Financial Provisions (Covid-19) Act 2020

1. Definitions

1. In this Act—

“Contribution Agreement” means the Contribution Agreement, the terms of which are set out in Schedule 2, to be entered into between the State and the EIB and providing for a contribution by the State to the Fund;

“EIB” means the European Investment Bank;

“Fund” means the Fund (the Pan-European Guarantee Fund), the subject of a resolution of the board of directors of the European Investment Bank of 26 May 2020, and which Fund will be established in the circumstances as provided for in that resolution;

“Fund Guarantee” means the guarantee agreement, the terms of which are set out in Schedule 3, to be entered into between the State and the EIB so as to provide a guarantee, on the part of the State, in relation to transactions carried out under the Fund;

“Minister” means the Minister for Finance;

“SURE Guarantee” means the guarantee agreement—

(a) as provided for in paragraphs (2) and (3) of Article 11 of the SURE Regulation, and

(b) the terms of which agreement are set out in Schedule 1,

to be entered into between the State and the European Commission so as to provide the guarantee, on the part of the State, referred to in that Article 11;

“SURE Instrument” means the European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) established in Article 1 of the SURE Regulation;

“SURE Regulation” means Council Regulation (EU) 2020/672 of 19 May 2020[^2] on the establishment of a European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) following the COVID-19 outbreak.

2. Application of section 8

2. (1) If, on the commencement of section 8, the Fund has not been established due to the relevant circumstances not being, at that time, met, then that section shall not apply unless and until the occasion occurs on which those circumstances come to be met.

(2) In subsection (1), “relevant circumstances” means the circumstances as provided for in the resolution of the board of directors of the European Investment Bank of 26 May 2020.

3. SURE Guarantee may be entered into by State

3. (1) The State may enter into the SURE Guarantee.

(2) For the forgoing purpose—

(a) the Minister may execute the SURE Guarantee and enter into the commitments provided under that guarantee, and

(b) the Minister shall have all such powers as may be required to do any thing necessary or expedient to be done for the purposes of the State’s performing its obligations under the SURE Guarantee.

4. Payments out of Central Fund related to SURE Guarantee

4. There may be paid out of the Central Fund, or the growing produce thereof, such sums, not exceeding, in the aggregate, the sum of €483,401,250, as may be required to enable the State to comply with its obligations under the SURE Guarantee.

5. Payment into Exchequer related to SURE Guarantee

5. All moneys received by or on behalf of the State by way of repayment of sums paid in accordance with the SURE Guarantee shall be placed to the credit of the account of the Exchequer and shall form part of the Central Fund and be available in any manner in which that Fund is available.

6. Reporting in relation to demands under SURE Guarantee

6. (1) This section applies in the event of a demand, under the SURE Guarantee, being made of the State to make a payment in accordance with the terms of that guarantee; a reference in any subsequent subsection of this section to a demand under the Guarantee being made is a reference to such a demand of the State being made.

(2) On the first occasion of a demand under the Guarantee being made (in this section referred to as the “first demand”), the Minister shall cause to be laid before Dáil Éireann—

(a) within one month from that occasion, a statement as provided under subsection (3)(a),and

(b) within one month from each anniversary of that occasion, a further statement as provided under subsection (3)(b).

(3) A statement under subsection (2) shall—

(a) in the case of the statement referred to in paragraph (a) of it, specify—

(i) the sum the subject of the first demand (and, if such has been paid by the State by the time of the statement’s preparation, the sum paid by the State on foot of that demand pursuant to the SURE Guarantee), and

(ii) any sums repaid to the State in accordance with the SURE Guarantee during the period preceding the statement’s preparation,

and

(b) in the case of a statement referred to in paragraph (b) of it, specify—

(i) any sum paid by the State on foot of the first demand pursuant to the SURE Guarantee, and

(ii) any sums repaid to the State in accordance with the SURE Guarantee,

during the period beginning on the preparation of the statement referred to in subsection (2)(a) and ending on the preparation of the statement referred to in subsection (2) (b) or, in the case of the second or any subsequent statement referred to in subsection (2)(b), during the period of 12 months preceding the preparation of the particular such statement.

(4) On the second or any subsequent occasion of a demand under the Guarantee being made, the Minister shall cause to be laid before Dáil Éireann, within one month from the occasion of that second or subsequent demand, a statement specifying the sum the subject of that second or subsequent demand; the laying of any such statement shall not relieve the obligation of the Minister to lay any statement required to be laid by subsection (2) (and any latter statement shall, in addition to the matters specified in subsection (3), specify the sum, if any, paid by the State, on foot of the second or subsequent demand, pursuant to the SURE Guarantee during the period to which that latter statement relates).

(5) This section shall cease to apply on the date the State is released from its obligations under the SURE Guarantee or when all sums paid by the State under the SURE Guarantee are repaid to the State in accordance with that guarantee’s terms.

