COVID-19
(Please note that this contribution is updated up to 23 April 2020)
In this issue of our news from Brussels we will look at the EU response to the COVID-19 health emergency. This is a bit outside our normal remit for Shipping News but then COVID-19 is also outside the normal.
We hope the different headings will allow the reader to look quickly to those issues of most interest.
For the sake of brevity, we have not considered all the sectors in which the EU has intervened, but only examined the basic economic measures taken to deal with the impact of the pandemic and actions in support of the transport sector.
EU Coordinated response to Counter the Economic Impact of Coronavirus
During the past weeks, the EU Commission has developed a cross-sectoral response to address the various issues posed by the COVID-19 pandemic. The coordinated response encompasses the following intervention areas: public health, economic measures, travel and transportation, crisis management and solidarity, research and innovation, digital support and fight to disinformation.
Here, for the sake of brevity, we will only deal with economic measures, temporary state aid and transportation measures adopted by the EU.
Economic Measures
The economic measures undertaken to counter the negative effects of the pandemic cover the following initiatives:
EU Recovery Fund: with their 9 April report, the Eurogroup ministers agreed to work on a Recovery Fund to support the recovery phase, abiding to European priorities and the principle of EU solidarity. Such a fund would be centrally managed by the EU Commission and issue bonds to the most affected countries; it would be temporary, targeted and proportional to the extraordinary costs of the current crisis. The legal and practical aspects of the fund, such as its sources of financing and its relation to the EU budget, are to be discussed in the EU Council meeting on 23 April. Discussions are also under way regarding a comprehensive Roadmap and an Action Plan for the recovery of the European economy, featuring high quality job creation and reforms to increase resilience and competitiveness and sustainable growth.
Temporary state aid rules
As part of the EU coordinated response to counter the economic impact of Coronavirus, the Commission adopted on 19th March the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak[28].
Under this instrument, different forms of state aid are allowed based on article 107(3)(b) TFEU, provided they are necessary, appropriate and proportionate “to remedy a serious disturbance in the economy of a Member State” and, thus, compatible with the internal market in the meaning of Article 107(3)(b) TFEU:
When aid in the form of guarantees and subsidized loans interests is not directly provided to undertakings but channelled through financial institutions, the financial institutions must put in place mechanisms (and be able to demonstrate them) ensuring that the advantages are passed as much as possible to the final beneficiaries in the form of higher volumes of financing, riskier portfolios, lower collateral requirements, lower guarantee premiums or lower interest rates. When there is a legal obligation to extend the maturity of existing loans for SMEs, no guarantee fee may be charged.
In the context of the Commission Communication[29] on Short-term export-credit insurance (STEC) and in consideration of the outbreak, Member States may benefit from the exemption on non-marketable risks envisaged in paragraph 18(d)[30] of the STEC provided that a large well-known international private export credits insurer and a national credit insurer produce evidence of the unavailability of such cover or that at least four well-established exporters in the Member State produce evidence of refusal of cover from insurers for specific operations. On 27 March, the Commission temporarily removed[31] all countries from the list of ‘marketable risk’ countries foreseen by the ‘Short-term export-credit insurance Communication’, thus making public short-term export credit insurance more broadly available in the context of the current emergency.
On 3 April, the Commission extended[32] the Temporary Framework, allowing for five further categories of state aid measures:
State-aid schemes proposed by several member States have already been approved under the Temporary Framework.
The Framework is applied from 19 March 2020 and, being justified upon the current exceptional circumstances of COVID-19 outbreak, will not apply after 31 December 2020. The Commission may review it before that date based on important competition policy or economic considerations.
Member States are required to publish relevant information on each individual aid granted on the comprehensive State aid website within 12 months from the moment of granting and to submit annual reports to the Commission along with detailed records containing all information necessary to establish that the necessary conditions for the granting of aid have been observed. By 31 December 2020, Member States must deliver to the Commission a list of measures put in place on the basis of schemes approved based on the Communication.
Support to the Transport Sector
As the transport sector is being severely hit by national measures contain the spread of COVID-19, on March 18th the EU Transport Minsters committed to cooperate in order to avoid traffic interruptions as much as possible, especially for essential shipments, with a view at guaranteeing “economic continuity, smooth flow of essential goods, health and safety of transport workers and their free movement across borders, while focusing on containing the outbreak”.
The Croatian President of the EU Council stressed the need to provide solutions for the financial obligations of business and transports operators, trough cooperation among Member States, the European Commission and the various stakeholders. The Minister also reported the Council’s preparatory bodies are already dealing with the proposal of slots allocation and that the Presidency is committed to finalize it as soon as possible.
