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The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from official national legal publications and reliable press sources. You can find previous news by searching the Global Legal Monitor.

South Korea: Parliament Responded Quickly to COVID-19 by Amending Three Acts

(June 4, 2020) South Korea was one of the first countries outside of China to identify persons who had been infected with COVID-19. By the beginning of March 2020, the epidemics in South Korea, Iran, Italy, and Japan were the World Health Organization’s greatest concern. To enhance the government’s response to the coronavirus disease, the South Korean Parliament passed a set of bills amending three separate acts, which the President promulgated on March 4, 2020. The enforcement dates of the amended provisions vary, with some being effective on the date of promulgation.

Infectious Disease Control and Prevention Act

The Infectious Disease Control and Prevention Act (Act No. 9847, Dec. 29, 2009) was amended by Act No. 17067 to create punishments for people who do not follow measures to prevent or contain infectious diseases. Under the amended act, a suspected patient who refuses to take a test ordered by health authorities is punishable by a fine up to a 3 million won (about US$2,430). (Amended arts. 13, para. 2; 80, subpara. 2-2.) A person who violates a quarantine order imposed as a preventive or containment measure is punishable by imprisonment for up to one year or a fine up to 10 million won (about US$8,090). (Amended arts. 47, subpara. 3; 49, para. 1, subpara 14; 79-3.) These provisions took effect on April 5, 2020. The first person to be imprisoned under the amended act for violating quarantine was sentenced to four months in prison on May 26, 2020.

In response to the global shortage of health care supplies, the amended act also enables the minister of health and welfare to ban exports of drugs and other goods for medical use, such as face masks and hand sanitizers, when supply shortages are expected. (New art. 40-3.) This provision became effective upon promulgation. The ministry banned exports of protective masks from March 6, 2020. After the domestic supply stabilized, the government started loosening the ban. In early May 2020, the government decided to provide a total of 1 million face masks to Korean War veterans in 22 countries, including 500,000 face masks to Korean War veterans in the United States.

The South Korean Embassy in the U.S. said that a South Korean Air Force aircraft carrying the masks arrived at Joint Base Andrews in Maryland on May 12, 2020.

Quarantine Act

Under the Quarantine Act (Act No. 9846, Dec. 29, 2009), the minister of health and welfare may request that the minister of justice prohibit or suspend the entrance into South Korea of persons who are infected or suspected of being infected with certain diseases. Seven infectious diseases, such as cholera and severe acute respiratory syndrome (SARS), are listed in the Quarantine Act. In addition, the minister of health and welfare can add other infectious diseases to the list. (Art. 2.) The amending act (Act No. 17068) also provides that persons who come from or through regions affected by or at risk of an epidemic are subject to such a request. South Korean nationals are excluded. (New art. 24.) The government banned foreign nationals from Hubei Province, China, from entering South Korea on March 19, 2020.

Medical Service Act

The Medical Service Act (Act No. 8366, Apr. 11, 2007) was amended by Act No. 17069, which obligated the minister of health and welfare to establish and operate a monitoring system for surveillance of the occurrence and causes of infections originating in health care institutions. The head of a medical institution and medical personnel who have learned of the occurrence of a certain infection within the institution may voluntarily report this to the minister of health and welfare. A person who was infected in a medical institution may also voluntarily report this to the minister. The head of the medical institution must not take adverse action against a person who files the voluntary report. (New art. 47.) This provision will take effect on September 5, 2020.

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European Union: Commission Adopts Second Amendment to Temporary Framework for State Aid Measures to Support Member States’ Economies during COVID-19 Outbreak

(June 3, 2020) On May 8, 2020, the European Commission adopted a second amendment to extend the scope of the Temporary Framework for State Aid Measures to include recapitalization measures and subordinated debt. The Temporary Framework was first adopted on March 19, 2020, allowing a variety of state aid measures otherwise incompatible with European Union (EU) state aid rules in order to support the EU economy during the current COVID-19 outbreak. This amendment, which follows a first amendment adopted on April 3, 2020, allows member states to provide recapitalization aid to companies in need. Although the Temporary Framework will remain in effect only until December 31, 2020, recapitalization aid will be available until June 30, 2021. (Second amend. para. 48.)