7. Contribution Agreement and Fund Guarantee may be entered into by State

7. (1) The State may enter into—

(a) the Contribution Agreement, and

(b) the Fund Guarantee.

(2) The amount that may be contributed by the State to the Fund under the Contribution Agreement and the amount that may be paid by the State under the Fund Guarantee shall not, in aggregate, exceed €167,500,000.

(3) For the purpose of subsection (1)—

(a) the Minister may execute the Contribution Agreement and enter into the commitments provided by that agreement,

(b) the Minister may execute the Fund Guarantee and enter into the commitments provided by that guarantee, and

(c) the Minister shall have all such powers as may be required to do any thing necessary or expedient to be done for the purposes of the State’s performing its obligations under the Contribution Agreement and the Fund Guarantee.

(4) Subject to subsection (5), the State may agree to an amendment being made to—

(a) the Contribution Agreement, or

(b) the Fund Guarantee,

or both.

(5) If any amendment is proposed to be made to the Contribution Agreement or the Fund Guarantee, a draft of the proposed agreement providing for the amendment and containing the text of the amendment shall be laid by the Minister before Dáil Éireann and the amendment shall not be made unless and until a resolution approving the amendment has been passed by that House.

(6) Any amendment made to the Contribution Agreement or the Fund Guarantee in accordance with subsections (4) and (5) shall be published in Iris Oifigiúil by the Minister.

(7) A reference in this section or section 8 or 9 to the Contribution Agreement or the Fund Guarantee shall, where the context admits, include a reference to that agreement or guarantee as amended in accordance with subsections (4) and (5).

8. Payments out of Central Fund related to Contribution Agreement and Fund Guarantee

8. There may be paid out of the Central Fund, or the growing produce thereof, such sums, not exceeding, in aggregate, the sum of €167,500,000, as may be required to enable the State to comply with its obligations under the Contribution Agreement and the Fund Guarantee.

9. Payment into Exchequer related to Contribution Agreement and Fund Guarantee

9. All moneys received by or on behalf of the State by way of repayment of sums paid in accordance with the Contribution Agreement and the Fund Guarantee shall be placed to the credit of the account of the Exchequer and shall form part of the Central Fund and be available in any manner in which that Fund is available.

10. Amendment of section 5 of Strategic Banking Corporation of Ireland Act 2014

10. Section 5 of the Strategic Banking Corporation of Ireland Act 2014 is amended by the insertion of the following subsection after subsection (6):

“(7) The Insurance Acts 1909 to 2018, regulations made under those Acts and regulations relating to insurance made under the European Communities Act 1972 do not apply to the giving of guarantees by the SBCI for the purpose of performing any of its functions under this Act.”.

11. Provision with respect to Third Protocol to General Agreement on Privileges and Immunities of the Council of Europe

11. (1) In this section—

“Act of 2004” means the Council of Europe Development Bank Act 2004;

“arbitral tribunal” means an arbitral tribunal established in accordance with the Loan Regulations of the Council of Europe Development Bank;

“Third Protocol” means the Third Protocol (which is set out in Schedule 2 to the Act of 2004) to the General Agreement on Privileges and Immunities of the Council of Europe done at Paris on 2 September 1949.

(2) For the avoidance of doubt, an award of an arbitral tribunal shall be enforceable in a court of competent jurisdiction in the State in accordance with Article 3 of the Third Protocol and accordingly, no check shall be required for such enforcement, other than verification that—

(a) the award is authentic,

(b) the award conforms to the rules concerning competence and procedure set forth in the Loan Regulations, mentioned in that Article 3, of the Council of Europe Development Bank, and

(c) the award does not conflict with a final judgement passed in the country concerned.

12. Short title and commencement

12. (1) This Act may be cited as the Financial Provisions (Covid-19) Act 2020.

(2) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

SCHEDULE 1 Terms of SURE Guarantee

Section 3

THE EUROPEAN COMMISSION

and

IRELAND

Voluntary guarantee Agreement Pursuant to Article 11 of Council Regulation (EU) 2020/672

SURE - European instrument for temporary support to mitigate unemployment risks in an emergency following the COVID-19 outbreak

THIS GUARANTEE AGREEMENT is between

(1)[], (“Guarantor”) one of the Member States of the European Union listed in Schedule 1; and

(2) The European Commission (“the Commission”)

Respectively a Party to this agreement.

WHEREAS

(A) Council Regulation (EU) 2020/672 on the establishment of a European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) following the COVID-19 outbreak (“Council Regulation (EU) 2020/672”) permits the Union, under circumstances contained therein, to make available financial assistance up to a maximum amount of EUR 100 000 000 000 to Member States of the European Union in the form of a loan facility according to a loan agreement (“Loan Agreement”). According to Article 6(1) of Council Regulation (EU) 2020/672, such financial assistance is to be made available by means of a Council implementing decision.