The European Commissioner for Transport also highlighted the importance of solidarity and coordination among Member States and reaffirmed the regulatory and financial support of the Commission to the transport industry. For instance, she supported the creation of ‘green corridors’ for people and goods and wave of penalties for delays performed by CEF beneficiaries. She also stressed the Commission’s flexibility in loosing relevant requirements and invited the Member States to do the same, in order to ease the pressure on this hit sector. It also highlighted that domestic restrictions on transport of goods, transport workers and passengers should be limited to public health reasons and adapted to the mean of transport in question. Heads of State also shown support for the Guidelines on borders. Ways to mitigate losses in the transport and tourism sectors were also discussed.
Green Lane Border Crossings
On 23 March, the Commission released a Communication on the implementation of the Green Lanes under the Guidelines for border management measures to protect health and ensure the availability Management Guidelines for the COVID-19 emergency and preserve the operation of EU-wide supply chains.
The guidance focuses in particular on the establishment of ‘green lanes’ border crossings at all the relevant internal border-crossing points on the trans-European transport network (TEN-T), open to all freight vehicles, regardless of the goods transported. At ‘green lanes’, procedures should be limited to what is strictly necessary. Freight vehicles and drivers should not face any discrimination, based on their origin and destination, the driver's nationality or the vehicle's country of registration.
All road access restrictions currently in place in Member States territories shall be temporary suspended.
Member States shall set up safe passage transit corridors to allow priority passage of private drivers and their passengers, such as health and transport workers, as well as EU citizens being repatriated, regardless of their nationality, in each needed direction along the TEN-T Network and provided they stick on the designated route. At least one airport per Member State shall remain operative for repatriation and international relief flights.
To prompt enhanced cooperation among EU Member States and support effective functioning of the ‘green lanes’ scheme, the Commission established a network of national contact points and a weekly coordination group (‘COVID-19/Corona Information Group – Borders’) was established by the Commission featuring the participation of Member States, Schengen Associated Countries, the Council and the European Border and Coast Guard Agency. Neighbouring non-EU countries are also asked to collaborate with this network in order to allow the flow of goods in all directions.
Free movement of all workers involved in international transport, regardless of the transport mode, shall be guaranteed. In this light, travel restrictions and mandatory quarantine, should be waived for transport workers who don’t present symptoms.
To protect the safety of this category of workers, enhanced hygiene and operational measures are required in airports, ports, railway stations and other land transport nodes. Where necessary to ensure that freights move freely within and into the EU, the foregoing rules should extend to third country nationals.
As specified in the Commission’s guidelines on 31 March, green lines apply also to waste shipments.
Health-Related Border Management
On 16 March, the Commission presented its Guidelines for border management measures to protect health and ensure the availability of goods and essential services34 in the context of the COVID-19 outbreak. The Guidelines aims at protecting peoples’ health while maintaining the integrity of the Single Market. In particular, they set out principles to ensure the flow and availability of essential goods and services in the internal market and the rights of those who do have to travel, highlighting the principle of solidarity between the Member States as a key component of the Union’s policies on checks of persons and goods.
Regarding the transport of goods and services, the Guidelines institute priority ‘green lanes’ for the Emergency transport services; call for the facilitation of safe movement for transport workers; limit public health restrictions to the transport of goods and passengers to transparent, duly motivated, proportionate, mode-specific and non-discriminatory measures, not undermining the operation of supply chains and to be notified to the Commission and to all other Member States prior to implementation.
As for the supply of goods, Member States are required to ensure free circulation of all goods and the supply chain of essential products, such as medicines, medical equipment, essential and perishable food products and livestock. As there is no evidence of food being a source or a transmission source of COVID-19, no additional certifications should be imposed on goods legally circulating within the EU single market. Where necessary, transport nodes should be reinforced and Member States should provide constant guidance to meet social needs, avoiding behavior such as panic buying.
Regarding health-related measures, people identified as posing a risk to public health from COVID-19 should be delivered appropriate health care. In this light, at EU external borders: all persons, including EU nationals, entering the Schengen area are subject to systematic checks at border crossing points, such as entry and exit screenings to assess the presence of symptoms and/or the exposure to COVID-19 in especially-affected areas; further measures such as in-dept tests, isolation and transfer to health facilities of suspected cases should be agreed between authorities at both sides of the border; based on consultation of health authorities, entry may be refused to nonresident third country nationals considered to be a threat to public health as presenting relevant symptoms or having been particularly exposed to a risk of infection. However, any decision on refusal of entry needs to be proportionate and non-discriminatory and alternative measures such as isolation or quarantine may be applied where considered to be more effective. Information materials shall be distributed to travelers arriving from or departing to affected areas.
