Polish Competition Authority issues the first decision on foreign investment control

Poland
Available languages: PL

The Polish Competition Authority (“PCA”) has issued the first decision under the new regulations on foreign investment control. The regulations have been in force since 24 July 2020 and have been implemented by the Polish government in connection with the SARS-CoV-2 virus pandemic. The provisions grant the PCA new competences to control acquisitions of Polish companies important for public order, safety or health.

The PCA approved the acquisition of Centrum Rozliczeń Elektronicznych Polskie ePłatności S.A., a Polish company active in processing cashless transactions at payment terminals, by H&F Corporate Investors VIII, Ltd., an investment fund registered in the Cayman Islands, which focuses on controlling portfolio companies operating in the sectors of specialised business software, media, financial and online services. Following the proceedings, the PCA did not raise any objections to the transaction and concluded that the acquisition does not pose a threat to public order, safety or health.

According to its statement, the PCA expects the new proceedings to be conducted quickly. The PCA pointed out that it aims at protecting the most important Polish entities but at the same time the new regulations should not block vital foreign investments for the country.

Under the new provisions, the PCA is entitled to control investments made by investors from countries outside the EEA and OECD. The mechanism of additional control covers transactions involving: (i) acquisition of an organised part of the enterprise, (ii) achievement of a significant participation (i.e. at least 20% of the shares, profits or stakes) or (iii) acquisition of dominance (the ability to decide on the course of action) in a Polish entity.

The powers of the PCA to control investments concern acquisitions of entities whose revenues from the sale of goods and services exceeded the equivalent of EUR 10 million in the territory of Poland in any of the two financial years preceding the notification, and which meet one of the following conditions: (i) is a public company, (ii) has property that has been disclosed in the uniform list of facilities, installations, equipment and services constituting the critical infrastructure, or develop or modify software to the extent indicated by the law, (iii) conduct business activities in one of the areas specified by the law (e.g. telecommunications activities, production of electricity, production of chemicals, fertilizers and chemical products or processing of meat, milk, cereal, fruit and vegetables).

The above regulations will be in force for 2 years from their entry into force. Non-compliance with the regulations may result in severe sanctions, including high financial fines or imprisonment.