialized insurance policies as well as endorsements to standard commercial property policies, including those used for the hospitality and healthcare industries, expressly provide insurance coverage for losses caused by “communicable or infectious diseases” without requiring physical damage to insured property. These policies and endorsements will each have their triggers, exclusions, and limits that will need to be carefully reviewed. Conversely, in 2006, the Insurance Services Office (ISO) promulgated a “virus” exclusion that is found in many commercial property policies that, if included in a policy, would seem to bring the question of coverage to an end. But, almost certainly, it will not. Those exclusions likely will be read extremely narrowly and subject to all manner of parsing. Ironically, the absence of an ISO exclusion in a commercial property policy may well be used by many insureds to claim that their policies provide “silent” COVID-19 coverage.

Some commercial property insurance policies provide coverage for business interrupted when a “civil authority” prohibits or impairs access to the policyholder’s premises. For the average policyholder, such a provision might seem uniquely suited to the current situation. It probably is not. Depending upon the specific wording, a policy’s “civil authority” coverage may or may not require that the access restriction result from “physical loss” by a covered cause of loss. These provisions typically cover instances where a Fire Department or Housing Authority, for example, condemn a building, prevent access due to hazards, or otherwise find the premises unsafe for habitation or occupation. Accordingly, federal, state, or local governmental authorities limiting access to or from businesses merely to prevent the active transmission of an infectious disease would seemingly not be encompassed by these provisions.

Liability Insurance (CGL, D&O)

Insurance companies’ exposure to third-party liability in the wake of COVID-19 will be manifold. We only touch on two of these exposures.

Cruise ships, amusement parks, movie theaters, and concert venues could all face claims by infected guests alleging that the operator failed to exercise reasonable care in protecting against the risk of exposure to coronavirus. Commercial general liability (CGL) policies, intended to protect businesses against third-party claims for bodily injury resulting from exposure to harmful conditions, often have both defense and indemnity provisions. The defense coverage in CGL policies is often triggered despite the tenuousness of the claims.

In addition to third-party claims brought against businesses, a company’s directors and officers may be subjected to shareholder lawsuits alleging that their wrongful acts (or inaction) in response to COVID-19 caused the company economic loss. A company’s Directors and Officers (D&O) policy may provide indemnity and defense from these shareholder lawsuits. Shareholders may contend that management failed to (i) develop adequate contingency plans, (ii) failed to observe protocols recommended or required by governmental authorities, or (iii) failed to properly disclose the risks COVID-19 posed to the company’s business and financial performance, generally. The majority of D&O policies exclude claims for bodily injury when afforded a “strict and narrow construction,” as they must be under the laws of most states. The “absolute” bodily injury exclusion found in most D&O policies, which excludes coverage for any claim “based on, directly or indirectly arising out of,” or relating to actual or alleged bodily injury, may permit insurers to deny coverage for shareholder claims with any connection to COVID-19. Nevertheless, such a shareholder class action has already been filed in the United District Court for the Southern District of Florida, Douglas v. Norwegian Cruise Lines et al. (March 12, 2020).

Workers Compensation and Disability Income Insurance 

There will likely be a hardening market in the wake of COVID-19 for workers’ compensation (WC) and disability income insurance. Most state workers’ compensation statutes provide that an employee is entitled to benefits for “occupational disease.” The “ordinary diseases of life” that the wider public is generally exposed to are generally excluded from WC insurance programs unless the employee can establish a direct causal connection to the workplace. Coronavirus is transmitted primarily person-to-person and seemingly would constitute “ordinary disease,” but likely not a workplace injury. Employees of hospitals, cruise ships, delivery services, and other occupations, however, who have worked throughout the spread of COVID-19 may be able to draw the necessary causal connection.

Insurers of disability income insurance will see an increase in claims worldwide. Those who contract COVID-19, exhaust the elimination period, and remain disabled, will be entitled to disability benefits. Not enough is known about the general recovery period for COVID-19 to predict the cost to the insurance industry for disabled employees. Anecdotally, the virus would appear to quickly overtake those with compromised immune systems, lead to relatively quick recovery for most of the people, and have a lasting respiratory injury for a smaller segment of the population. It is conceivable that the increased number of disability claims and length of time out of work could trigger specific and aggregate excess of loss reinsurance for certain disability carriers.