At EU internal borders: health checks of all persons entering the territory of Member States can be predisposed, without necessarily entailing formal internal border controls. The difference between normal health checks and border controls is the possibility to deny entry to individuals. Under the Guidelines, people identified as sick should not be denied entry but provided access to healthcare.
Temporary border controls at internal borders may be reintroduced only where justified by reasons of public policy or internal security, which, in extremely critical situations, can include public health.
Such reintroduction must be notified in accordance with the Schengen Borders Code and should be organized in an efficient manner, avoiding the creation of large gatherings enhancing the likeability of infections. Internal border controls must always be applied in a proportionate way, ensuring nondiscrimination between Member States’ own nationals and resident EU-citizens and taking into account the health of the individuals concerned. Member States must always allow the entry of EU citizens or third-country nationals residing on their territories and must facilitate transit of other EU citizens and residents returning home. Measures such as self-isolation upon return from an area affected by COVID-19 can be required by Member States provided they impose the same requirements on their own nationals.
Member States should facilitate the crossing of frontier workers, particularly of those involved in essential occupations to fight the pandemic, so that they can smoothly reach their workplace. To this end, on 30 March the Commission released additional ‘Guidelines concerning the exercise of the free movement of workers during COVID-19 outbreak’[35], applying to a non exhaustive list of mobile workers within the EU.
Aviation: Commission issues a Proposal for a Regulation on Airport Slots
On 13 March, the EU Commission issued a proposal for a Regulation amending Regulation (EEC) No 95/93 on common rules for the allocation of slots at Community airports[36] to temporarily waive the "use-it-or-lose-it" rule, whereby air carriers must use at least 80% of their airports slots within a given period in order to maintain them in the corresponding period of the next year. The proposal aims at mitigating the negative impact of COVID-19 outbreak on the aviation sector, is based on Article 100(2) TFEU and fulfils the conditions of subsidiarity and proportionality required for EU nonexclusive competences.
According to the proposed amendments: slots allocated for the period from 1 March 2020 until 30 June 2020 shall be considered as having been operated by the air carrier to which they had initially been allocated; slots allocated for the period from 23 January 2020 until 29 February 2020 shall be considered as having been operated by the air carrier to which they had initially been allocated, provided it regards air services between airports in the European Union and airports either in the People’s Republic of China or in the Hong Kong Special Administrative Region of the People's Republic of China; for slots issued more than one week after the entry into application of the Regulation, the above-mentioned rule shall only apply where the relevant unused slots have been made available for reallocation to other air carriers. The Commission shall continuously monitor the situation and adopt delegated acts to amend the reference period in accordance to the provisions of the Regulation, should relevant data display a persistent reduction of air traffic due to the COVID-19 outbreak. Based on the available information available, it shall also issue a summary report by 15 April 2020. The power to adopt delegated acts shall be conferred on the Commission for a period of one year from the entry into force of this Regulation and may be revoked at any time by the European Parliament or the Council, however not affecting the validity of delegated acts already in force.
On 26 March, the Commission also adopted guidelines on ‘Facilitating Air Cargo Operations during COVID-19 outbreak’[37], to expedite transport by air of essential and time-sensitive goods such as food and medical supplies. The guidelines prompt Member States to alleviate existing restrictions and grant temporary traffic rights on additional cargo operations from outside the EU.
Any restrictions incompatible with EU laws must be lifted and the preservation of air supply chains, especially of critical medical items, must be the common goal. Such exceptional measures are meant to remain in force only for the duration of the coronavirus crisis.
Passenger Rights
On March 18th, the Commission issued Interpretative Guidelines on EU passenger rights regulations in the context of the developing situation with COVID-19[38] to ensure legal certainty and uniform application of EU passenger rights vís-a-vís outbreak-related restrictions. In particular, the Guidelines clarify the scope of EU passenger rights legislation[39], with respect to cancellations and delays, and cover travels by air, rails, ship, bus/coach, maritime and inland water ways. By providing legal certainty and clarity, they are also expected to reduce the costs for the transport sector.
According to the Guidelines, in case of cancellation carriers must provide reimbursement or rerouting to passengers. Re-routing shall take place at the “earliest opportunity” or, in case of air and rail transports, at a later stage at the passenger’s convenience. However, in the context of the COVID-19 outbreak, the “earliest opportunity” may be significantly delayed and/or uncertain. Carriers shall inform passengers of such possible delay when choosing between reimbursement and re-routing and communicate the service available for re-routing “on its own initiative, as soon as possible and in good time”[40].