Background

Under the Temporary Framework, member states can put in place a variety of temporary state aid measures, relying on article 107 paragraph 3(b) of the Treaty on the Functioning of the EU. The Temporary Framework complements other possibilities available to member states in line with the EU state aid rules. For example, the Commission acknowledged the COVID-19 outbreak as an “exceptional occurrence” within the meaning of article 107, para 2(b) of the TFEU in its decision of March 12, 2020, responding to the notification by Denmark about the grant of state aid. Since March 2020, the Commission has approved numerous state aid measures under article 107, paragraph 2(b), article 107, paragraph 3(b), and the Temporary Framework.

Aid in the Form of Recapitalization

The suspension of economic activity resulted in a decrease in equity for many companies. Recapitalization aid provides equity and/or hybrid capital instruments to nonfinancial companies that were otherwise viable before the COVID-19 outbreak. (Second amend. para. 37.) Recapitalization aid must be an instrument of last resort and must not exceed the required minimum to ensure viability and to restore the capital structure of the receiving company to its pre-COVID-19 level. (Paras. 6–7; 37, points 44–45, 54.) A number of stringent conditions and governance measures are established to ensure that the aid does not cause distortion of competition and that the receiving company buys back the shares bought by the state as swiftly as possible. (Para. 37, points 49–85.)

Conditions for Receiving Recapitalization Aid

The following conditions must be met for a company to receive recapitalization aid:

  • The company was not in financial difficulty (within the meaning of article 2, paragraph 18 of the General Block Exemption Regulation) on December 31, 2019.
  • The company would go out of business without the aid.
  • The company has not been able to find financing on the market.
  • The intervention is necessary for “the common interest”—for example, to avoid social hardship and market failure due to significant loss of employment. (Para. 37, point 49.)

Following a written request by the company, the member state can grant recapitalization aid on approval by the Commission. (Para. 37, points 50, 52–53.)

The member state must be appropriately remunerated for its investment, and the receiving company must have sufficient time to redeem its shares. In order to incentivize the company to buy back its shares, “a step-up” redemption mechanism must be set up, whereby the remuneration is increased over time. (Para. 37, points 55–58, 61–70.)

The receiving company must present an exit strategy to the member state within 12 months of receiving recapitalization aid in which it lays out the intended use of the aid and provides a repayment schedule. (Para. 37, points 79–82.) The member state must report to the Commission whether the company is complying with the repayment schedule and governance measures. If the state’s intervention is not reduced to 15% of the shares within six years of receiving the aid for public companies or seven years for private companies, the Commission must approve a new restructuring plan. (Para. 37, points 84–85.)

Governance Measures

The receiving company is prohibited from engaging in aggressive economic activities, such as undertaking aggressive and excessively risky commercial expansion, advertising for commercial purposes that it has received the aid, and cross-subsidizing economic activities of integrated companies that were already in financial difficulty on December 31, 2019. Until the recapitalization measure is fully redeemed by the receiving company, it cannot make dividend payments or buy back shares other than those bought by the state. Until at least 75% of the recapitalization measure is redeemed, the remuneration of the management at the receiving company cannot be increased; no bonuses can be paid out; and the companies, with the exception of small- and medium-sized enterprises, can acquire no more than a 10% stake in their competitors in the same line of business. (Second amend. para. 37, points 71–78.)

Large companies are also required to report on the ways in which they have utilized the recapitalization aid in accordance with the EU’s objectives for green and digital transformations, including the objective of “climate neutrality by 2050.” (Paras. 9–10; 37, points 44, 83.)

Aid in the Form of Subordinated Debt

In the second amendment, the Commission also introduces the possibility of providing subordinated debt at reduced interest rates to companies in need. Even though subordinated debt cannot be converted to equity while the company is still in financial difficulty, it increases the borrowing capacity of the company. Aid in the form of subordinated debt must fulfill the conditions for debt instruments set out in section 3.3 of the Temporary Framework, which concerns aid in the form of subsidized interest rates for loans. If the amount of granted subordinated debt exceeds the amounts set out in that section, it would be subject to the same safeguard measures established for recapitalization measures. (Temporary Framework paras. 27 (d), 27(bis); second amend. paras. 11, 28–32.)

