On 30 June 2022, Polish government issued a note outlining amendments to the Polish 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 on the Polish Sanctions Regulation.
The main changes to be introduced are:
a) the institution of a temporary administrator for entities targeted by Polish national sanctions (“sanctioned entities“),
b) possibility for the State Treasury to acquire assets of sanctioned entities upon reimbursement, and
c) support measures for employees employed at the sanctioned entities.
The amendment was expected to be adopted in Q2 2022, therefore developments may occur quickly.
Temporary compulsory administration
The purpose of the temporary compulsory administration will be to allow:
- the disposal of financial resources, funds or economic resources of the sanctioned entities, or
- the acquisition of sanctioned entities’ financial resources, funds and/or economic resources by the State Treasury.
The temporary administration will be allowed if the measure is necessary to ensure the continued operation of an entity running business in Poland:
- to maintain workplaces at the sanctioned entity or maintain business operations to the extent relative to public utility services or other public services, or
- if necessary to protect important national interests or for national security reasons.
Appointment of the temporary administrator is expected to be by decision of the minister in charge of economic affairs (currently, the Minister of Development and Technology). According to the draft law, the temporary administrator will be responsible for:
- the continuation of the sanctioned entity’s business,
- the management of the business, including the right to take any decisions otherwise vested in the sanctioned entity’s authorities and bodies,
- the exercising of rights vested into the sanctioned entity, including voting rights from shares held by such entity, and
- 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 the 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. Disposal will be allowed absent 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 the temporary administrator is appointed to acquire the sanctioned entity’s business, the administrator’s appointment will continue until the State Treasury acquires the assets.
Takeover of sanctioned entity’s assets by the State Treasury
The draft law will allow the State Treasury to acquire the assets of the sanctioned entity by offering market level remuneration which will be based on a valuation prepared by an independent entity of established market repute.
No recourse against State Treasury and temporary administrator
The sanctioned entities will not have recourse rights against the State Treasury or temporary administrator in relation to their activities.
Employee support measures
The sanctioned entities will be allowed to apply so that their employees can receive support from the Guaranteed Employee Benefits Fund to the extent that their salaries cannot be paid due to the sanctioned entity being insolvent or having insufficient funds. Employees will be allowed to apply for the same coverage should the relevant sanctioned entity fails to do so. Such payments will be subject to limitations and the support will not last more than three months.
