Issue no.23, September 2009 Standing up to the law – the BPCC White Papers
by Daniel Bajer, business development manager, BPCC
The BPCC has prepared what will be the first in a series of White Papers which outline suggested changes in Polish law. The proposals, coming from BPCC members, are intended to benefit Polish society – as well as the companies that have suggested them. This list of proposals was created on the basis of the practical knowledge and the experience of our members. This set of proposals will officially be conveyed to the Senate Commission of National Economy and the Polish British Parliamentarian Group (PBPG) at a special meeting later this month.
The Senate Commission of National Economy focuses predominantly on Polish economic policy, the restructuring of the economy and the development of economic relations with foreign countries. The PBPG manages the exchange of experience and information, as well as developing contacts with representatives of the British Parliament. The PBPG has a long history of successful cooperation with the BPCC – the introduction of legislative changes in the matter of double taxation between the UK and Poland is a good example.
This paper was developed in order to put across the suggested changes from our members in a clear and rational way. Each point is broken down into the following sections:
Current Situation – description of the current law in force
Core of the Problem – short summary of adverse consequences of the law in force
Solutions in other countries of the European Union – instances of best practice from other EU jurisdictions
Suggestion for Poland – description of the solution suggested by the member firm
Predicted results of introducing the suggestions
Here are the first proposals of suggested changes to Polish law which have been developed by BPCC members, and will be included in the paper:
A4e: Labour Market Policy
Current Situation:
In April 2009, Poland’s State Employment Office recorded 750,000 people who had been unemployed for 12 months or more. These long-term unemployed account for over 40% of the total number of unemployed in Poland. The cost of training and finding lasting employment for a single long-term unemployed person ranges between 8,000-21,000PLN depending on their level of education.
Core of the Problem:
The long-term unemployed often require individual support in the area of social skills training in order to bring about a change of attitude towards looking for work. The approach of the labour offices, however, is simply to keep tabs of the numbers of long-term unemployed, measuring rather than managing the problem.
Solutions in other countries of the European Union:
During the last 10 years, over 1.85m British citizens have benefited from the “New Deal” aid scheme and have returned to the labour market in Great Britain. A4e (Action For Employment – a private-sector company) has played a crucial role in this success.
Suggestion for Poland:
An adaptation of the aid schemes practiced in Britain for the long-term unemployed. Each participant of the aid scheme would receive individual support from a personal advisor during the period of the scheme and would receive support and monitoring after taking up a job. To effectively combat long-term unemployment, private sector agencies, which have proven themselves to be more cost-effective than state labour offices, should be permitted to provide support and training alongside state labour offices.
Predicted results of introducing the suggestions: There will be financial stimuli for companies offering their services in exchange for playing an effective part in creating long-term employment. The creation of profitable employment brings opportunities for the development of both the employed and the local and national economies.
British American Tobacco: Smoking prohibition in public places
Current Situation:
Bars, clubs and restaurants are legally obliged to have designated smoking and non-smoking areas.
Core of the Problem:
The suggested regulations of creating separate smoking areas in bars, clubs and restaurants may effectively result in the introduction of the smoking ban in the majority of social and entertainment establishments.
Solutions in other countries of the European Union:
Austria – small bars and restaurants are not covered by the prohibition. The creation of a separate smoking area is permitted in larger establishments of this type, as long as there is no possibility of smoke getting into the smoke-free zone.
Spain – the decision of whether smoking is permitted or not is made by the owner in all social establishments both large and small.
Suggestion for Poland:
Bars, clubs and restaurants in Poland are often managed by their owners so legal regulations should be introduced which will allow the owners the freedom to decide whether or not smoking is to be permitted on their premises.
Chadbourne and Park LLP: Excise Duty Act
Current Situation:
In Poland excise duty is charged on the purchase of new cars.
Core of the Problem:
Excise duty on cars results in the increased cost of new cars and the importation of large numbers of used cars. This leads not only to a lack of income from VAT for the national budget but also creates dangerous situations on the roads due to un-roadworthy cars.
Solutions in other countries of the European Union:
Excise duty is not charged on cars in any other EU country. EU regulations do not prohibit the imposition of excise duty on new cars, but all other EU countries have deemed it detrimental and have abolished it.
Suggestion for Poland:
The abolishment of excise duty on cars.
Predicted results of introducing the suggestions:
There will be an insignificant decrease in budget income from excise duty but a significant increase of income from VAT resulting from the increased amount of new cars sold in Poland. There will be a decrease in car accidents currently resulting from the poor technical condition of used vehicles and environmental improvements as lower-emission new cars displace used vehicles.
Lovells: Public-Private Partnership Act
Current Situation:
At the end of a PPP contract, the private partner must hand over infrastructure which was built during the period of the contract, to the public entity.
