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   Checklist for Transactions in the Age of Coronavirus

   1. TAKE CARE WITH VALUATION AND PRICING The pandemic poses challenges to the valuation of target companies. It has become difficult to forecast cash flow, which is reflected in pricing. Large and exceptional fluctuations in net cash and working capital positions could make it difficult to find a purchase price mechanism that is acceptable to both parties. Sellers are naturally looking for a fixed (or nearly fixed) purchase price that is based on historical data. Nevertheless, it is safe to expect an increase in the use of earnout mechanisms where the price is tied, for example, to future earnings. 2. AGREE ON VIRTUAL PROCEDURES, BUT MAKE TIME FOR PAPERWORK It is a good idea to agree on virtual procedures in the SPA. Most stages of an acquisition can be carried out electronically or virtually. Due diligence reviews have been conducted in virtual data rooms for years already, and video links are a good tool for site visits, management interviews and negotiations. However, in cross-border transactions, it is important to keep in mind that some countries require that documents be signed physically in the presence of a notary public. It is also worth reserving some extra time for preparing your own documents. Foreign notaries may require notarised documents from Finnish companies, and at least in Helsinki, notaries are currently only seeing clients by appointment. Legal and financial reviews are easy to do electronically in cross-border deals, but environmental and technical due diligence reviews are more or less on hold in many countries due to restrictions to movement. In many industries, it is vital that the buyer’s own technical team or environmental consultant can inspect the target physically and review production on-site. Even after national restrictions are eased, travel restrictions between countries may remain in place for quite some time. 3. MAKE TIME FOR PERMIT PROCEDURES The processing times for merger control notifications to competition authorities have gotten longer, as many people are working from home and gathering information from market participants has become more difficult. It is a good idea to leave extra space in your timetable when deciding on long-stop dates, i.e. the date by which the deal has to close before the parties are entitled to withdraw. In Finland, we haven’t yet seen the epidemic cause delays to other permits, such as environmental permits. Environmental permitting procedures are conducted practically entirely in writing, and so are running as normal. However, as meeting restrictions continue to be in effect, expect to encounter challenges with municipal permits, particularly in smaller municipalities. Leaving enough space in your timetable is important, particularly if the target is outside of Finland. Perhaps surprisingly, the reason for this is a technical one: it seems that the authorities in some countries have a hard time signing decisions electronically. There may even be differences between different authorities in the same country. We have already run in to a situation in which a local authority made a decision, but could not serve the decision document, because it required several signatures. It is also worth keeping an eye on processing times in target countries. Particularly in countries with a high infection rate, a lack of personnel could impact normal authority operations. For example, Spain has lifted binding deadlines for authorities. 4. BE AWARE OF INCREASED SCREENING OF ACQUISITIONS IN CRITICAL SECTORS Many European countries screen foreign acquisitions in critical sectors, and the European Commission has called on Member States to intensify screening since the start of the coronavirus crisis. A shared screening mechanism will be adopted for the entire EU in October. This new legislation will give the authorities the power to screen and suggest restrictions to the transfer of control of a target company overseas if required by an important national interest. In the midst of the pandemic, the authorities’ attention has moved from the defence industry and other traditional strategic sectors to the biotech and the healthcare sectors. The scope of screening is also being widened by the fact that Member States have a great deal of freedom to define ‘important national interest’. In the midst of the pandemic, some EU countries are discussing whether a strong textile industry could be considered a critical sector: fashion houses have the capacity to manufacture face masks. 5. CHECK SUBSIDIES AND LOANS FOR CLAW-BACK CLAUSES Governmental crisis management policies could have an impact on the key figures of a target company. Many companies are now receiving state support, but some forms of support may have to be paid back later. This is worth keeping in mind in due diligence reviews during the rest of this year and the next few years to come. 6. MAKE SURE YOUR CLOSING IS SECURE Sellers will have to accept greater uncertainty with respect to closing in the current shifting environment. In a global recession, we are likely to see an increase of financing related conditions precedent in SPAs. Sellers should also go over their representations and warranties with a fine-toothed ‘coronavirus comb’ as we can expect that sellers will more often have to renew these at closing. MAC (material adverse change) clauses are also predicted to  make a comeback. MAC clauses allow the buyer to withdraw from a deal if a material adverse change impacts the target company before closing. On the other hand, the coronavirus situation is neither a new nor unforeseen circumstance at this point. 7. REVIEW YOUR W&I INSURANCE POLICIES CAREFULLY Exceptional circumstances raise the question of whether buyers can get insurance coverage against potential later breaches by sellers. At the moment, insurance companies are particularly focused on the financial situation of target companies and on thorough due diligence reviews, and insurance premiums are on the rise. The parties to a deal would be wise to give some thought to what kinds of coronavirus-related exceptions to the coverage of their insurance policies they are willing to accept. Carefully targeted and justified exceptions are the best approach to avoiding disputes.

