Banking and finance news
Overview of the latest banking and finance news
Assessing the COVID-19 impact on existing financing agreements in Belgium
2 April 2020
The COVID-19 outbreak and its disruptive effect on the global economy raises many concerns about how parties need to deal with the execution of current contractual arrangements.
This is of greater relevance for financing agreements. Next to their payment obligations, borrowers are usually bound by several engagements, the breach of which could have severe consequences.
What follows is an indicative list of typical clauses of financing agreements that could be impacted by the current context, the potential impact for borrowers after a breach thereof, and the possible remedies.
Continued provision of credit during COVID-19 crisis: A EUR 50 billion arrangement in Belgium
24 March 2020
A deferral of payment of existing credits for Belgian companies, self-employed persons and individuals facing payment problems because of the COVID-19 crisis, and a guarantee scheme for all new credits granted to viable non-financial companies and self-employed persons have been announced on 21 March 2020. The arrangements set out below result from an agreement between the Belgian federal government, the National Bank of Belgium and the Belgian banking sector.
The measures are set to apply as of 1 April 2020 and are expected to be formally rubberstamped by the European Commission in the next few days.
New law introduces unfair terms prohibition in B2B relations
30 April 2019
A new impactful Belgian law has recently been adopted without raising much media interest. It introduces the general principle that any clause creating an obvious imbalance in the rights and obligations of contractual parties can be cancelled.
As a result, this principle, already known in business-to-consumer (B2C) contractual relationships, is extended to business- to-business (B2B) contractual relationships. It goes without saying that this new law will have important consequences for company relationships by questioning the legality of several contracts.