New notification requirements for non-EU investors

The Polish government - under the anti-crisis activities related to the COVID-19 pandemic - submitted to the Sejm a draft Act providing for an additional requirement for non-EU (and EEA) entities investing in Polish companies. If the new provisions enter into force, certain investments in Poland - for 2 years from the effective date - will have to be preceded by obtaining additional clearance from the President of the Office of Competition and Consumer Protection ("UOKiK"). The UOKiK will check whether the investment threatens public order, safety or health.

Entities subject to the requirement

The new notification requirement will apply to entities (natural and legal persons) that do not have EU Member State citizenship or office registered in the EU (and EEA).

Investments under additional supervision

Additional supervision of the UOKiK will cover transactions involving:

1. acquisition of an organised part of an enterprise,
2. achieving substantial participation (i.e. at least 20% of stocks, shares or profit shares) or
3. acquiring dominance (capacity to decide on the directions of business activity) in a Polish entity.

Protected entities

Pursuant to the draft Act, the UOKiK will control investments concerning entities whose revenue from the sales of goods and services exceeded in Poland in any of the two financial years preceding the notification the equivalent of EUR 10,000,000 and that meet one of the following conditions:

1) they are a public company within the meaning of the Act on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organised Trading and Public Companies,

2) they own property that has been entered into the unified list of facilities, installations, equipment and services included in the critical infrastructure, or they develop or modify software in areas indicated by the Act, or

3) they carry out business activity in one of the areas specified in the Act (e.g. production of electricity, production of motor gasolines or motor oil, production of chemicals, fertilizers and chemical products, telecommunications activities, production of medicines and other pharmaceutical products, processing of meat, milk, cereals, fruit and vegetables).

Proceedings before the UOKiK

According to the draft Act, after receiving the notification, the UOKiK will conduct preliminary screening proceedings. If the transaction does not raise doubts in terms of public safety, order and health, then within 30 business days from the date of initiation of the preliminary screening proceedings the UOKiK will issue a non-opposition decision to the transaction.

If the entity submitting the notification fails to submit all the required information or there are premises justifying further, more in-depth proceedings, the UOKiK will initiate inspection proceedings. In such proceedings, a decision (authorising or prohibiting the transaction) will be issued within 120 days from the date of instituting the inspection proceedings.

Sanctions

Acquisition of a protected entity within the meaning of the Act, without notification or despite the objection of the UOKiK will be invalid.
In addition, according to the draft Act, whoever acquires substantial participation or dominance without notification, will be subject to a fine of up to PLN 50 million or imprisonment from 6 months to 5 years, or both (the same sanctions may be imposed on persons acting on behalf or in the interest of the entity that should have submitted a notification).

Persons obliged by law or contract to deal with matters of a subsidiary who, having knowledge of the acquisition, have not submitted a notification, will also be subject to a fine of up to PLN 5 million, or imprisonment from 6 months to 5 years, or both.