Bahrain’s reaction to the global pandemic

As published on May 13th, 2020

By William Reichert, Jonathan Fisher & Sarah Alaiwat
Charles Russell Speechlys

The world is in unchartered territory with different national governments implementing differing strategies and measures to combat the impact and spread of Covid-19, all of which continue to have an impact on the world’s economy, business and individuals.

The Government of Bahrain, spearheaded by the National Taskforce for Combating the Coronavirus, and its associated ministries and authorities have been quick to implement their own strategies to limit both the spread of Covid-19 and its impact upon Bahrain’s economy, with such strategies receiving high praise from the World Health Organisation.

In order to limit the spread of Covid-19 within the country the Government of Bahrain has implemented various limitations and requirements and continues to monitor and extend the applicable timeframes for the same, such as:

• Travel limitations: including entry bans for all travellers except for Bahraini nationals, residents, diplomats and those travelling with prior permission granted letters; no visas being granted; all arrivals being tested for Covid-19;
• Quarantine requirements: all those entering Bahrain will be subject to a quarantine period of 14 days, regardless of the result of their Covid-19 test, and will be electronically tagged for the duration of their quarantine. Failure to quarantine for the requisite period of time can result in imprisonment of up to three months and a fine of up to BHD10,000;
• Health:
  • the introduction of social distancing regulations, whereby gatherings of more than five individuals in public places are banned;
  • a requirement for individuals to always maintain a gap of no less than one meter between one another;
  • the closure of nurseries, schools and universities, with such closures in place since late February;
  • the requirement for all people to wear face masks in public;
• Consumer protection:
  • the issuing of resolutions by the Ministry of Industry, Commerce & Tourism fixing the maximum prices chargeable for products such as face masks and disinfectants and prohibiting the exporting of such products for a period of three months;
  • Commercial and industrial businesses providing goods or services directly to customers have reopened and resumed work but must adhere to the following conditions:
    • Employees and visitors to wear face masks;
    • Reduced number of employees in any facility and active prevention of overcrowding so as to ensure social distancing;
    • Continuous sterilisation of stores, including external areas;
    • Any queuing outside stores must be in accordance with social distancing measures;
  • Safety:
    • the closure of all non-essential businesses beyond 7 May including:
      • Movie theatres to remain closed;
      • All commercial sports gyms, fitness studios, swimming pools and recreational activities to remain closed;
      • Activities of restaurants, tourist facilities and places for serving food and beverages to remain limited to external orders and delivery services;
      • Shisha cafes to remain closed, with services offered by such cafes to be limited to takeout and delivery of food and beverages only;
      • Salons, hairdressers etc. to remain closed;
      • All non-essential medical services provided by private health clinics are to remain suspended;
      • First hour at grocery stores to remain for the elderly and pregnant women only;
    • Private sector enterprises encouraged to:
      • Maintain remote working;
      • Limit the number of employees at a location and those present to adhere to social distancing measures;
      • Reduced number of employees on corporate transportation and protection for those expatriate workers living in dormitories;
    • Law and order:
      • a prohibition by the General Directorate of Bahrain’s Criminal Investigation and Forensic Science on rumours and the spreading of fake news, with those spreading such information facing prosecution; and increased police patrols enforcing social distancing regulations; and
      • the implementation of various police directorates to ensure the safety of citizens and residents, including steps to promote social distancing and distribution of multi-language information publications.

In order to help stabilize the economy, the Government of Bahrain has recently announced a BHD4.3 billion ($11.4 billion) stimulus package to mitigate the economic impact of Covid-19 for both individuals and businesses, which includes the following key policies:

• Implementing a draft law regarding the payment of salaries of all private sector employees for three months from April 2020 from the unemployment fund pursuant to constitutional procedures and Bahrain’s Social Insurance Law;
• Paying the Electricity and Water Authority utility bills for individuals and businesses for three months from April 2020 (up to the value of such bills for the same period in 2019) with corresponding restructuring of the government’s administrative costs to offset additional costs incurred;
• Exemption from municipal fees for three months from April 2020 for all individuals and businesses;
• Exemption of industrial land rental fees for all businesses for three months from April 2020;
• Exemption of tourism levies for all tourism-related industry for three months from April 2020;
• Increasing the size of the Liquidity Support Fund two-fold to BHD200 million ($530 million);
• Increasing the Central Bank of Bahrain’s loan facilities to BHD3.7 billion ($9.8 billion) to allow the deferment of debt instalments and the extension of additional credit; and
• Redirection of all Tamkeen (the government agency responsible for the provisions of loans and assistance to businesses) programmes to support adversely affected businesses and the restructuring of debts issued by Tamkeen, including:
  • Payment of a maximum monthly sum of BHD300 offered to 950 taxi drivers and bus drivers and 829 driving trainers who do not have commercial registration or a pension for a period of three months; and
  • Payment of full salaries of 422 employees in kindergartens and 102 others in nurseries who are not covered by insurance.