   Published: 30.4.2020

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   Coronavirus Pulls the Rug from under General Meeting Season

   Watching, but Not Participating, Via Video We are not yet in the age of the fully virtual general meeting, because the Finnish Limited Liability Companies Act requires that a physical meeting be held. There is little doubt that the coronavirus pandemic will give a boost to digitalisation in this field, too. In the current circumstances, listed companies have begun offering their shareholders the opportunity to watch the general meeting via a real time video feed. However, this is not the same as actually participating in the general meeting, and it does not enable shareholders to exercise their rights in the meeting. At least one new service that enables real-time remote participation has come onto the market, but as far as we know, it is yet to be tested, at least by listed companies. There is certain to be a great deal of interest in a service like this, but there may still be questions relating to reliability and price. Remote Watchers Can Exercise Their Rights Via Advance Voting or Proxy A real-time video feed can be combined with electronic advance voting or a centralised proxy service—or both. In a centralised proxy service, the company offers its shareholders a proxy document containing voting instructions. Shareholders can use this document to authorise a party appointed by the company to act as their proxy representative in the general meeting. Both of these options make it possible for shareholders to exercise their rights within certain limits, while also reducing the number of people present at the meeting venue. Shareholder Rights Must Be Secured Whatever alternative form of participation is used, special attention must be paid to ensuring that the shareholders’ rights are not overly restricted due to the emergency circumstances. The Ministry of Justice has also been giving thought to this issue, and temporary amendments to corporate legislation are in the works. The government proposal on the amendments has been submitted to the parliament. The amendments are meant to make it easier to hold general meetings in the current circumstances. Whether or not they will succeed or just give rise to new questions remains to be seen. Change of Venue In many listed companies, grand halls have been replaced by the company’s own head office. Even if the meeting is still held in the Finlandia Hall or in Messukeskus, the chairperson’s gavel is likely to echo in a nearly empty room. According to the Limited Liability Companies Act, the general meeting must be held in the municipality of the company’s registered office, unless the articles of association provide for a different municipality. Holding the meeting anywhere else requires a very weighty reason. Legal literature mentions orders of the authorities, natural disasters or war preventing the meeting from being held as such reasons. The current circumstances and the restrictions imposed because of them will, at least in some cases, most likely justify holding the general meeting in a municipality other than that of the company’s registered office or the one stated in the articles of association. According to the legislative materials of the act, even in such a situation, the meeting must be held as close as possible to the registered office and be accessible via easy means of transport. Temporary Legislative Amendment Allows Postponement The intensification of the pandemic and the restrictions imposed by the authorities have forced company boards to think about postponing general meetings that have already been convened and also about when to hold a postponed meeting. It is unlikely that postponing the general meeting past the deadlines provided for in articles of association or Limited Liability Companies Act will lead to liability for damages in the current situation. Any remaining doubts should be cleared by the temporary amendment, which is intended to allow general meetings to be postponed past the normal deadlines. Postponing the general meeting also means postponing any resolution on dividends. On the other hand, many companies will have to reconsider their dividend proposals anyway, as future outlooks have become murky. In our next posts, we plan to dive more deeply into the future temporary amendments as well as questions concerning dividend payment. ____________________________________________________________________________ Issues relating to organising general meetings this spring were discussed in a webinar we held on Friday, 17 April 2020. 