Clark Hill will continue to monitor and report on developments by regulators, lawmakers, and courts that may affect the insurance industry. Clark Hill’s Insurance & Reinsurance Group, consisting of more than 40 lawyers in 25 offices across the United States, is prepared to bring its regulatory, contract wording, and litigation experience to assist insurers, reinsurers, and intermediaries in identifying enterprise risk, offering defense in jurisdictions across the United States, and negotiating with state and federal regulators.

Article by David W. Centner (Clark Hill PLC)

Coronavirus Forward Planning – What Comes After Lockdown?

Part 1 Of 2: Employee Cost Savings And Alternatives To Redundancy

With the furlough scheme recently being extended to the end of June, it has given employers that have furloughed some (or all) of their workforce more time to consider their next steps. In the first of two articles on post lockdown planning, Selena Baker, Associate Director of Greenway Scott (part of the GS Verde group) looks at employee cost savings and alternatives to redundancy.

We understand that many businesses will be experiencing a reduced demand for their products or services and (as a result) lower revenue due to the impact of the pandemic, with little likelihood of any immediate improvement and uncertainty regarding when the situation will improve and what the long-term effects will be.

In these circumstances many companies will be looking to decrease costs, and considering whether they may need to make redundancies or other employment cost savings. In the first of our two part article series on steps after lockdown, we set out some of the things employers may want to consider now in terms of alternatives to redundancy.

Redundancies are costly in the short term and can have detrimental long-term effects, most notably the loss of experienced and valuable staff who might not be easily replaced and the commercial impacts in terms of public image. In the current unprecedented climate, employees may agree to various options, which they would not usually do, in order that their jobs remain secure (at least for the time being). We have listed below some alternatives to redundancy that some businesses in this position may wish to consider. When looking at alternatives to redundancy, companies need to consider carefully their legal and commercial implications (for example, some options may trigger the obligation to collectively consult) and so we would strongly suggest seeking legal advice.

Whichever of the below difficult options (or other alternatives) you consider, during this unprecedented time and difficult economic climate, it is often best to be as open and honest with staff as reasonably possible and, if possible, lead by example from the top.

Some options that employers may want to consider include:

  • Delay pay increases/ pay freeze – you could delay any pay increases to keep costs low, however, whilst there is normally no express contractual right to a pay increase (only a review), it is important to ensure there is no implied right through, for example, custom and practice. Commercially speaking, although such a step is unlikely to amount to a breach of contract if there is no such contractual or implied right, a salary freeze is often viewed by employees as, in real terms, a pay cut and so should be carefully managed.
  • Delay new starters/withdraw job offers- the impact/risk of this will depend on whether there is a contract in place (which can of course be verbal).
  • Delay/not pay any discretionary bonus – you could delay any discretionary bonuses, however it is important to be mindful that discretion in an employment context is very rarely absolute, and whether a bonus is actually discretionary (rather than an implied or express contractual right) will depend on the individual circumstances. Advice should therefore be sought on each occasion in order to avoid allegations of breach of contract.
  • Temporary lay-offs and short time working – there is no automatic right to do this, however employees can be placed on temporary lay-offs and short time working if there is a contractual right to do so. If there is not then you can seek to vary the contract via consultation and with the employee’s consent. Please seek legal advice should you wish to do this to avoid any allegations of breach of contract (potentially) rendering any terms and conditions of employment void.
  • Voluntary redundancies/temporary layoffs/temporary changes to their terms and conditions, such as reduced hours or days – you could invite staff to volunteer for voluntary redundancies/temporary layoffs/temporary changes to their terms and conditions. Some employees will be in a position financially and personally where this would suit them. It is of course important to engage with employees sensitively as this would be a hugely worrying time for them. Please see legal advice on how this should be undertaken correctly.
  • Vary terms and conditions (salary, benefits or hours of work) – this would need to be done via consultation and with express consent to the variation even on a temporary basis.

