We would like to bring to your attention that on October 18, 2023, the Knesset passed the Law on Postponement of Deadlines (Temporary provisions – Swords of Iron) (Contract, Verdicts or Payment to the Authority) 5784-2023 (“Temporary Provision”), and on November 7, 2023 as well as on December 7, 2023, the Minister of Defense extended the performance deadline under the Temporary Provision.
Key Terms of the Temporary Provision
1.The Temporary Provision applies to obligations that were due between October 7, 2023 to December 31, 2023 (the “Protected Term”).
2.The Temporary Provision applies to the following persons who have been in any of these roles during the Protected Term or any part thereof: soldiers (including reserve soldiers), cops, prison guards in certain roles (operational roles, prison guards in security prison wing, etc.), firefighters, missing people, kidnapped, captives, civilians that were evacuated from the southern and northern conflict zones, workers and full time volunteers in Magen David Adom (i.e., Israeli National EMS) and similar organizations, people who were injured due to the “Swords of Iron” War and who were hospitalized for at least 7 days, estates of the terror victims, and the spouses of the aforementioned people as long as they are jointly liable to the obligation.
3.The Temporary Provision also applies to certain entities such as a company that have no more than 5 shareholders and that the controlling shareholder (holding at least 50% of the issued and outstanding shares) is a solider (including reserve soldiers), cops, the abovementioned prison guards, firefighters, missing people, kidnapped, captives, and civilians that were evacuated from the southern and northern conflict zones listed in an annex to the Temporary Provision, and as a partnership where the a member of one of the groups mentioned in this section 3 above participates in the management of the partnership and controls at least 50% of the partnership’s assets.
All the persons and entities mentioned in sections 2 and 3 above will be referred to as “Protected Parties” and each of them a “Protected Party”.
4.The deadline for a Protected Party’s action arising from an agreement (including checks and promissory notes) that is due during the Protected Term will be postponed by 85 days or until December 31, 2023, as the earliest of the two (the “Postponement Period”) as long as the Protected Party delivered a notice to the other party to such contract (if such notice was delivered, then it is presumed that such person or entity was a Protected Party, unless proven otherwise).
5. Postponement of monetary debt pursuant to the Temporary Provision will not incur any penalty interest fees.
6. Due dates, which were set by a court or tribunal or by a final decision of another body or person with judicial powers according to law and which apply during the Protected Term, will be postponed with respect to protected parties for the entire Postponement Period (without the need to provide notice thereof).
7. Payment dates to a governmental authority, municipality, and other bodies and persons performing public functions according to law that apply during the Protected Term, will be postponed with respect to protected parties for the Postponement Period (without the need to provide notice thereof, other than injured and volunteers for the rescue forces where notice will be required).
Exceptions to the Temporary Provision
8. The Temporary Provision does not apply to: (a) contracts in which both parties are Protected Parties; (b) employment agreements; (c) payment of alimony (due to an agreement or ruling); (c) credit card payments for goods or services that have already been supplied; or (d) payment of a fee for an online service requested by a Protected Party during the Protected Term.
Amendment, Expansion and Extension of validity of the Temporary Provision
9. he Minister of Defense, with the consent of the Minister of Finance and the approval of the Knesset’s Foreign Affairs and Security Committee, may add to the list of settlements whose residents will be defined as Protected Parties.
10. The Minister of Defense, with the consent of the Minister of Justice and the Minister of Finance, and in consultation with the Minister of the Interior and with the approval of the Foreign and Security Committee of the Knesset, may, by decree: (a) extend the Protected Term (in one or more increments) – the condition that the Protected Term will not be extended beyond December 31, 2023; (b) to extend the Postponement Period for holding charges beyond 30 days; and (c) to take any of these actions only with reference to certain groups of Protected Parties or certain types of charges (due to an agreement, judgment, etc.).
*The review was written by Amir Zolty, Partner and Head of Hi-Tech Practice. Technology. Corporate. M&A Department.
* Clarification: What is stated in this memo is general information only and does not constitute legal advice that requires an in-depth and specific examination of each subject on its own merits.
*We are at your disposal for any questions and/or clarifications.