   Published: 20.4.2020

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   Several Temporary Amendments to Employment Law Provide Relief in Covid Crisis

   The Finnish Government has taken action to provide flexibility to the labour markets and the related legislation to mitigate the effects of the crisis caused by the coronavirus (COVID-19). The amendments to the Employment Contracts Act, the Seafarers’ Employment Contracts Act and the Act on Co-operation within Undertakings entered into force on 1 April 2020 and will remain in force until the end of June. This temporary legislation will make it easier for companies to adapt to the rapid change in their operating environment and sudden drop in their business. Accelerated Lay-Off Process: 5 + 5 + 5 Perhaps the most anticipated amendment is the shortening of the notice period for lay-offs: the minimum period is now five days rather than fourteen. The minimum duration of co-operation negotiations relating to lay-offs has also been shortened to five days from the normal fourteen. It is now possible to complete the lay-off process in 15 days: the negotiation proposal must be given five days before starting negotiations, the negotiations last another five days and the lay-off can start five days from the lay-off notice being issued. The amendment also makes it possible to lay-off fixed-term employees in addition to permanent employees. Extended Re-employment Obligation to Protect Employees This temporary legislative amendment will continue to be applied after June 2020 if the lay-off began during the validity of the amendment. This amendment protects employees by extending the employer’s obligation to re-employ employees in the same or similar work to nine months if the employee was terminated on production or financial grounds during the validity of the temporary amendment. Cancellation during Trial Period also Possible on Production and Financial Grounds In normal circumstances, it is not possible to cancel an employment relationship during the trial period on production and financial grounds, but one of the temporary amendments has now opened up this possibility. However, trial period cancellation is still not allowed if it is based on a temporary reduction in work. In such a case, the employees work is not considered to have been permanently reduced in the manner required to apply production and financial grounds. Collective Agreements and Their Emergency Provisions Supersede the Law In the context of temporary legislation, it is important to remember that collective agreements and any amendments made to them take precedence over even temporary laws—for better or for worse. Over the past few weeks, numerous relaxations and emergency provisions have been agreed to both normal generally applicable collective agreements. For example, the lay-off notification period in some collective agreements may of shorter or longer than five days. Such temporary changes have already been made to the majority of collective agreements. What Happens after June? The above amendments were very welcome, and many employers have already put them to use. If the current uncertainty is still with us in June, it will be extremely important to extend these temporary amendments. If the crisis caused by the coronavirus drags on, it will also become necessary to look at simplifying and accelerating the co-operation procedures for terminations as well as expanding the opportunities for employers and employees to make local agreements. ------------------------------------------------------------------------------------------------------ The coronavirus outbreak is a rapidly developing situation. This information reflects the situation at the time it was published 17 April 2020 and is subject to change.

   Published: 17.4.2020

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   Open Dialogue Is the Key to Weathering a Financing Crisis

   The first thing on any company’s to-do list should be securing liquidity. Many companies are preserving their cash assets and looking to cash in whatever assets they can. Many companies are also taking a hard look out outgoing cash flows. Excess costs are being eliminated and planned investments are being postponed. A simple but good piece of advice is to pay close attention to your invoicing and maintain a rapid circulation of invoices, as this can help reduce your credit loss risk. You can also negotiate with your financiers on postponing loan payments. When in the middle of the storm, it is important to still try to take a long view. If ever there was a time to analyse your company’s financing agreements and how they will be impacted by changes in your operating environment, it is now. As your top priority, I would advise checking what kind of financial covenants are in your loan agreements—and whether you will be able to comply with them. Depending on your covenants, 2–3 bad months now could continue to cast a shadow well into next year. Maintaining an open dialogue with your financiers will improve your company’s ability to make it through this crisis. When your financiers have a clear picture of situation, it will be easier for them to see any problems in advance and agree on what to do. Maintaining trust is the key. It is important to remember—just as in the financial crisis—that trying to hide things helps no one. If you were already having trouble in your business, you have to face up to that and resist the urge to fold them into any problems caused by the coronavirus pandemic. The few weeks of experience we’ve now had has already proven that this is the best way forward.