Of course, for some businesses the options outlined above are not enough to avoid the need to make redundancies. In the second of our two part articles, we discuss when a redundancy situation arises and the general process/steps to follow including collective consultation.

The information contained in this article is for information purposes only and is not intended to constitute legal advice. Should you require support and assistance on the employment law implications of the COVID-19 pandemic, our experienced advisors will be able to provide practical advice to support your business through the process. For advice, contact our employment & HR team at or call us on 029 2009 5500.

Coronavirus (Covid-19), French continuing plans and economy

On 13 March 2020, French Ministry of Justice issued a press release just after the announcements of the President of the French Republic. The aim, due to the emergency, is to protect citizens who are the most vulnerable and to curb the epidemic. Chancery has now prepared continuing plans to allow Justice to face core obligations of the Nation.

According to a CNB (Conseil National des Barreaux) release dated 15 March 2020, the continuing plans will be triggered as from 16 March 2020 by the Ministry of Justice to avoid propagation of Covid-19. Tribunal and courts will be closed, except for cases relating to core litigations.

Core litigations are limited to (i) criminal tribunals and courts including (a) pre-trial custody (détention provisoire) and probation (contrôle judiciaire), (b) immediate criminal summary trials (comparution immédiate), (c) appearance before the liberty and custody judge (juge des libertés et de la détention), (d) appearance before the enforcement judge (juge de l’application des peines) including appeals, these latest in the events of emergency only, (e) permanence of public prosecutor’s office (permanence du parquet), (f) hearings relating to investigation chamber for custody (audience de la chambre d’instruction pour la détention) and (ii) civil tribunals and courts including (a) children’s courts and permanence in the events of emergency only (audiences du tribunal pour enfants et du juge pour enfants et permanence du tribunal pour enfants) – including educational assistance (assistance educative), (b) summary judgments (including relating to family matters), but based on emergency only, (c) civil liberties and custody judge hearings (juge des libertés et de la détention civil).

Due to the risks of contamination, instructions are, to the extent possible, to cancel criminal court sessions related to crimes (cour d’assises). It is also allowed to postpone hearings (taking into account reasonable time extension and pre-trial custody time-frame).

Legal public facilities (services d’accueil du public) will be closed as well as justice centers and legal access points. Even if justice civil servants will not be allowed to receive public, they will be reachable by phone to address emergency situations.

As far as Paris is concerned, the first President of the court of appeal of Paris issued an ordinance dated 16 March 2020 (N°105/2020) named ordonnance de roulement modificative (amending rotation ordinance), on the basis of, inter alia, the decision of the Ministry of justice dated 15 March 2020 triggering continuing plans, article L1142-7 of the French Code de la Défense and emergency. Such article not only states that (i) the Ministry of Justice ensures in all circumstances the continuity of the legal criminal services as well as enforcement of criminal sanctions, but also (ii) he participates in fighting against elements adversely affecting fundamental interests of the Nation (this including preservation of the population in and outside France, according to article 410-1 of the French Code pénal).

Aside to the public authorities, the legal profession, as a whole, may support the economy : it can be suggested that business lawyers may wish to consider advising their clients to enter into settlement agreements (within the meaning of article 2044 of the French Civil Code) to solve pending litigations and to unlock commercial situations created by the current sanitary crisis.

This would give the economy a possibility to maintain a flow of activity.

Up to date 16 March 2020

India Battling to Survive Covid-19

A slipping economic growth in India was compounded with a rude jolt by the WHO declared pandemic which is threatening to wipe out many global economies. Covid-19’s sudden spike in March is wreaking havoc and in order to contain the fast spreading outbreak, India has decided to enter into a self-imposed near total lockdown of 21 days starting March 25, 2020. This has severely impacted the economy, as correctly forecasted by the Prime Minister, who chose the safety and health of Indians over anything else.  The Union Finance Minister has announced several measures to tackle the situation on ground.

