Implementation of the Digital Content and Services Directive and the Sales of Goods Directive in Poland

Poland faces the implementation of two EU pro-consumer directives essential for the e-commerce sector:

Directive (EU) 2019/770 of the European Parliament and of the Council of May 20, 2019, on certain aspects concerning contracts for the supply of digital content and digital services (the Digital Content and Services Directive or the DCSD);

Directive (EU) 2019/771 of the European Parliament and of the Council of May 20, 2019, on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC and repealing Directive 1999/44/EC (the Sales of Goods Directive or the SGD).

On June 29, 2022, the government draft act amending the act on consumer rights and certain other acts was submitted to the Polish Parliament (the Draft Act).

Subject to certain exceptions set forth in directives, member states shall not adopt or maintain regulations that differ from those adopted in the directives (the maximum harmonization).

The Draft Act revises the act on consumer rights general provisions by adding missing definitions, clarifying the scope of regulation or delineating between the scope of application of SGD and DCSD.

The two directives are intended to complement each other. The Draft Act also proposes a similar division by splitting new provisions regarding the supply of digital content or digital services and the sale of goods (including those with digital elements).

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EU adopts 6th package of sanctions against Russia

European Parliament

On 3 June 2022, the EU announced it has adopted a sixth package of restrictive measures against Russian Federation as it continues its aggression against Ukraine. The latest package also imposes further sanctions on Belarus considering its involvement in this aggression.

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Cross-border reorganizations in the EU: how will the new rules affect the process?

Brazil in Business

Cross-border mergers have become an integral part of corporate restructurings within the EU internal market. Groups have been taking advantage of the harmonized rules to move or consolidate operations, ownership of assets and liabilities across the member states – for instance, many corporations used cross-border mergers to reorganise their structures as a result of Brexit.  However, the level of harmonization of cross-border reorganizations was limited, covering only mergers of limited liability companies, while other forms were absent. New legislation, discussed in more detail in this article, expands the rules for cross-border reorganizations by introducing comprehensive procedures also for cross-border conversions and divisions and revising rules on cross-border mergers of LLCs. It aims at making the process simpler, faster and cheaper, while, at the same time, ensuring increased protection of shareholders, employees and creditors and allowing national authorities to block cross-border reorganizations set up for fraudulent or abusive purposes, such as circumvention of social security payments or tax obligations. Continue Reading

Upcoming Legal Changes for Electronic Communications Entrepreneurs in Poland

While the electronic communications services industry is still awaiting legislative developments regarding the Electronic Communications Law, which was to be the main act implementing Directive (EU) 2018/1972 of the European Parliament and of the Council of December 11, 2018, establishing the European Electronic Communications Code (EECC) in Poland, amendments are underway on the National Cyber Security System Act, which also contains regulations introducing important obligations on electronic communications entrepreneurs.

Although this article mainly focuses on amendments to the National Cyber Security System Act, we also present the current legislative status of the Electronic Communications Law.

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Rooftop Solar Electricity Generation on Commercial Buildings – An Overview of Regulatory Issues

Electricity prices are going through the roof and the continuing conflict in Ukraine does not bode well for imminent price decreases. Commercial property owners, aligning with the changing regulatory environment and listening to their tenants’ needs, are quicker to consider installing solar panels atop their commercial buildings. Certain regulatory issues should be considered before deciding to generate solar energy on real properties. The regulatory environment depends on many factors concerning such activity, in particular on the solar panels capacity, on the generated energy’s designation – whether for own or third-party (tenants’) needs – and, finally, on whether such activity would entail earning a profit on the delivered energy.

In principle, any business activity aiming at electricity generation must be licensed. However, no licence is required if solar energy is generated in either:

  1. A small RES installation with the aggregate installed capacity between 50kW and 500kW, connected to the power grid of up to 110kV in which the aggregate installed electric power is between 50kW and 500kW.
  2. A micro RES installation with the maximum aggregate installed capacity of 50kW, connected to the power grid of up to 110kV in which the aggregate installed electric power does not exceed 50kW.

Even though no licence is required, business operations that generate RES energy in small installations are still regulated and they must be entered in the Register of Energy Generators kept by the president of the Energy Regulatory Office (URE).

If an energy generator intends to use the energy solely for its own purposes, then it may not be considered a business venture requiring a licence.