   Published: 14.4.2020

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   Finnish Tax Administration’s Support for Companies during the Pandemic

   The goal of the Tax Administration and the Ministry of Finance is to support companies through measures to ease cashflow problems and reporting. The measures published so far seem quite moderate from the perspective of improving the finances and liquidity of companies. EASED TAX PAYMENT ARRANGEMENT Companies that encounter solvency problems can request a payment arrangement for income and value added taxes. Due to the exceptional circumstances caused by the coronavirus, the Tax Administration will ease the terms of payment arrangements. In addition, on 2 April the Government submitted a bill to Parliament (HE 33/2020 vp) to temporarily lower late-payment interest rates for taxes in a payment arrangement. A payment arrangement with eased terms has been available in MyTax since 25 March 2020. As of the same date, taxes that are included in a payment arrangement request will not be recovered by enforcement authorities and the company’s tax debt will not be published in the tax debt register or the protest list. The due dates for payment arrangements will be postponed and late-payment interest will be lowered. The first instalment of the payment arrangement will fall due in three months after the arrangement is approved, as opposed to one month. The Tax Administration will automatically include any new tax debts in the arrangement that form after the payment arrangement has been taken into use until 31 May 2020. According to the government bill, the rate of late-payment interest on taxes included in a payment arrangement would be lowered from 7% to 4%. The lowered interest rate would only apply to taxes that are included in a payment arrangement and that fall due after 1 March 2020. Qualifying for a payment arrangement requires that you have no taxes in recovery by enforcement and that you have filed all the required tax returns and reports to the Incomes Register (earnings payment reports and employer’s separate reports). The coronavirus pandemic and payment difficulties arising from it are not, as a rule, grounds for release from late-payment interest. However, you can apply for a waiver of late-payment interest in MyTax for a special reason. Such a reason could be if you paid taxes late due to a sudden illness or quarantine, and were unable to make the tax payment on time. INCOME TAX SUPPORT With respect to income tax, the Tax Administration has announced the following support measures: You have to request the above measures separately and provide grounds for the reduction, additional time or waiver of the late-filing penalty. NO LATE-FILING PENALTIES FOR VAT RETURNS AND EXPEDITED PROCESSING OF VAT REFUNDS No extensions to the deadlines for filing VAT returns or other tax returns for self-assessed taxes are available. However, you can request a waiver of the late-filing penalty. If you have a justified reason for filing late, such as illness, you may not have to pay a late-filing penalty. The Tax Administration has also announced that it is expediting the processing of VAT Refunds. POSTPONEMENT OF EXCISE DUTIES AND CAR TAX PAYMENTS Payment arrangements are not available for car taxes and excise duties, but you can request a postponement of payments. ------------------------------------------------------------------------------------------------------ The coronavirus outbreak is a rapidly developing situation. This information was first published on 26 March 2020 and was updated on 9 April 2020.    

   Published: 9.4.2020

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   Tools for Successful Procurements during Exceptional Circumstances