Core of the Problem:
In the process of a PPP enterprise, property such as a shopping centre or office building may be built. The PPP act does not allow for the private partner to retain this property even though in some situations this may be the best solution.
Suggestion for Poland:
It is recommended that the PPP act should include regulations, which, where relevant, allow for the private partners to retain property after the conclusion of an enterprise.
Predicted results of introducing the suggestions:
Interest in PPP enterprises will increase among potential private partners. The situation will be more convenient for public entities who may not be interested in retaining property.
GlaxoSmithKline: Preventative Measures: vaccine financing system
Current Situation:
Preventative measures are among the most effective means of reducing illnesses but funds allocated to preventative measures are too low in the Polish healthcare system. New vaccines are often not generally available because of limited financing from the public budget.
Core of the Problem:
The stress is currently put on treatment while the role of preventative measures is underestimated. The national budget assigns PLN 10 billion for medicines but only PLN 70m for preventative vaccines.
Solutions in other countries of the European Union:
Emphasis is put on the role of preventative measures, including preventative vaccines.
Suggestion for Poland:
Introduction of preventative measures programme, including vaccines as effective and economic measures against illnesses. ‘Prevention is better than cure’
Predicted results of introducing the suggestions:
Patients would gain greater access to innovative medicines and vaccines. Decrease of incidence of diseases, lowering the costs of hospitalisation and, in the future, improvement of health in society. Less illness in society would also mean higher productivity in the economy (less days lost due to ill-health).
If you have any proposals for changes you would like to see that would aid your business performance, please send your ideas to
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Investing in Poland 2010
By E Blake Berry, editor-in-chief, Investing in Poland 2010
This month Valkea Media is launching a new annual English-language title, Investing in Poland 2010. The publication is being prepared by Warsaw Business Journal in collaboration with Polish Information and Foreign Investment Agency (PAIiIZ) and chambers of commerce including the BPCC.
Investing in Poland 2010 is aimed at companies either operating or planning their future investments on the Polish market, international institutions, local and state governments and companies planning to commence activity or reinforce their position in a given województwo in Poland. The publication will offer a broad perspective into the investment situation in Poland. It will analyse key macroeconomic data and provide vital information about the investment environment in cities and województwo, special economic zones and technology parks.
Here is an extract from the publication which I hope you will interesting and useful:
Zachodniopomorskie województwo
Poland's westernmost województwo, Zachodniopomorskie, occupies a privileged position in the country. By virtue of its proximity to Germany, Scandinavia and Baltic shipping lanes, the województwo serves as an economic gateway to the world, while at the same time its natural resources serve both industrial and recreational interests.
In total, Zachodniopomorskie comprises around 7.3% of Poland's total area and about 4.4% of its population. Local authorities stress the quality of the workforce – which is reinforced annually by around 18,000 new graduates of higher education – as well as the fact that labor costs are on a par with the national average. The number of capable German speakers in the województwo is also relatively high.
Zachodniopomorskie is the only region in Poland currently linked to western Europe by highway. Moreover, it is suffused with road and railway infrastructure, has an international airport and hosts the biggest ferry terminal in the country. Ports in Szczecin and Świnoujście offer access to sea trade.
Representatives of the województwo stress that a variety of investment options exist. These include the possibility of investing on land sited within one of three special economic zones – the Kostrzyn-Słubice, Pomeranian and Słupsk SEZs – and several large industrial and technology parks, such as the Szczecin Science and Technology Park.
In terms of sectors with potential for investment, Zachodniopomorskie's Investor's Assistance Centre notes tourism and yachting as well as health and beauty services as attractive options. Renewable energy is another area which is drawing interest, and wind energy in particular, as the blustery coastline has proven suitable for wind turbines.
Not all the news from the województwo is rosy, though. Unemployment is relatively high – although local authorities suggest that this is to employers' advantage – and not all local industries have coped well with the free market.
Shipbuilding is a case in point. As in neighboring Pomorskie, maritime construction is a traditionally strong industry in Zachodniopomorskie. The industry has been plagued by troubles since the end of communism, but prospective private investment in New Szczecin Shipyard, a large local employer, has offered new hope.
Szczecin
Szczecin, the administrative seat of Zachodniopomorskie województwo, is Poland's seventh-largest city by population and third-largest in terms of area. It lies around 20 km from the German border and has access to the Baltic Sea, giving the city strong trade and transport links with western Europe.
In Rzeczpospolita's Local Government Ranking 2009, Szczecin's authorities were ranked eighth out of 50 large Polish cities, with the governments of fellow Zachodniopomorskie cities, Świnoujście and Koszalin taking 16th and 27th places, respectively.
In terms of its economy, Szczecin remains largely dependent on the sea, but has managed to diversify its base to a degree, attracting IT investments such as a UniCredit BPO center. Meanwhile, the city itself plans to spend several billion złoty on investment over the next few years, earmarked for projects to improve municipal transport and waste management systems, to better environmental protection programmes and to support sport and culture.
