Poland has introduced significant amendments to the Act of 13 April 2022 on special measures relative to counteracting the support for the aggression against Ukraine and relative to national security protection (“Polish Sanctions Regulation“). See here for our previous blog post on the Polish Sanctions Regulation.
The Act of 5 August 2022 that amends the Polish Sanctions Regulation and the Act on the National Revenue Administration (“Amendment“) was published on 17 August 2022 and entered into force a day later, on 18 August 2022.
The main changes include:
- Institution of temporary compulsory administration for entities affected by Polish national sanctions (“sanctioned entities“)
- Allowing the State Treasury to acquire assets of sanctioned entities upon reimbursement
- Support measures for employees employed at the sanctioned entities.
Temporary compulsory administration
The temporary compulsory administrator may be appointed to allow the disposal of financial resources, funds or economic resources of the sanctioned entities. Temporary administration may be instituted if such a measure is necessary to ensure the continued operation of an entity conducting business in Poland:
- To maintain workplaces at the sanctioned entity
- To maintain business operations to the extent relative to public utility services or other public tasks, or
- If necessary, to protect national economic interests
When a sanctioned entity is in temporary compulsory administration, a temporary administrator may be appointed to facilitate the acquisition of the entity’s financial resources, funds and/or economic resources by the State Treasury. A temporary administrator may be appointed if necessary:
- To protect important public interests
- To protect national economic interests, or
- To ensure the national security
The decision of whether to appoint a temporary administrator will be made by the minister in charge of economic affairs (currently, the Minister of Development and Technology). According to the Amendment, the temporary administrator will be responsible for:
- Continuing the sanctioned entity’s business
- Managing the business, including the right to take any decisions otherwise vested in the sanctioned entity’s authorities and bodies
- Exercising rights vested in the sanctioned entity, including voting rights from shares held by such entity
- Ensuring that no financial resources, funds or economic resources can be used to support the aggression against Ukraine or other actions that are not in compliance with Polish Sanctions Regulation
Whenever a temporary administrator is appointed to dispose of financial resources, funds or economic resources, the administrator will be authorized to apply to the District Court for the capital city of Warsaw for consent for such disposal. However, disposal will not require court authorization if authorized by the sanctioned entity itself.
Companies owned by a majority of sanctioned entity’s employees will hold priority rights with respect to the acquisition of the sanctioned entity’s assets.
Whenever a temporary administrator is appointed to facilitate the acquisition of a sanctioned entity’s financial resources, funds and/or economic resources by the State Treasury, the administrator’s appointment will continue until the State Treasury acquires the assets.
Takeover of sanctioned entity’s assets by the State Treasury
The Amendment allows the State Treasury to acquire the assets of a sanctioned entity for the market value compensation, based on a valuation prepared by an independent entity of established market repute. Specific rules will apply with respect to real estate valuation.
No recourse against State Treasury and temporary administrator
The Amendment stipulates that the sanctioned entities will not have recourse rights against the State Treasury or temporary administrator in relation to their activities.
Employee support measures
To the extent that employee salaries (and certain other benefits) cannot be paid due to the sanctioned entity’s insolvency or insufficient funds, a sanctioned entity may apply the Guaranteed Employee Payments Fund so that the entity can make these payments to their employees, Employees will be allowed to apply for the same coverage should the sanctioned employer fail to do so. Such payments will be subject to limitations and will not last more than three months.