[On 17th November 2020, we posted an article about some proposed legislation in the United Kingdom, called the National Security and Investment Bill 2020 [1] . We recently became aware of some legislation which has been passed in Poland in relation to the screening of foreign investments.

This post is based exclusively on an excellent and informative article [2] by Mr Szymon Golebiowski and Ms Patrycja Sojka on the topic, entitled 'New Law On Control of Foreign Investments in Poland' . Mr Golebiowski a Senior Associate at the global law firm Messrs Taylor Wessing [3], Warsaw, and Ms Sojka is an Associate at the same firm. We would like to express our thanks to Mr Golebiowski, Ms Sojka, and Messrs Taylor Wessing for their kind permission to use their article for the purpose of creating this post and the comprehension exercise that follows it. All credit for the excellent content goes to the original authors, and all blame for any errors in ‘translation’ is exclusively ours.]

On 24th June 2020, a new Act entered into force in Poland which introduced a domestic scheme of screening foreign investments. The purpose of the Act is to protect the domestic Polish market against hostile acquisition by entities taking advantage of the Covid-19 outbreak. [paragraph 1]

The Act has a long title. It is called ‘The Act on Subsidies for Interest Rates on Bank Loans Granted to Entrepreneurs Struck by Effects of Covid-19 and on Simplified Settlement Proceedings in the Context of the Covid-19 Outbreak’ (for short, the ‘Anti-Crisis Shield 4.0’ or the ‘Shield 4.0’). The Act entered into force on the 24th July 2020 and we understand it is to remain in force for two years (until 24th July 2022). [paragraph 2]

Administrative control over investments in Poland is not a new concept. A system was introduced in 2015, entitled the Control of Certain Investments Act. This Act empowered the minister of state assets, the minister of defence and the minister of maritime economy to veto investments which resulted in acquiring 20% or more shareholding in certain strategic industries, including energy, explosives, chemicals, and telecommunications. [paragraph 3]

Shield 4.0 introduces significant amendments to the 2015 Act. These amendments include some investments in Polish businesses from non-European Economic Area (EEA) and Organisation for Economic Cooperation and Development (OECD) entities which would require the approval of the Polish Competition Authority (the ‘PCA’). [paragraph 4]

The jurisdiction of the PCA will cover two types of transactions:

· Acquisition of dominance which is (in general) tantamount to acquisition of control as defined by the applicable merger control legislation – essentially, exercising decisive influence over another entity);

· Acquisition of significant participation. This is defined as holding at least 20% of shares (including an increase of participation to 40% or higher shareholding) [paragraph 5]

In order to be subject to notifications obligations, the target (direct or indirect) should meet the following criteria:

· It should have its corporate seat in Poland

· Its annual turnover exceeded 10 million euros in the territory of Poland in any of the two financial years preceding the notification

· It is a listed company or operates in one of a number of specified activities (for example, developing software for certain industries, providing cloud computing services, etc) [paragraph 6]

There is a ‘standstill obligation'. As with merger controls, the parties have to refrain from finalising the transaction until clearance is granted. [paragraph 7]

There is also a review procedure. Notification should be made by ‘the active party’ directly involved in the transaction; for example, a direct purchaser. The notifying party must submit certain information, including the ownership structure of the target entity, the economic and financial situation of the notifying party, and the notifying party’s intentions with regard to the target business. The PCA then has 30 working days to conduct the initial review proceedings. [paragraph 8]

There may be a decision to block the proposed transaction if, for example, the notifying party fails to submit complete information or documents within the appropriate deadline, or if there is at least the potential threat for public order or public safety in Poland or public health in Poland. [paragraph 9]

There are strong sanctions if a transaction is effected without the PCA’s clearance or in violation of a prohibition decision. Such transactions are null and void. There may also be criminal liability, with fines of up to PLN 50 million and/or imprisonment of between 6 months and 5 years in certain circumstances. [paragraph 10]





Find a word or phrase in the text which means:

1. To begin to have legal effect or validity (paragraph 1)

2. To examine something carefully for a particular purpose (paragraph 1)

3. Unfriendly or aggressive (paragraph 1)

4. Money which is given as part of the cost of something or to help something to happen (paragraph 2)

5. People who set up a business in the hope of making a profit (paragraph 2)

6. Given the authority to do something (paragraph 3)

7. The authority or right to reject something (paragraph 3)

8. An allocation of ownership of pieces of a company (paragraph 3)

9. Changes or modifications (for example, to legislation or a contract) (paragraph 4)

10. Being almost the same, or having the same effect, as something (paragraph 5)

11. The amount of money taken by a company in a particular period of time (paragraph 6)

12. The procedure of reviewing and deciding about whether one company can join with another company [paragraph 7]

13. A day and/or time when something must be done by [paragraph 9]

14. An official order which has the effect of stopping something and is usually a kind of punishment [paragraph 10]

15. Of, or having, no legal or legally binding effect [paragraph 10]


1. entered into force – to enter into force

2. screening - to screen

3. hostile

4. subsidies

5. entrepreneurs

6. empowered

7. veto

8. shareholding

9. amendments

10. tantamount (to)

11. turnover

12. merger controls

13. deadline

14. sanctions

15. null and void

Cambridge Legal English Academy 2021

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