Government ministries and authorities have implemented other regulations and procedures aimed at mitigating the detrimental impact of Covid-19, such as:

• The Central Bank of Bahrain has introduced several regulatory measures, including:
  • Borrowers or credit card holders are to be offered a deferral of repayment instalments for a period of six months with no additional fees or increase in interest (i.e. interest on interest);
  • Relaxation of the loans-to-value ratio for new residential mortgages for Bahrainis;
  • Increasing the maximum amount permitted by contactless payments to BHD50 ($133) from BHD20 ($53);
  • Capping merchant fees imposed on debit card transactions to 0.8%;
  • Provision to retail banks of concessionary repo arrangements for a period of up to six months at zero per cent interest, on a case-by-case basis;
  • Reduction of the cash reserve ratio for all retail banks to 3% from 5%;
  • Reduction of its one-week deposit facility, overnight deposit, one-month deposit and lending rates;
  • Prohibiting retail banks from blocking the accounts of customers who have either lost their employment or have retired if that customer has a financing arrangement with the bank; and
  • Requiring all foreign exchange companies to sterilise all currency, both local and foreign, which includes either exposing currency to ultraviolet irradiation or high temperatures of isolation of currency for a minimum of three days.
• The Ministry of Industry, Commerce and Tourism has extended the filing date for returns due pursuant to the Economic Substance Regulations from 31 March 2020 to 30 June 2020 for those businesses whose financial year ended 31 December 2019;
• The Labour Market Regulatory Authority has terminated monthly work fees and fees for issuing and renewing work permits for a period of three months from April 2020, in line with the Government’s stimulus package;
• The Ministry of Justice, Islamic Affairs and Endowments has announced that the High Criminal Courts, High Civil Courts, Administrative Courts and Lower Criminal Courts will take part in televised court proceedings;
• The Real Estate Regulatory Authority is now offering all of its services to licensed customers online;
• The National Health Regulatory Authority has commenced the granting of licences to private hospitals so that those so desiring can be treated at such hospitals, and for the conversion of certain hotels into quarantine centres, if required;
• Bahrain Clear has provided a new service enabling the management of the general assemblies of listed companies to meet remotely;
• The Information and eGovernment Authority launched the “BeAware Bahrain” application which advances contact tracing efforts to identify and track active cases of Covid-19;
• The Ministerial Committee for Financial and Economic Affairs and Financial Balance have had approved their recommendations to reduce port operating costs and maritime fees meaning the handling charges for bulk materials such as sugar, gypsum, iron and sponge iron will be reduced by 20% in response to market dynamics;
• The General Directorate of Civil Defence continues to disinfect and sterilise areas across Bahrain; and
• The creation of an online platform, accessible at mall.bh, to which all businesses, including small and medium-sized businesses, can register with the aim to bolster online sales.

A campaign to raise donations in support of national efforts to combat Covid-19 and to mitigate the spread of Covid-19 has been announced, led by the Crown Prince with active support and donations from Shaikh Nasser, among others. The Royal Humanitarian Foundation is in tandem with other efforts and initiatives led by the Supreme Council for Women, Ministry of Justice, Islamic Affairs and Endowments and in cooperation with the Council of Representatives and the Bahrain Chamber of Commerce and Industry.

Gulf Air continues to assist the relevant authorities with the repatriation of Bahraini citizens as part of Bahrain’s International Covid-19 Repatriation Programme.

Other entities such as banks and professional organisations have implemented their own practices, such as increasing daily ATM withdrawal limits and promoting working from home policies.

There have been various medical-related measures implemented, including:

• Specialised medical teams, in collaboration with the General Directorate of Civil Defence, are conducting field visits across Bahrain, collecting random medical samples via mobile screening units. The random samples involve collecting samples from 20 individuals from each housing block on a daily basis, with such individuals then required to attend the new drive-through testing facility;
• The launch of a drive-through testing centre at the Bahrain International Exhibition and Convention Centre by the Ministry of Health;
• The availability of Bahrain’s current testing, quarantine, isolation and treatment capacity, which, as of 28 April, was as follows:
  • Public isolation and treatment capacity of 2473 beds, of which 1506 are being used;
  • Private isolation and treatment capacity of 136 beds, of which 50 are being used;
  • Public quarantine capacity of 1673 beds, of which 902 are being used; and
  • Private quarantine capacity of 801 beds, of which 20 are being used;
• The suspension of the BHD7 medical consultation fee charged at hospitals on health fees for non-Bahrainis;
• The construction of a new temporary intensive care unit, which was built in seven days and contains 130 beds for the treatment of critical active Covid-19 cases;
• Bahrain continues to update its treatment protocols in line with global research and will start treating active cases using convalescent plasma therapy, which has been used successfully in a number of countries, with such plasma taken from those individuals who have successfully recovered from Covid-19; and
• The MOICT releases updates on the availability of personal protective equipment, such as an announcement that 1,000,000 medical face masks had been provided to pharmacies and supermarkets and enforcing a maximum price at which such face masks can be sold for.

There has been an increase in active cases in the past few weeks, particularly in labour camps housing expatriate workers, although the curve in Bahrain is now starting to flatten. The Ministry of the Interior has identified locations to which some expatriate works will be moved in order to reduce the density of people within existing expatriate workers’ accommodation.

Prior to the commencement of Ramadan, HE the Minster of Health, whilst recognising that social and religious gatherings are central to Ramadan, noted that social distancing measures should still be adhered to, namely:

• Iftar (breaking fast) should be limited to small family gatherings;
• Refraining from organising and/or attending Ramadan Majlises and Ghabgas;
• Refraining from hosting public Iftar banquets;
• Refraining from Gerga’oun and Weda’ gatherings;
• Refrain from the public distribution of Iftar packages; and
• Zakat Al-Fitr kiosks will be replaced with electronic platforms and applications for the collection and distribution of Zakat Al-Fitr.

New polices and restrictions will likely continue to be implemented in the weeks to come. The best way to stay informed of the latest developments is to check official sources, such as the Ministry of Health’s website or other government sources.

For more information, please contact William Reichert at william.reichert@crsblaw.com.

Authors

William Reichert
+971 4 246 1972
William.reichert@crsblaw.com

Jonathan Fisher
+973 1713 3207
Jwfisher@crsblaw.com

Sarah Alaiwat
+973 17133200
Sarah.alaiwat@crsblaw.com