   However, procurement procedures carried out in the prevailing situation will need flexibility as well as active application of the exemptions provided for in the Act on Public Procurement and Concession Contracts (Procurement Act). This blog post lists the exemptions that may be applicable in the current circumstances. Amending Procurement Agreements and Fulfilment of Contractual Obligations The pandemic may pose challenges if the parties are no longer able to meet their contractual obligations. The first thing to do is examine what the procurement agreement states about the possibility to amend the agreement. Amendments to the agreement require the consent of both contracting parties. If ever there was a time to be flexible and look for solutions that work for both parties, it is now. Making integral amendments to a procurement contract without a new procurement procedure is prohibited by the Procurement Act. However, the act provides an exemption to this rule if: The pandemic can most likely be considered an unforeseen circumstance, and in the current situation, these exemptions may well be worth using. If the pandemic continues for a long time, the consequences are more likely to be considered foreseeable. The pandemic and its impacts should therefore be taken into account in procurement agreements entered into after the outbreak. Cooperation is Better than Invoking Force Majeure If the parties can’t reach a compromise, the question arises of whether it is possible to invoke force majeure to be released from contractual obligations. The threshold for force majeure to apply is generally high, but the specific contents of force majeure clauses, and thus the definition of force majeure, varies from agreement to agreement. It should be kept in mind that if force majeure is found to apply, the contractual performances between the parties are suspended for a fixed term. This is rarely in the interests of either party, and the first choice should always be to cooperate to find a solution to the situation. Effects of the Pandemic on Procurement Procedures The exceptional circumstances caused by the pandemic could give rise to a need for direct awards. In a direct award, the contracting entity negotiates a procurement agreement with one or more suppliers without prior publication of a contract notice. The pandemic could provide grounds to resort to a direct award due to extreme urgency. The grounds for direct award are listed in the Procurement Act, and can be used, for example, if the following conditions are met: In the case of competitive tendering, the contracting entity can use the accelerated procedure provided for in the Procurement Act if compliance with the time limits in the normal procedures is not possible, owing to duly substantiated urgency. Suspension of Procurement for a Real and Legitimate Reason Unfortunately, the pandemic could also mean that the need for procurement or other circumstances change to the degree that it is no longer feasible to go through with competitive tendering. In such circumstances, a procurement procedure can be suspended provided that there is a real and legitimate reason for it under the Procurement Act. An example of an acceptable reason would be that the contracting entity cannot commit to the procurement in the prevailing circumstances for financial reasons. On 1 April the European Commission published a communication concerning public procurement, which provides guidance on using the public procurement framework in the emergency situation related to the coronavirus crisis. ----------------------------------------------------------------------------------------------- The coronavirus outbreak is a rapidly developing situation. This information reflects the situation at the time it was published 3 April 2020 and is subject to change.

   Published: 9.4.2020

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   Covid-19 – changes to insolvency laws give distressed companies breathing room

