Many countries inside the European Union are still struggling to come up with clear regulations that would provide a predictable set of rules for the blockchain technology. However, smaller nations like Liechtenstein and Malta have sorted it out. Continue Reading
The long-awaited amendment to the Renewable Energy Sources Act (RES) is now in effect.
Before the holiday season, on June 29, 2018, the President signed into law the long-awaited amendment to the RES. It was published later that day (fast track), thus the provisions regarding RES installation were effective as of July 1, 2018, with the remainder taking effect, generally, on July 14, 2018.
The first trigger for introducing the amendments was the need to execute the European Commission Decision conditionally allowing the Polish auction-based model of supporting RES. While at it, certain previously flawed provisions were fixed and several new solutions were added.
Depending on the point of view, the outlooks vary. Generally, it seems that the amendment is beneficial to renewable energy producers, yet there is still a lot to be desired in the long run.
The Polish government has announced details of the high-speed rail network to be built in connection with its Central Communications Port (CCP) project. The PLN 40 billion (€9.25 billion) planned rail network is even more ambitious than the PLN 35 billion (€8.10 billion) airport project.
With a target date of 2027, the CCP involves:
- Construction of new hub airport 40 km from Warsaw
- Reconfiguration and extension of Poland’s rail network with CCP as its hub
- Extension of the nearby A2 motorway along with numerous ring roads
- Transfer of major operations from Warsaw’s existing Chopin airport to CCP
- Development of a new city neighboring CCP
On July 1, 2018 the so-called split payment mechanism was introduced into the Polish legal system. Split payment refers to the splitting of invoice payments in B2B relations between a supplier’s current bank account and a VAT account, which is automatically opened by banks as an account directly linked to current accounts. Funds constituting the VAT portion of an invoice payment are transferred to and from such VAT accounts. The split payment mechanism in Poland is not obligatory. Purchasers of goods or services can decide whether they want to split their payments in two parts, with the net amount transferred to the supplier’s current account and the VAT amount credited to the VAT account. The use of the funds on VAT accounts is restricted by law.
The introduction of split payment into Polish law has significant practical implications for financing, especially factoring and all secured transactions where an assignment of rights is used. Continue Reading
President Duda has signed the new law on the Central Communications Port (CCP) (see our summary of the new law here and it will take effect on 20 June 2018. However, questions remain on the scope of Poland’s mega-investment project.
Prime Minister’s Volte
A key element of the plan for CCP is that the existing Warsaw Chopin Airport (which is currently used by approximately 16 million passengers annually, with potential growth to capacity of 22-24 million) would close and all commercial traffic would move to CCP, thus creating an efficient hub for LOT Airlines. However, recently, Prime Minister Mateusz Morawiecki and the governing Law and Justice Party candidate for Warsaw Mayor Patryk Jaki both stated in interviews that Chopin Airport would not close, but its usage would decrease and serve mostly Warsaw citizens and domestic traffic. Although these statements may have been influenced by local government elections, which will be held in the fall of 2018, if they do represent the government’s position, they throw into question a key point of CCP’s economic viability and have unsettled the market. Continue Reading
If there is a holy book for finance lawyers, at least on this side of the Atlantic Ocean, it would be the Loan Market Association (LMA) standard form.
Aimed to improve liquidity and efficiency in the syndicated loan markets in EMEA, the recommended standard forms developed by the LMA are here to stay. Although intended as a non-binding recommended form to be used as a starting point for negotiation only, boilerplates and other provisions proposed by the LMA have become widely accepted market standards.
English law governs the LMA standard documentation. In fact, it is not a single form but a selection of different forms for various types of transactions, including investment grade, real estate or leveraged transactions. While Germany, France and Spain enjoy their own LMA-based primary documents governed by their respective local laws, CEE jurisdictions are still in the basket of the developing markets for which the LMA produced its developing markets standard documentation. Standard forms for developing markets are governed by English law, based on the assumption that international lenders are likely to opt for legal documentation governed by a globally recognized legal framework instead of the law of the borrower’s jurisdiction.
So, what is the practice of using LMA standard forms like in Poland, the Czech Republic, Slovakia and Hungary? Continue Reading
The Polish government is rapidly moving forward with plans for Poland’s new mega-airport. Proposed implementing legislation has been prepared and circulated for initial comments, an extensive concept document has been prepared, the office of the project’s plenipotentiary at the Ministry of Infrastructure has taken shape, an advisory council for the project has been appointed, and a tender is being prepared for selection of a consortium to design the project, with such selection to be concluded by the end of 2018.
This major infrastructure project – now officially called Solidarity Airport – Central Transport Hub (abbreviated as CTH) (in Polish: Port Solidarność – Centralny Port Komunikacyjny (abbreviated as CPK)) – involves:
- Construction of a new hub airport 40 km from Warsaw
- Reconfiguration and extension of Poland’s rail network with CTH as its hub
- Extension of the nearby A2 motorway along with numerous ring roads
- Closure of Warsaw’s existing Chopin airport and transfer of its airport functions to CTH
- Development of a new city neighboring CTH
The target date for initial operation is 2027.
On 8 March 2018, the European Commission (EC) published its long-awaited new FinTech Action Plan. The EC understands FinTech to be technology-enabled innovation in financial services, and the strategy covers developments related to new technologies which are changing the financial industry and the way consumers and firms access services. At the same time, the action plan also covers related challenges, such as cyber threats, and proposes the assessment of innovative technologies, such as blockchain, cryptocurrencies and cloud computing services.
EU Commission Vice-President Valdis Dombrovskis recently compared the increasing digitalization of financial services to a global ‘space race’ – in which Europe should not lose out. Various national supervisory authorities in Europe are concerned about the ‘gamification’ of, and advertisement methods for, certain financial services and warn of the risks associated with Initial Coin Offerings (ICOs). An important policy debate for FinTech is thus in full swing at EU level.
One of the greatest conceptual changes and innovations of the currently effective new Civil Code (Act V of 2013 on the Civil Code) was the permissive regulation of the corporate rules, which is more flexible than the former binding approach.
Members and founders of a legal entity can now – in the deed of association – prescribe alternative rules regarding their relations with each other and the company or regarding the organization of the company. This flexibility allows a legal entity to implement custom-made rules that best serve its day-to-day operations.
However, there are limits to this freedom. Members and founders of a legal entity cannot derogate from the new Civil Code’s provisions if law prohibits it; it violates the interests of its creditors, employees and minority members; or it prevents the effective supervision of the legal entity. When the new Civil Code was enforced, it was widely agreed that the judicature would have a highly important role related to interpretation and clarification of the flexibility of the permissive regulation.
One of the many questions asked by our clients is: “Does Polish law recognise the concept of ‘piercing the corporate veil?’” Is it possible to disregard the separate legal personality of a company or corporation and make shareholders liable for the debts of the company? This question has been asked since the introduction of the market economy in Poland (in 1989) and there is still no clear answer. Continue Reading