Other Amendments

Lastly, the second amendment makes clerical modifications and additional clarifications for state aid measures in

  • section 3.1 (limited amounts of aid),
  • section 3.2 (aid in the form of guarantees on loans),
  • section 3.3 (aid in the form of subsidized interest rates for loans),
  • section 3.4 (aid in the form of guarantees and loans channeled through credit institutions or other financial institutions), and
  • section 3.7 (investment aid for testing and upscaling infrastructures) of the Temporary Framework. (Second amend. paras. 17–36.)

Prepared by Zeynep Timocin Cantekin, Law Library intern, under the supervision of Jenny Gesley, Foreign Law Specialist.

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United States: Supreme Court Rules Victims of State-Sponsored Terrorism May Recover Punitive Damages under Foreign Sovereign Immunities Act

(June 2, 2020) On May 18, 2020, the U.S. Supreme Court unanimously held that the Republic of Sudan could be held liable for $4.3 billion in punitive damages related to state-sponsored acts of terrorism that occurred in 1998. (Opati v. Republic of Sudan, No. 17-1268 (May 18, 2020).)

Case History

In 1998, al-Qaida orchestrated simultaneous attacks at U.S. embassies in Kenya and Tanzania. These attacks killed 224 people and injured another 5,000. Evidence later emerged that the Sudanese government had provided a safe haven to al-Qaida in the period leading up to the attacks, including giving members of the organization Sudanese passports and permitting the transportation of money and weapons across the Sudan-Kenya border to an al-Qaida cell in Kenya. On the basis of this information, a group of victims and family members of the decedents filed a lawsuit against Sudan in federal court under an exception to the Foreign Sovereign Immunities Act (FSIA).

Foreign Sovereign Immunities Act

The FSIA generally provides that foreign states are immune from jurisdiction in federal and state court. The statute at the time this litigation commenced had a number of exceptions to immunity, including an exception for state-sponsored acts of terrorism. Additionally, the act at that time allowed for certain damages, including economic damages and loss of consortium, but strictly barred punitive damages.

After multiple federal courts ruled that this exception to the FSIA waived immunity but did not create a new cause of legal action, Congress amended the FSIA in the 2008 National Defense Authorization Act. The amendments had multiple components. To start, the state-sponsored terrorism exception was moved to a new section of the U.S. Code, which freed it from the FSIA’s prohibition against punitive damages. Second, the amendments created a cause of action for certain individuals, including U.S. nationals, members of the armed forces, U.S. government employees and contractors, and their legal representatives. Next, Congress made this law retroactive, meaning that parties who were adversely affected by an inability to sue a foreign government under federal statutes before the law’s enactment could file a lawsuit for damages. Finally, the amendments granted individuals a brief window of time to file new lawsuits or claims on matters that were relevant to the act and had already been filed in court.

Application of the FSIA Amendments

After the amendments were enacted, the plaintiffs amended their complaint to include the new cause of action and added hundreds of new plaintiffs to the case. In a consolidated bench trial the United States District Court for the District of Columbia ruled that the Republic of Sudan was liable for the plaintiffs’ injuries and appointed seven special masters to assess damages. The District Court ultimately awarded $10.2 billion in damages, including $4.3 billion in punitive damages. Sudan appeared in the case and appealed to the United States Court of Appeals for the District of Columbia Circuit. The Court of Appeals reversed the District Court’s ruling, holding that the amendments to the FSIA did not expressly provide for punitive damages awards, thereby cutting that portion of the award. The U.S. Supreme Court granted review and reversed the Circuit Court’s decision.

The Supreme Court’s holding focused on the FSIA’s language related to punitive damages. Sudan argued, in part, that the statute’s amendments were ambiguous regarding punitive damages awards and asked the Court to adopt a “super-clarity” rule when Congress enacts legislation that applies retroactively. In rejecting Sudan’s arguments, the Supreme Court noted that “Congress was as clear as it could have been when it authorized plaintiffs to seek and win punitive damages for past conduct using [the statute’s] new federal cause of action.” (Opati, slip op. at 8–9.) The Court further remarked, “Congress proceeded in two equally evident steps: (1) It expressly authorized punitive damages under a new cause of action; and (2) it explicitly made that new cause of action available to remedy certain past acts of terrorism.” (Slip op. at 9.)

