26 April 2020
A new bill (no.7567) on professional payment guarantee has been submitted to Parliament, the purpose of which is to create a new type of personal security under Luxembourg law, in addition to existing instruments, such as personal guarantee (cautionnement) and autonomous guarantee (garantie autonome). The new framework will apply to professional transactions and is intended to provide the parties with greater contractual freedom, while preserving legal certainty and protecting against re-qualification. Although the new bill is not directly related to COVID-19, the Luxembourg Finance Minister has stated that this regime introduces a new tool which can be used to implement certain anti-crisis measures in the context of the fight against the pandemic. This briefing describes key features of the new instrument.