Fitch Lowers Growth Rate – Fitch Ratings recently released its Global Economic Outlook – March 2020 wherein it was estimated that India’s GDP growth shall remain broadly steady at 5.1% in the fiscal year 2020-2021 following growth of 5.0% in 2019-2020. The number of confirmed COVID-19 cases in India was low at the time of preparing the report, especially given the size of its population, but was picking up and the report assumes the number of people affected will keep rising in the coming weeks but that the outbreak will remain contained. The difficulties facing the Indian economy have been exacerbated by another bank failure (Yes Bank). Fragilities in the financial system will further undermine sentiment and domestic spending. The overall financial system remains burdened with weak balance sheets, which will limit any upside to credit and growth despite policymakers’ efforts in recent months to ease stresses.

Moody’s Severe Growth Impact – Moody’s Investors Service sharply cut India’s growth forecast for calendar 2020 to 2.5% from 5.3% estimated barely 10 days ago after the government ordered a nationwide lockdown to curb the spread of the coronavirus. The ratings company estimates a 5% growth for calendar 2019. According to the Global Macro Outlook 2020-21 released recently, the 21-day lockdown announced by Prime Minister Narendra Modi would result in a sharp loss in incomes and further weigh on domestic demand and the pace of recovery. Moody’s expects a sharp rebound in India’s growth in calendar 2021 to 5.8%. “A general lack of social safety nets, weak ability to provide adequate support to businesses and households, and inherent weaknesses in many major emerging market countries will amplify the effects of the coronavirus-induced shock,” Moody’s said. Moody’s said the lockdown will ‘dampen economic growth’ in India, already facing credit availability issues. “In India, credit flow to the economy already remains severely hampered because of severe liquidity constraints in the bank and non-bank financial sectors,” it said.

Personal Data Protection Bill – The Joint Parliamentary Committee’s (JPC) report on the Personal Data Protection Bill, 2019, will now be submitted in the second week of the Monsoon Session of Parliament. The chairperson of the committee had requested for an extension in the Lok Sabha recently, which was approved. At its constitution in December 2019, the report had to be submitted by the last week of the Budget Session 2020. The JPC had to meet to discuss the submissions that had been made to the committee, but all of that has been postponed because of the COVID-19 pandemic. Earlier, the JPC had invited comments from stakeholders on the provisions of the Bill, as reported by Asia Law Portal and pursuant to the same, the JPC received a number of submissions from various entities within the three week timeline. Most of these submissions have common causes of concern namely removing provisions relating to non-personal data, easing of restrictions on cross-border data transfer etc.

Government’s Economic Relief Package – The government announced a Rs 1.7 lakh crore relief package aimed at providing a safety net for those hit the hardest by the Covid-19 lockdown, along with insurance cover for frontline medical personnel. About 800 million people will get free cereals and cooking gas apart from cash through direct transfers for three months. The 21-day lockdown began on March 25. The Pradhan Mantri Garib Kalyan Yojana includes higher wages under the Mahatma Gandhi National Rural Employment Act (MGNREGA), Rs 1,000 ex-gratia payment to nearly 30 million poor senior citizens, widows and disabled as well as insurance coverage of as much as Rs 50 lakh each for about 2 million healthcare workers battling the disease. States have been asked to use the Building and Construction Workers Welfare Fund to provide relief to construction workers and the first installment of Rs 2,000 under the Pradhan Mantri Kisan Yojana will be frontloaded to reach 87 million farmers in April. The government said it will pay the entire provident fund contribution of those who earn less than Rs 15,000 per month in companies having less than 100 workers as they are at risk of losing their jobs. That amounts to 24% of basic pay, 12% from the employee and 12% from the employer. This will be paid by the government for 3 months. In addition, the Employees’ Provident Fund Regulations will be amended to include the coronavirus pandemic as grounds for allowing a non-refundable advance of 75% of the corpus or three months of wages, whichever is lower, from their accounts.

The Finance Minister had earlier announced a slew of measures for extension of statutory and regulatory compliances in view of the coronavirus pandemic spreading its wings and impacting the economy.

