Due to the COVID-19 pandemic and the looming economic crisis, Poland is currently adopting legislation, under which transactions involving certain Polish companies and non-EEA investors would be subject to a new clearance obligation.
This legislation also temporarily adopts the FDI Screening regulation (Regulation (EU) 2019/452) for the period until 11 October 2020.
The new legislation has recently been adopted by the first chamber of the Polish Parliament and will now be considered by the second chamber of the Parliament and the President.
Scope of the clearance obligation
The legislation will catch a wide scope of investment projects involving Polish companies and non-EEA investors.
Based on the concept of the “protected company”, the new clearance requirement will concern companies that are registered in Poland, generated Polish turnover exceeding EUR 10 million in any of the last two financial years, and:
Furthermore, the clearance requirement applies if a non-EEA investor invests in the protected company in one of the following manners:
The notification will also be required in cases that the above listed conditions result out of indirect effects of a transaction between companies whose headquarters are outside the territory of Poland.
Finally, the clearance will need to be obtained independently from any other regulatory and antitrust approvals required under Polish law to complete the planned transaction.
Clearance procedure
Transactions involving protected companies and non-EEA investors will need to be notified to the President of the Polish Competition Authority (“UOKiK”) prior to the publication of a public tender for shares or the conclusion of an agreement underpinning the planned transaction.
UOKiK will be able to issue an objection to the notified transaction if such a transaction poses at least a potential threat to public order or public security in Poland.
The clearance procedure consists of two stages:
Sanctions
Not complying with the procedures as foreseen in the legislation results in the acquisition being null and void and may result in fines of up to PLN 50 million, or imprisonment of between six months and five years.
Entry into force
Given that the legislation is being enacted in relation to the COVID-19 pandemic, it will probably enter into force in July 2020.
The restrictions are to apply for 24 months from the date when the new legislation will enter into force.
Importantly, the restrictions will apply to transactions not completed when the legislation enters into force. In effect, all conditional transactions with an expected completion date after the legislation enters into force will need to be notified and cleared under the new legislation.
For more information contact Piotr Dynowski and Marcin Alberski