Duties of assistance in the form of meals and accommodation apply to the four categories of carriers in case of cancellations and severe delays. Such care is normally limited to passengers choosing rerouting at the earliest opportunity and is proportionate to the waiting time.
In some cases, forms of compensation are also foreseen when passengers choose to travel in spite of disruptions. However, save in case of rail transport, compensation cannot be invoked when the disruption is determined by “extraordinary circumstances that could have not been avoided even if all reasonable measures had been taken”. Tendentially, the Commission considers that: “where public authorities take measures intended to contain the COVID-19 pandemic, such measures are by their nature and origin not inherent in the normal exercise of the activity of carriers and are outside their actual control”[41].
The EU’s passenger rights regulations do not cover travels cancelations on the passengers’ initiative.
In those cases, reimbursement depends on the type of transport and companies can offer vouchers for later use.
On 8 April the Commission issued ‘Guidelines on protection of health, repatriation and travel arrangements for seafarers, passengers and other persons on board ships’[42], advising on health measures, repatriation and travel arrangements for cruise ship passengers and crews and prompting Member States to implement a network of safe ports for crew changes. The European Consumer Centre Network provides guidance on consumers’ rights in relation to cross-border issues.
[22] Commission Recommendation (EU) 2020/403 of 13 March 2020 on conformity assessment and market surveillance
procedures within the context of the COVID-19 threat. As part of this initiative, the Commission, the European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC), collaborating with all their members, agreed to make freely available European standards for certain medical devices and personal protective equipment, in derogation to intellectual property right rules, in order to allow ready access to the market of such essential goods to both EU and third-country companies and, thus, increase the availability of the goods for those in need.
[23] The Emergency Support Instrument is part EU Solidarity for Health Initiative, aimed at supporting the healthcare systems of EU Member States with around 6 billion euros. Half of the amount will come from unspent EU budget and the other half from Member States contributions. 300 million euros of the 3 billion euros EU budget are to be allocated to the RescEU stockpile.
[24] https://ec.europa.eu/info/sites/info/files/regulation-coronavirus-response-investment-initiative-march-2020_en.pdf
[25] Communication From the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and The Committee of the Regions, Coronavirus Response Using every available euro in every way possible to protect lives and livelihoods, COM/2020/143 final, para 3.
[26] https://www.consilium.europa.eu/it/press/press-releases/2020/04/09/report-on-the-comprehensive-economic-policyresponse-to-the-covid-19-pandemic/
[27] Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, PE/72/2018/REV/1, OJ L 79I , 21.3.2019, p. 1–14.
[28] Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak.
[29] Communication from the Commission to the Member States on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to short-term export-credit insurance Text with EEA relevance, OJ C 392, 19.12.2012, p.1-7.
[30] Commercial and political risks on buyers are considered temporarily non-marketable if the Commission, after having received a notification from a Member State, decides that due to a shortage of export-credit insurance, certain risks are temporarily non-marketable for exporters in the notifying Member State
[31] https://ec.europa.eu/commission/presscorner/detail/en/IP_20_542.
[32] Amendment to the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, 3 April 2020.
[33] https://ec.europa.eu/transport/sites/transport/files/legislation/2020-03-23-communication-green-lanes_en.pdf.
[34] https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/european-agenda-migration/20200316_covid-19-guidelines-for-border-management.pdf.
[35] Communication from the Commission Guidelines concerning the exercise of the free movement of workers during COVID-19 outbreak 2020/C 102 I/03, C/2020/2051, OJ C 102I , 30.3.2020, p. 12–14.
[36] https://ec.europa.eu/info/sites/info/files/regulation-coronavirus-allocation-airports-slots-march-2020_en.pdf.
[37] European Commission Guidelines: Facilitating Air Cargo Operations during COVID-19 outbreak, 26 March 2020.
[38] Commission Notice, Interpretative Guidelines on EU passenger rights regulations in the context of the developing situation with COVID-19.
[39] Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/912; Regulation (EC) No 1371/2007 of the European Parliament and of the Council of 23 October 2007 on rail passengers’ rights and obligations; Regulation (EU) No 1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) No 2006/2004; Regulation (EU) No 181/2011 of the European Parliament and of the Council of 16 February 2011 concerning the rights of passengers in bus and coach transport and amending Regulation (EC) No 2006/2004; Do not cover Directive (EU) 2015/2302 on package travel and linked travel arrangements.
[40] Commission Notice, Interpretative Guidelines on EU passenger rights regulations in the context of thedeveloping situation with COVID-19.
[41] Ibid.
[42] Guidelines on protection of health, repatriation and travel arrangements for seafarers, passengers and other persons on board ships’.
