U.S. investors excluded from the FDI screening regulation
On June 19th the Polish Parliament passed the FDI screening regulation including an exclusion for investors from the Organization for Economic Cooperation and Development (OECD) countries from its regime.
The FDI screening regulation is an amendment to the Act of 24 July, 2015 on the control of central investments. The amendment introduces a new mechanism that would control foreign investments to Poland which affects non-EU entities that want to invest in a Polish entity covered by protection.
A new category of entities covered by protection is defined in the new law which includes companies that have activities connected with the following sectors: telecommunication, electricity generation, production of chemicals, production of pharmaceutical products, or IT. A non-EU entity which intends to acquire dominance over an entity covered by protection is obliged to constantly submit to the President of the Office of Competition and Consumer Protection with its intention to do so. A breach of the FDI screening regulation (i.e. acquisition or gaining a significant interest or dominant position without submitting the notification to the President of the Office of Competition and Consumer Protection) is subject to a fine of up to PLN 50,000,000 (an extremely high fine cap in the Polish law) or imprisonment from 6 months up to 5 years, or both penalties jointly.
The original draft only exempted investors from EU countries, Liechtenstein, Iceland and Norway from the restrictions.
AmCham Poland’s involvement supported the easing of the new law. During our May Monthly Meeting with the President of the Office of Competition and Consumer Protection, Mr. Tomasz Chróstny, who grants the authority to control and block investments in domestic companies from entities outside the EU announced that the FDI screening regime is not aimed at investors from the U.S.
According to the new law passed on June 19th, the FDI screening regime is not applied to investors based in the U.S. and other OECD countries.