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Trial by Fire for Polish Export Credit Insurance

Poland Flag

In the wake of Russia recently setting new rules for foreign creditors’ debt repayment, dividing foreign creditors in terms of whether or not they are based in a country that’s sanctioned Russia (the “Decree”), creditors having exposure to Russian entities have started reviewing their repayment options. Some of them may feel fortunate holding export credit insurance covering their political and/or commercial risk of funding Russia. For those creditors, the time has come to test the value of their export credit insurance.

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New Polish Holding Law v. Holding Financing

On 9 February 2022, the lower house of the Polish parliament amended the Commercial Companies Code, introducing a parent company’s liability for any damage caused to a holding subsidiary. The amendment has also introduced a binding instruction as to the parent’s handling of the subsidiary’s affairs if the holding’s interest so dictates. The parent must follow certain formalities when issuing the binding instruction, as will the subsidiary when accepting it, and cooperation between both companies’ officers will be required.

Parent’s Binding Instruction

According to the amendment, the parent may issue a binding instruction to its holding subsidiary – justified by the holding’s interest. The binding instruction should indicate:

  • The behaviour that the parent expects of the subsidiary in compliance with the instruction
  • The holding’s interest justifying the subsidiary’s compliance with the instruction
  • The potential benefits or detriments for the subsidiary as a consequence of compliance with the instruction
  • The anticipated manner and date of rectifying the damage suffered by the subsidiary following compliance with the instruction

The holding subsidiary, other than a single-shareholder company, may refuse to comply with the binding instruction if the instruction contradicts the subsidiary’s interest and may cause damage that will not be rectified by the parent, or by any other holding subsidiary, within two years as of the date of the event causing such damage.

Other holding subsidiaries may refuse to comply with the binding instruction if doing so would lead to or threaten insolvency. The holding subsidiary’s articles of association may also include additional prerequisites for refusing to comply with the binding instruction. If the subsidiary’s shareholders wish to introduce additional compliance refusal prerequisites, the effectiveness of the resolution amending the subsidiary’s articles of association would be contingent upon the parent purchasing the shares held by the subsidiary’s dissenting shareholders.

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Polish FDI Rules – One Year After

Gavel and Figure of Justice

In July 2020, Polish Parliament passed an amendment to the Act on Control of Certain Investments of 24 July 2015, which entered into force on 24 July 2020 (the Amendment). That Amendment has extended the scope of government’s control over the acquisition of stakes in Polish entities. Investors from outside of the EEA, EU, or OECDwould need to obtain clearance for the acquisition of a stake in Polish companies (or partnerships) carrying out business in sectors that the government has identified as being of strategic importance.

The concept behind the Amendment was not originally domestic – the Polish government responded to the EU call to protect the “European crown jewels” from buyouts by non-EU investors at lowered price while the lowered valuations were caused by the COVID-19 pandemic. EU law (regulation 2019/452), however, does not provide for a centralised system of control over the foreign investments, but rather the information exchange network between member states. Member states are allowed to implement the measures of screening the foreign direct investments in their territory on the grounds of security or public order. Many EU countries have provisions regarding some form of control over foreign investments, allowing the national governments to monitor and, in certain cases, object investments if these are considered undesired for various reasons.

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Amendments to the Act on Packaging and Packaging Waste Management

Man-holding-recycling-bin

The European Green Deal is one of the key items of European Union’s policy. Policies aimed at the reduction of the volume of waste, increase in sustainability and drive towards greater circularity are important components of the European Green Deal. An important aspect of it is dealing with the volume of packaging waste as well as other types of waste.

Our civilization produces more and more waste originating from packaging of products; such packaging is usually dumped after purchase, contributing greatly to the production of huge amount of waste that require treatment.

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What impact will the new Czech Construction Act have?

The new Construction Act has been adopted in its 3rd reading by the Chamber of Deputies of the Czech Parliament in the wording of a comprehensive amendment submitted by Mr. Kolovratník. The unified state building administration should therefore be put into effect next year and the new act as a whole will become effective from 1.7. 2023 (if also approved by the Senate and signed by the President). It is not clear at this moment if the Senate will return the Act back with amendments and in such a case there may not be enough time (and potentially votes) to pass it through Parliament before the elections which will take place this autumn. If this occurs there would not be any new Construction Act and the legislative process will have to start again from the beginning. The state building administration change is so revolutionary that it may cause disruption in the construction sector in the short term. On the other hand, the overall impact of the new law could potentially be positive for development projects in the Czech Republic.
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