How has the COVID-19 outbreak impacted the lives of migrants in the UK?

The world is poised precariously in an unprecedented position. Businesses are failing, industries are crashing, and borders are being closed one by one. This is an undoubtedly worrying time for Britons across the board, who are unanimously gripped by uncertainty and disbelief. While this pandemic has caused a variety of difficulties for citizens of the UK however, it is important to note that migrant residents have several extra hurdles to navigate.

When COVID-19 made its first appearance in the news in December 2019, it seemed like a far-flung concern, that was concerning but which ultimately did not affect the UK at all, overshadowed as it was with the struggle of the day: Brexit. Now, less than three months later, the virus is sitting right at our door and the country is struggling against the weight of a global pandemic that has pushed countries to shut down everything, including their borders, as each has turned inwards to protect their people.

Despite the UK’s social distancing and self-isolation preventative measures, there is a growing concern that the Home Office and UKVI’s response to some of the effects of the national lockdown it has imposed is still sadly lacking.

Yesterday, the UKVI announced that it would be providing anyone whose leave to remain expired after 24 January with a way to extend their visas until 31 May. This, they said, was to take into the fact that all non-essential travel has been banned in many parts of the world, including the UK, with ports – both air and sea – being closed or restricted indefinitely.

In addition to this update, the rules for switching between certain categories while in the country have been relaxed and migrants who are normally required to be present at work or university for a set number of days were given assurance that working from home would not negatively impact their status.

While these are certainly welcome and go a long way towards assuaging migrants’ fear of being unable to comply with immigration laws, they fail to take into account the many complications that are arising from this strange and uncertain time we now live in, many of which result in a Catch-22 situation for visa-holding migrants in the UK.

For example, while the UKVI has suggested it will not penalise those who are able to work from home, there are currently no provisions for Tier 2 workers who have lost their jobs entirely due to the national lockdown. Tier 2 Visas are tied to a specific job with a particular employer, who acts as a visa sponsor. Will the rules be relaxed to allow these individuals to apply for a new job with a different employer without having to go through the usual complicated hurdles? Or do they need to get a new visa and undergo a fresh sponsorship process before they can apply for a new job? And what steps can they take while services and operations across the country are closed down?

Job loss, a tragic consequence of the national lockdown, is also a major cause of worry for migrants who hold Spouse Visas. To remain eligible for this visa category, the applicant and their partner must earn a combined annual income of £18,600. What will happen to those who have lost income (or whose British partners have lost income) because of the lockdown? How will they extend their visa, or continue to meet the requirements of the current visa they hold, if they do not meet the financial requirement? Also, what about those who must self-isolate and now cannot meet the strict cohabitation requirements which require both partners to live together?

Finally, what about those temporary visa holders who are on pathways to full settlement but who were travelling when countries started closing their borders and are now unable to come back? Most UK visa holders cannot be outside of the UK for more than 180 days in the 12-month period that precedes their settlement application. If they are stuck in another country due to travel restrictions, will they still be eligible to apply for ILR once the travel ban is lifted and they are back in the UK? Or will the time spent in the UK count towards their ‘time spent outside of the UK’ when coming to make an application?

For people caught in these situations, there are many questions – with few solid answers. Many migrants are caught in a legal limbo. On the one hand, they must comply with official health advice and must self-isolate or, at the very least, adhere to social distancing guidance, as do the rest of us. On the other, they risk placing themselves in danger of breaching UK immigration laws unless they take action.

It is a dire consequence. If found to be in breach of these laws, a temporary visa holder risks becoming an illegal migrant which, in turn, could cost them their legal right to remain in the UK, leading to possible detainment or deportation, and jeopardising future applications for permanent settled status, including British citizenship. In the case of the latter, the existing ‘good character requirement’ stipulates that a migrant with any previous breaches may not be eligible to become a British citizen, on the basis that it shows a disregard for UK law.

In this time of great upheaval, it is not enough to offer a blanket visa extension or to simply offer assurance that migrant workers and students can work from home without having to worry that they would be reported by their sponsors. Instead, it is imperative that UKVI issue updated guidance that covers all possible scenarios arising from the COVID-19 and our response to it.

