Covid 19 and Belgian Retail - Law passed confirming delay of summer sales
Published on 4th Jun 2020
Last month we informed you that two draft laws regarding the postponement of the sales were pending before the Chamber. The final text amending certain provisions of the Economic Code with regard to the registration with the Crossroads Bank for Enterprise and the postponement of the sales was adopted on 27 May 2020 and published in the Belgian State Gazette on 29 May 2020.
After discussion and debate on amendment proposals, the text which was finally adopted is the one proposed in the First Draft Law and which relates to the postponement of summer sales, the suspension of the Liquidation Period and the temporary relaxation of the registration requirements with the CBE. The provisions of the Second Draft Law were completely abandoned.
You will find below a short summary of the law of 27 May 2020 amending certain provisions of the Economic Code with regard to the registration with the Crossroads Bank for Enterprise and the postponement of the sales (the "Law").
1. Summer 2020 sales postponed to 1 August until 31 August 2020
The postponement of the sales was not in fact self-evident as, for example, Germany considered moving the sales period earlier in view of the declining purchasing power of consumers. Furthermore, from a business point of view, it could have made sense to advance the sales period in order to help Belgian retailers to compete with e-shops operating from abroad.
Nevertheless, Belgium decided to postpone the summer sales by only a month (without modifying the duration of the waiting period which will then occur between 1st July and 31 July) in order to allow retailers to sell off their stocks at normal prices for a little longer. The Second Draft Law, which proposed postponing the summer sales to August 15 and the winter sales 2021 to 15 January 2021, was completely set aside for two main reasons:
- First, it was considered premature to already take a decision regarding winter sales since we do not know what the state of the health crisis will be in January 2021
- Secondly, the end of the sales on 15 September would have posed a logistical problem for retailers whose autumn/winter collection is delivered at that period.
2. Temporary relaxation of the registration requirements with the CBE
The Law confirms that companies which temporarily modified their way of carrying out their activities during the period when they were forced to close their shops pursuant to the ministerial decrees of 13 March 2020, 18 March 2020 and 23 March 2020 (which was repeatedly modified) are not forced to update their registration with the CBE. For example, a restaurant which temporarily offered take-away meals during the lockdown period does not need to request the registration of a new NACE code, thereby saving them time and money. This rule applies retroactively as from 13 March 2020.
3. Suspension of the Liquidation Period
The Law confirms that the liquidation periods that were ongoing at the time the lockdown was decided on (i.e. on 18 March 2020) were suspended until the end of the closure obligation (i.e. until 11 May for most of the retailers) in order not to penalize the companies concerned since, under Belgian law, the Liquidation Period is strictly limited to five of twelve months depending on the case and cannot be interrupted.
This rule applies retroactively as from 18 March 2020.
As we already mentioned it in our previous article, the adopted measures are positive as they aim at limiting the economic consequences of the coronavirus crisis for retailers. However, they will not be sufficient if they are not coupled with measures ensuring the restoration of brick and mortar shopping.
In order to be informed of the possible measures that would be adopted by the government to help the retail sector to recover from the coronavirus crisis, do not hesitate to regularly consult our page or to contact our experts.