(B) Council Regulation (EU) 2020/672 has empowered the Commission on behalf of the Union to borrow on the capital markets and with financial institutions in order to finance the loan facilities (“Borrowings”).

(C) In the event of a partial or total non-payment under a Loan Agreement, the Union may risk not to have available sufficient resources to fulfil the payment obligations arising from the Borrowings.

(D) Council Regulation (EU) 2020/672 provides that the Member States of the European Union listed in Schedule 1 (together called the “Guarantors”) may contribute to SURE by counter-guaranteeing the risk borne by the Union and that such contributions shall be provided in the form of irrevocable, unconditional and on-demand guarantees. Article 11(3) of Council Regulation (EU) 2020/672 provides that the Commission is to conclude an agreement with a contributing Member State on the irrevocable, unconditional and on-demand guarantee, and that such agreement is to set out the payment conditions (a “Guarantee Agreement”).

(E) Article 11(4) of Council Regulation (EU) 2020/672 provides that a Member State who has failed to honour a call shall remain liable to honour it.

(F) Article 12(1) of Council Regulation (EU) 2020/672 provides that financial assistance shall only become available after all Member States have contributed to SURE by means of a Guarantee Agreement.

(G) Each Member State of the European Union remains fully and individually liable for the commitments that it has made in a Loan Agreement or under a Guarantee Agreement.

1.1 Guarantee

The Guarantor hereby unconditionally and irrevocably guarantees to the Union the due and punctual payment on demand of up to 100 per cent of its contribution (the “Guaranteed Contribution”) and accordingly undertakes to pay to the Union, within ten (10) Business Days (or such shorter period as is specified in this Guarantee Agreement) of receiving a written demand from the Commission in accordance with this Guarantee Agreement (a “Demand”) up to 100 per cent of its Guaranteed Contribution.

1.2 This Guarantee Agreement is solely related to Borrowings and the associated Loan Agreements that are authorised by a decision adopted by the Council before 31 December 2022 taken under Council Regulation (EU) 2020/672 as originally adopted. Any other Union borrowings on capital markets and with financial institutions and loan agreements shall not give rise to any claim or liability under this Guarantee Agreement.

1.3 Subject to Clause 5. 1, the Guaranteed Contribution of the Guarantor is equal to the value set out next to the Guarantor's name in Schedule 1 to this Guarantee Agreement. The Guarantee Contribution Key Percentage of the Guarantor is equal to the percentage set out next to the Guarantor's name in Schedule 2 to this Guarantee Agreement.

1.4 The cumulative total value of any or all Demanded Amounts and Additional Demanded Amounts (as defined by Clauses 1.6 and 1.7 respectively) on the Guarantor may never exceed the Guaranteed Contribution of the Guarantor. The Guarantor shall not be liable to pay an amount in excess of its Guaranteed Contribution.

1.5 The obligations of the Guarantor under this Guarantee Agreement and of other Guarantors under their respective Guarantee Agreements are several only.

1.6 A Demand under this Guarantee may be made by the Commission at any time before or after a scheduled interest payment or a scheduled principal payment or other amount is due (together the “Amount Due”) under Borrowings, if:

(i) the Union (for whatsoever reason) has not received in full a scheduled payment as and when due under a Loan Agreement from a Member State of the European Union being financed by Borrowings or it is notified by such Member State or becomes aware following an event of default under the Loan Agreement that such Member State will not or will not be able to make payment in full of a scheduled payment under such a Loan Agreement as and when due; and

(ii) an Amount Due is, has been or will be due under Borrowings.

In such an event, the Commission shall at its sole discretion determine an amount to be called from the Guarantors (“Amount of the Call”), up to a maximum of the Amount Due, to ensure that the Union has sufficient resources to make the necessary payment. In determining the Amount of the Call, the Commission shall draw any amount, which may be zero, that the Commission considers in its sole discretion, having regard inter alia to the total contingent liabilities of the Union (including under the Balance of Payment Facility) and the sustainability of the Union budget, that may be available under the own resources ceiling for payment appropriations.

The Commission shall make Demands on all Guarantors. The Demands shall be pro rata to the relative share of each Guarantor in the Guarantee Contribution Key.

Any Demand shall specify the Amount Due, the extent to which amounts under the own resources ceiling for payment appropriations have been drawn and the Amount of the Call and shall request in writing the Guarantor to transfer an amount equal to its Guarantee Contribution Key Percentage of the Amount of the Call (such amount being the “Demanded Amount”), in cleared funds to the account referred to in Clause 1.9. The Demanded Amount shall comply with Clause 1.4. The Guarantor unconditionally and irrevocably guarantees to the Commission the due and punctual payment of the Demanded Amount on demand and the Guarantor shall transfer the Demanded Amount in accordance with the terms of such Demand. The transfer shall occur within ten (10) Business Days.

As per the Loan Agreement, the Member State referred to in Clause 1.6(i) shall within two (2) Business Days of the Demand being made notify to the Commission its ability to meet the Demand.