   Most importantly, the creditors will not be able to apply for corporate bankruptcy of a debtor company solely over short-term payment default. In addition, the Bankruptcy Ombudsman has given recommendations on how to consider late payments in restructuring proceedings during the pandemic. Temporarily Suspending the ‘Seven-Day’ Rule The Finnish Ministry of Justice is drafting new temporary legislation that will restrict the creditors’ right to apply for corporate bankruptcy of a debtor company. In Finland, a company must be insolvent in order to be declared bankrupt. If a company has not paid its debt in seven days after receiving a payment demand from a creditor, the company is assumed to be insolvent and the creditor may petition the court to declare the debtor company bankrupt. With the proposed changes, this presumption will be temporarily removed. Once in force, creditors will be expected to take this into account in their debt collection measures. The proposed change is very welcome in these stormy times. Many companies have either already faced or will soon face difficulties paying their debts on time. However, for many companies, the insolvency that results from the pandemic will only be temporary. This proposed relief will give companies extra time and space to navigate their way through these difficult times. Nonetheless, it is worth remembering, that this change will only freeze the seven-day rule. There are other situations when the debtor company is assumed to be insolvent, but the goal of this measure is that the insolvency must exist for a lengthier period before a creditor can file for bankruptcy during the pandemic. Ongoing Restructuring Proceedings The current situation will also impose challenges to companies that were already facing difficulties before the pandemic. Companies in restructuring proceedings may very well struggle to pay their new debts as they fall due. Typically, this would give the administrator the option of breaking off the proceedings if it is likely that the company will not be able to pay its new debts. Due to Covid-19 outbreak, the Finnish Bankruptcy Ombudsman has recommended that the administrator evaluate each individual case carefully and consult with the creditors concerning whether they would be willing to review the company’s ability to pay new debts over a longer run. If it is likely that the debtor company will still have a viable business that can be restored after the pandemic, the debtor company’s new obligations can be reviewed over a longer timescale and the proceedings should not be terminated just because the debtor company cannot temporarily pay its new debts. This is another important and much needed relief for distressed companies to weather the storm—and hopefully one that will be applied in practice. It would not be in anyone’s interest to terminate restructuring proceedings and force a debtor company into bankruptcy over short-term payment difficulties caused by the pandemic. Looking Abroad A number of governments have similarly introduced tools to aid distressed companies in the Covid-19 turmoil. As a Finnish lawyer currently living and working in the United Kingdom, I thought a brief review of the UK government’s measures could provide an interesting point of comparison. The government in the UK also announced changes to insolvency laws in response to the pandemic on 28 March 2020. For instance, the UK government will temporarily suspend the wrongful trading provisions that pose the threat of personal liability for the directors of a company. In UK, in case of insolvent liquation or insolvent administration, the directors of the company may face personal liability if they fail to take every step to minimise the potential loss to creditors. This suspension will give company directors greater confidence to use their best endeavours to continue to trade during the pandemic, without the threat of personal liability should the company ultimately fall into insolvency. Existing laws for fraudulent trading and the threat of director disqualification will stay in force and will aid in preventing director misconduct. Due to the pandemic, the UK government is also accelerating the implementation of new restructuring procedures that were announced already in August 2018. These measures include a new type of restructuring plan and a moratorium to protect companies’ essential supplies and to give them time to seek a rescue plan. As opposed to the insolvency regimes in many other countries, Finnish insolvency law does not set an obligation for the directors to file for bankruptcy or include the risk of personal liability. However, even though an insolvent company can technically continue trading, the directors need to be very diligent in order to avoid criminal liability or liability for damages. Further Action Needed? Finland as well as other countries are introducing much welcomed suspensions and changes to insolvency laws. While the differences in insolvency regimes mean that the solutions adopted in one country cannot always be transferred to another, it is worth keeping an eye on what measures various countries are implementing to aid companies and businesses to cope in these exceptional times. As we do not yet know how long these exceptional times will affect our lives and how deep the difficulties that follow will be, it remains to be seen if the measures that have now been introduced will be sufficient to help companies weather this storm or whether further action will be needed.  The full text of the Finnish Ministry of Justice’s announcement on 28 March 2020 can be found online  . The author is a Finnish insolvency lawyer and qualified solicitor currently based in London. The coronavirus outbreak is a rapidly developing situation. This information reflects the situation at the time it was published 1 April 2020 and is subject to change.

   Published: 1.4.2020

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   Coronavirus Checklist for Corporate Financing Agreements

   Many companies are already making contingency plans, and our firm has established the C&S Corona Task Force to help with this work. The Task Force can help you with any questions you may have about financing agreements and corporate financing. If you are working with financing agreements, we recommend running through this checklist to make sure you have covered the most important points. The coronavirus outbreak is a rapidly developing situation. This information reflects the situation at the time it was published 19 March 2020 and is subject to change.

   Published: 19.3.2020

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   Capitalising on Fear Prohibited in Marketing

