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POLAND: Ban on Takeovers
The Council of Minister gave the green light to the bill on the Subsidies for Interest on Bank Loans – the so-called Anti-Crisis Shield 4.0. The bill, however, contains a lot of other provisions such as article 47, which describes new rules for acquiring Polish companies. The Polish Government, following in the footsteps of countries like Germany, is going to restrict the ability of companies from outside of the European Union and the European Economic Area to acquire, merge with, or get a dominant position in a Polish company. The entity responsible for safeguarding this law will be the Office of Competition and Consumer Protection (UOKiK). The bill will be introduced during this week’s Sejm session, and its provisions may yet change.
While the initial reaction to this legislation may raise concerns on commercial freedom in Poland, it is a temporary extension on the current law: The Act on Controlling Certain Investments of 24.07.2015. It uses a similar mechanism, however concerning a limited range of entities and according to a list drawn up by the Council of Ministers.
The key tenet of the new bill is that every attempt by a non-EEA entity to: acquire, achieve significant participation in the shareholding, or gain a dominant position in a company falling into one of the “protected” categories will have to be notified to the UOKiK.
The President of the UOKiK will have 30 days to decide whether to initiate a control procedure over a transaction. If he or she chooses so, it may take up to an additional 90 days to issue a decision on the approval of the transaction.
A company protected under the new law has to have at least EUR 10 000 000 income in at least one of the two previous years and a residency in Poland as well as fall under one of the categories below:
Publicly listed company, or
Has property listed in the registry of critical infrastructure, or
Is a company building or modifying software used:
to control power plants, networks or service of facilities or systems for electricity, gas, fuel, heating oil or district heating, or
to manage, control and automatize drinking water supply or sewage treatment installations, or
to operate equipment or systems used for voice and data transmission or data storage and processing, or
for the operation of equipment or systems used for supplying cash, card payments, conventional transactions, for securities settlement and derivative transactions or for managing them, or for providing insurance services, or
to operate hospital information systems, to operate devices and systems used in the sale of prescription drugs, and to operate a laboratory information system or laboratory tests, or
to operate equipment or systems used in the transport of passengers or goods by air, rail, sea or inland waterway, road transport, public transport or in logistics, or
to operate equipment or systems used in the food supply, or
provides services for the collection or processing of data in cloud computing.
Is a company operating in one (or more) of the following sectors:
electricity production, or
production of gasoline (including diesel), or
pipeline transport of crude oil, gas or diesel, or
warehousing and storage of motor fuel, diesel oil, natural gas, or
underground storage of crude oil or natural gas, or
production of chemicals, fertilizers and chemical products, or
the production and trade of explosives, weapons and ammunition as well as technology products for military or police purposes, or
regasification or liquefaction of natural gas, or
transhipment of crude oil and its products in seaports, or
distribution of natural gas or electricity, or
transhipment in ports of primary importance for the national economy within the meaning of Art. 2 point 3 of the Act of 20 December 1996 on seaports and harbours, or
telecommunications activities, or
transmission of gaseous fuels, or
rhenium production, or
mining and processing of metal ores used for the production of explosives, weapons and ammunition as well as products and technologies for military or police purposes, or
manufacture medical instruments and devices, or
production of medicines and other pharmaceutical products, or
trading in gaseous fuels and gas abroad, or
generation or transmission or distribution of heat, or
transhipment in inland ports, or
processing of meat, milk, cereals and fruit and vegetables.
It is important to note that majority of protected sectors are already included in the Act on Controlling Certain Investments of 24.07.2015. Most notable additions are software production (for purposes listed above), banking and card payments, and the food processing industry.
Finally, the new law introduces sanctions for a failure to give notice to the UOKiK on acquiring, achieving significant participation or gaining a dominant position. Directly, an entity may face up to PLN 100 000 000 fine. Additionally, a person responsible for the decision may be sentenced for up to 5 years imprisonment for carrying out such a transaction without notice.