Jade MacRury is a political commentator for the Immigration Advice Service, an organisation of immigration lawyers based in the UK and Ireland.

Time to Protect Indian Businesses from Insolvency

The medium to long term financial effects of Coronavirus are yet to unfold, but the magnitude is already anticipated to be huge. Many countries across the world are announcing financial packages for businesses. India is also on the track to take a decision on relief packages.

With widespread lockdowns, the coming months are expected to witness a series of defaults by many viable businesses, and in this situation, we need to protect viable Indian businesses from landing up in our bankruptcy tribunals, for no fault of their promoters.

Broadly speaking – today an Indian company can be pushed into insolvency proceedings if it defaults in the discharge of its liability worth over INR 1,00,000/- (USD 1,322) towards a financial creditor or an operational creditor. With a few statutory exceptions and very limited way-outs, the promoters today face a real threat of losing their businesses forever if a creditor decides to opt for a legal action upon default in a single payment above the said threshold.

The bankruptcy and insolvency landscape in India has significantly changed from the regime prevailing prior to the introduction of the Insolvency and Bankruptcy Code (“the IBC”) in 2016. The most prominent feature of the IBC is “corporate insolvency resolution process” or CIRP, during which period the creditors assume control of the company and bids to acquire its business are publicly invited by an insolvency resolution professional. The board of directors of the company is suspended during the CIRP period, and in most cases, the promoters are legally prohibited from repurchasing their companies. This mechanism of CIRP was absent under the previous regime, governed by the (Indian) Companies Act, 2013. During that time, in certain cases the High Courts granted a few weeks’ of time to the promoters to settle with the creditor(s), failing which notification of winding up was published and the official liquidator took charge to liquidate the assets of the company.

The IBC stipulates a more mechanical approach, leaving little discretion with the learned judges of the National Company Law Tribunal (“NCLT”), which is the adjudicating authority under the IBC. The practitioners of the earlier company courts would agree that during the earlier regime it was expected from a creditor to show, in addition to a default of a similar threshold, that the corporate debtor is also unviable as a business. The courts went through the past balance sheets, read auditor’s reports while quoting them in judgments, and frequently observed in courtrooms that businesses give employment, and viable businesses cannot be liquidated just because of a default.

Since the advent of the IBC, the focus changed, and for a reason – the “CIRP”. Who will buy an unviable business during a CIRP? No one. What will then a CIRP achieve? Nothing.

The “business viability/un-viability” test was perhaps therefore never propagated in the IBC. Resultantly, a default above the threshold is enough, by itself, to trigger a CIRP, with all its consequences under the IBC. What the IBC also doesn’t consider is – the reason for such default.

Time has come for us to realise that unviable businesses anyway fail the CIRP. The reports published by the Insolvency and Bankruptcy Board of India evidence that four out of every five CIRPs are not able to find a resolution anyway. Eventually, such unviable companies are thrown into liquidation. No one wins.

We should, therefore, think of a course correction, and to save numerous Indian businesses that would otherwise land up in CIRPs because defaults are now imminent – and more painful – without any fault of the promoters. We need to acknowledge, with evidence now, that each default does not indicate a fault of the promoters, and survival of the businesses of all sizes is vital for the survival of the economy. The IBC and NCLTs also have a much larger economic and functional role, beyond facilitating the buying and selling of the businesses and assets or enforcing settlements by promoters under fear of CIRPs.

We, therefore, feel that the “reason for the default” should, in some way at-least, form part of the judicial consideration while admitting cases under the IBC. Viability of the business should form another vital consideration, even if the focus is on CIRP. The thresholds also should be raised much above INR 1,00,000/-, which we note is a work in progress anyway.

Let’s save our businesses. It takes years to create each viable business. The above-suggested actions may not be exhaustive. Our hon’ble judges also have always found innovative solutions, such as reverse CIRP, when the situation demands. It is now time for the law also to consider that exceptions (habitual defaulters) are not the rule.