   In response to improper marketing, tech giants such as Google, Amazon and Facebook have taken action voluntarily and have to date already removed tens of thousands of ads and posts seeking to profit from people’s fear and spread disinformation. In Finland, online marketplace Tori.fi has banned the sale of face masks and disinfectants as well as advertisements claiming that a product could protect against or prevent coronavirus infections or stop the spread of the virus. Online marketplaces and tech companies have taken the initiative in championing responsible marketing and ensuring the availability of correct information in this crisis. From a lawyer’s perspective, this active social role taken by various companies is a voluntary and advance filtering by these companies of marketing that could be deemed illegal. Prohibition of Unfair Marketing and Inappropriate Practices Seeks to Protect Consumers The Consumer Protection Act states that no conduct that is inappropriate or otherwise unfair from the point of view of consumers shall be allowed in marketing. Marketing is considered unfair if it is clearly in conflict with social values. The unfairness of marketing is assessed by taking into account all of the circumstances of each individual case, so it is an overall case-by-case assessment. There is no doubt that the current public health emergency would affect this assessment. Marketing is considered inappropriate if it violates generally accepted business behaviour and the marketing clearly undermines the ability of consumers to make a reasoned purchasing decision or other decision relating to consumer goods. This assessment requires that the marketing would lead to a consumer making a decision that they would not have made without the behaviour. If marketing is targeted at a group that is particularly susceptible to influence, the inappropriateness of the marketing will be assessed from the perspective of this group. Marketing does not have to have factually led to a consumer buying goods or services and the behaviour does not have to be proven to have caused concrete harm or damage to a consumer for it to be found inappropriate. In this case, a purchasing decision does not just mean whether the consumer purchases goods or services, and includes, e.g. the prices and other conditions under which they buy the commodity. For example, Amazon has removed over a million products that were misleadingly marketed as preventing coronavirus infection or that had extortionate prices, and Facebook and its subsidiaries announced that they are blocking the advertising of face masks entirely. Market Products Truthfully The law prohibits marketing that provides false or misleading information. Specifically, this prohibition means that the key information on a commodity must be true, and information that is true in and of itself cannot be presented in a misleading manner. So, for example, marketing face masks as protection against the epidemic is clearly misleading, as scientists and medical professionals have been clear that wearing a face mask will not protect a healthy person from infection. By contrast, face masks are recommended for people who have already been infected, as they could prevent them from spreading the infection. Despite this people have been stockpiling face masks around the globe, and prices have gone through the roof. This has been a cause for concern, for example, in the United States, where face masks have been aggressively marketed to consumers, leading to an explosion in demand. At worst, this could lead to healthcare personnel running out of masks, which would place society at large at risk. Responsible Marketing and Information Are Key in a Crisis In a crisis, the marketing, decision making and publication of decisions by companies have a major impact on whether a company ultimately incurs goodwill or badwill. For example, Google’s CEO Sundar Pichai published a release stating that Google is approaching the situation responsibly, fully aware that many rely on Google’s search engine every day. The company announced that it is combating false information, e.g. by directing searches relating to the coronavirus primarily to the sites of the WHO and national authorities and by removing all advertisements capitalising on the epidemic from Google Ads. It is a good idea to be particularly careful even if your business does not revolve around face masks. For example, if you are marketing nutritional supplements or other health products, unjustified claims that your product may curb the symptoms of coronavirus or help protect against it would very likely be considered, inter alia, misleading and both unfair and inappropriate behaviour. In the current circumstances, this could also happen if your marketing excessively emphasiseas the disinfectant properties of your cleaning product.

   Published: 17.3.2020

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    What Would the Emergency Powers Act Mean for Life Insurance Policies?

    With the spread of the coronavirus, there has been intense debate in the Finnish government concerning whether to invoke the Emergency Powers Act. Pandemics are one of the grounds for invoking the act, and it would give the authorities exceptional powers to safeguard the country’s population and protect its economy. Solvency Risk in Public Health Emergencies Public health emergencies increase and change insurance risks in a way that could not be taken into account when entering into the insurance agreement. A dangerous infectious disease like the coronavirus could increase the number of insured events in a way that the insurance company could not foresee. In extreme circumstances, a substantial increase in insurance pay-outs could put the solvency of life insurance companies at risk. The knock-on effects of poor solvency among life insurance companies would be a serious threat to the stability of both the insurance and financial markets. Both Insurers and Policyholders Could Delay Payments Keeping the functions of society running in an emergency also requires that the insurance industry is able to handle its duties in the exceptional circumstances. If the Emergency Powers Act is invoked, it would be possible to amend life insurance terms so that, for example, the payment of benefits would be postponed in full or in part. Correspondingly, in order to secure the livelihood of the Finnish population, policyholders could put off the payment of insurance premiums. The right of both insurers and policyholders to invoke certain insurance clauses could also be restricted if compliance with the term would be unreasonable given the prevailing emergency. When faced by misfortune, a life insurance policy can have a major impact on a household’s livelihood. It is important that insurance coverage and the payment of benefits and compensation are continue as extensively as possible in view of the circumstances.

    Published: 13.3.2020