Restrictions for certain foreign investments in Polish companies to be incorporated by Anti-Crisis Shield 4.0

The restrictions are to apply for 24 months from the date the Act enters into force. The Polish Parliament is expected to commence formal works on the Act on 27 May 2020. Below we present a brief summary of the restrictions.

Which investors are affected?

The Act introduces certain restrictions in relation to investments contemplated by investors from outside the EU/EEA

What kind of investments will be subject to the contemplated restrictions?

The Act introduces a comprehensive definition of investments whereby the restrictions are triggered as follows:

• Acquisitions of shares resulting in exceeding the level of 20% or 40% of the shares or votes in the total number of shares or votes in a given company;
• Acquisitions of shares in profit of a given company exceeding the level of 20 % or 40% of the stake in the total profits of such company;
• Acquiring a dominant position towards the target company by: (i) acquisition of its shares leading to exceeding the level of 50 % of the shares in the total number of the shares in such company, or (ii) entering into an agreement regarding the management over such target company or transferring its profits;
• The restrictions are triggered by both direct and indirect acquisitions.

What type of companies will be protected?

The Act introduces a wide scope of investments in Polish companies which will be subject to the restrictions, provided that their annual turnover for each of the last two years exceeds EUR 10 million, which will include, i.a.,:

• Public listed companies;
• Companies owing critical (strategic) infrastructure;
• Companies developing crucial IT software, such as software for power plants, water plants, communication, payments, hospitals, transportation, food supplies etc.;
• Companies operating in strategic sectors, such as electricity, oil and gas, chemicals, defence telecommunication, medical, food etc.

What is the screening procedure?

The screening procedure foreseen in the Act is modelled on the current procedure for antimonopoly clearance. As a rule, the relevant authority (the Polish Office of Competition and Consumer Protection) must be notified prior to any acquisitions triggering the restrictions.

The procedure consists of two stages:

• Initial procedure lasting for up to 30 days after which the authority either: (i) does not raise any objections towards the contemplated acquisition, and therefore the acquisition may proceed, or (ii) issues its decision to start a formal control procedure;
• Formal control procedure lasting for up to 120 days resulting in a positive or negative decision regarding the contemplate acquisition.

What are the consequences of not following the new restrictions?

Apart from the acquisition being null and void, not complying with the procedures as foreseen in the Act may result in fines of up to PLN 50 million, or imprisonment of between six months and five years.