The case has now been remanded to the Court of Appeals for further proceedings. Justice Neil Gorsuch authored the unanimous opinion. Justice Brett Kavanaugh took no part in this case.

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Peru: Public Sector Employees to Work Remotely until End of Year

(June 1, 2020) On May 10, 2020, the government of Peru issued Legislative Decree No. 1505, authorizing public entities to implement remote work until December 31, 2020, for public sector workers confronting the COVID-19 health emergency. The exceptional temporary measures are aimed at ensuring that civil servants return to their workplaces gradually, under conditions that guarantee their safety, health, and labor rights.

The exceptional measures allowed under the decree include the following:

  • performing remote work, when possible, with alternating days of remote work and on-site service
  • loaning civil servants computer equipment to carry out remote work, when appropriate
  • reduced work day
  • modified work schedule
  • establishing shifts of on-site work, in combination with remote work, when possible
  • providing transportation for civil servants commuting to their workplaces or when they require transportation to carry out their duties
  • providing civil servants with personal protective equipment
  • monitoring the health of civil servants

In adopting these measures, the special needs of disabled public servants must be taken into consideration.

Public servants may also get job training, preferably online.

Workers who are under special paid leave due to COVID-19 will be required to recover the time not worked once the state of emergency is over and they return to on-site work, even if that is during 2021.

Exceptionally, until December 31, 2020, and depending on the service’s needs, civil servants may be assigned new functions or vary the functions already assigned, regardless of their labor regime, on the basis of their professional profile and work experience.

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Australia: Privacy Protections Applicable to COVID-19 Contact Tracing App Enacted

(May 29, 2020) On May 15, 2020, the Privacy Amendment (Public Health Contact Information) Act 2020 (Cth) was enacted in Australia. The act adds a new part to the Privacy Act 1988 (Cth) that specifically regulates the use and disclosure of data collected when people download and use the Australian government’s COVID-19 contact tracing mobile phone application, COVIDSafe.

About the App

The COVIDSafe app was launched on April 26, 2020. The app is voluntary to download and uses Bluetooth to detect and record a person’s contacts with other users; it does not record location information. The app generates encrypted references codes for each user and also stores, in an encrypted form, the date, time, and proximity of a user’s contacts on their phone. Users are unable to access this information. User contacts are automatically deleted 21 days after they have been stored on the phone.

When a user tests positive for COVID-19, state and territory health officials who undertake contact tracing will ask the user for permission to upload the data from the app into a central storage system. The information will then be used to support their usual contact tracing processes.

At the end of the pandemic, users will be prompted to delete the app, and all information in the central storage system will also be deleted.

The privacy policy applicable to the app is available online.

Interim Determination

At the time the app was launched, the minister for health issued an interim determination under the Biosecurity Act 2015 (Cth) containing privacy protections that would apply until primary legislation was enacted. The provisions of the determination ensured that data from the app would be used only to support contact tracing efforts; required that users consent to have data from their device uploaded to the data store; prevented app data from being retained or disclosed outside Australia; required that all data in the data store be deleted at the end of the pandemic; and provided that no one can be forced to download or use the app or upload data to the data store. A breach of these requirements was made a criminal offense.

Legislation

The government introduced a bill to enshrine and extend the above protections into law on May 12, 2020. The bill was enacted on May 15, 2020. The resulting Privacy Amendment (Public Health Contact Information) Act 2020 contained additional protections that included providing for the national privacy regulator—the Office of the Australian Information Commissioner (OAIC)—to have oversight of the app data; extending the Privacy Act’s Notifiable Data Breaches provisions to apply to the app data; legally obligating the administrator of the data store to delete registration data on request; setting out a process for data to be deleted at the end of the pandemic; and requiring that the minister for health and the OAIC submit reports regarding the app.

Impact of the App

On May 24, 2020, the minister for health stated that the COVIDSafe app had reached six million downloads (about 23% of the total population) and that it is “helping state and territory public health officials automate and improve manual contact tracing of the coronavirus.” He further stated that “the COVIDSafe app is playing a significant role in Australia’s world-leading health response to the coronavirus pandemic, with several countries having expressed interest in learning from its positive impacts in Australia.”

However, various commentators have raised concerns about the app, including its effectiveness and privacy implications, and have argued that use of the data by state and territory officials has so far been very limited.

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