Indeed, Szczecin is well-known in Poland for these latter two areas. The capital of Zachodniopomorskie is synonymous with sailing, for example, hosting a number of races and maritime-themed events throughout the year. The annual Days of the Sea festival is one such example. Other major events on the city's calendar include the International Street Artists' Festival, the Szczecin Rock Festival and the Pekao Open tennis tournament.
If you are interested in purchasing Investing in Poland 2010, it will be available via the BPCC’s online shop shortly. We are pleased to offer a 20% discount for BPCC members.
Intellectual Property Disputes
By Christian Fielding, director of Company Secretarial Department and Ireneusz Matusiak, director of Commercial IP Department, TGC Corporate Lawyers
Intellectual property rights are often core assets, and may even define the competitive advantage of a company in its market. However, many companies do not do enough to ensure that their intellectual property is protected and can therefore find themselves in a variety of different types of dispute. We briefly look at the main ones below.
1. Administrative Procedures
The administrative procedure can generally be used when property rights have been registered with the Polish Patent Office (PPO). Such property rights include trademarks, patents, utility models, industrial designs, topography of integrated circuits, and geographical indications. During the registration process a party can appeal against decisions of the PPO or, after the registration process, oppose an action taken by another party trying to amend, oppose, or cancel, the registration of IP rights.
Complaints against a PPO decision are filed with the administrative court via the PPO so that the PPO has a chance to reconsider its decision. A party can appeal against a PPO decision on the basis of the PPO being in breach of any regulation, law, or procedure. Either party may appeal against an administrative court judgment to the Supreme Administrative Court.
2. Civil Procedure
If registered rights relating to industrial property or any other intellectual property assets are infringed, the owner may bring a civil action against another party in court provided they can show legal ownership, infringement, and that the defendant is responsible for the breach. Any court action must be preceded by a letter setting out the infringement and requesting rectification of the situation. An action can be brought before a court only if the issue is not resolved at this stage. Either party may appeal against a court judgment to the court of second instance, and under certain conditions to the Supreme Court.
In general, a civil court proceeding is still the most common legal action against IP infringements. However, it is increasingly common for parties to use arbitration courts in order to save time and money.
3. Alternative Dispute Resolution (ADR): Arbitration, Mediation, and Conciliation
(a) Arbitration and Mediation
Arbitration and mediation allow parties to settle disputes amicably without resorting to the court system.
If the parties intend to use arbitration as a means of solving a dispute, they should enter into an arbitration covenant in the form of a separate agreement or, as an arbitration clause in a legally binding contract that forms the basis of the matter in dispute. If the parties have signed an arbitration covenant, then even if one of the parties files a claim at court, the claim will be dismissed when the second party shows the existence of a previously agreed arbitration covenant.
The mediation process usually begins when one party files a request for mediation and the other party accepts it, however different ADR proceedings are governed by different rules.
There are a number of different types of arbitration court, some are permanent, others are ad hoc, and some are professional mediation centres.
The arbitration proceeding is normally conducted by specialists in a particular field. Usually after the hearing, the arbitration court issues a judgement which must have a court enforcement clause to be effective.
(b) Main advantages of ADR:
(a) Faster and less formal procedure (b) Different languages can be used, as agreed (c) Benefit from specialist knowledge of arbitrators, especially in technologically complex areas (d) The proceeding before the arbitration courts are confidential and are not open to the public (e) Lower costs
(c) Main disadvantages of ADR:
(a) Arbitration is only as professional as its arbitrators (b) Costs need to be fully understood (c) Although ADR procedure is faster then civil procedure, it can still be time consuming
(d) Mediation and Conciliation based on Polish civil procedure
Prior to commencing a civil action, and also during the proceeding, parties may decide to mediate. The procedure starts when the parties sign a mediation agreement, or if the court issues a decision sending parties to mediation. If the parties reach a settlement, such settlement shall be confirmed by the court.
Another way of amicably solving a dispute prior to commencing a civil action is the conciliation proceeding. This procedure can be used irrespective of the value of the case. If the parties sign a settlement on the basis of a conciliation proceeding, such settlement is included in the relevant case file by the court, and the case is closed to further proceedings.
4. Our Approach
We understand that clients may need to maintain a co-operative relationship with the other party and we understand the need to resolve disputes quickly.
Our pre-action protocol may include the following:
advice at an early stage to help to identify and remove the cause of the dispute
informal negotiation to resolve the dispute quickly
risk management and reducing risk profile
mediation
arbitration
litigation
In situations where the dispute does have to be dealt with by court proceedings we assist ourclients to run those proceedings as effectively as possible with a view to reaching a successful outcome.
BPCC CEO Newsletter - online publication of the British Polish Chamber of Commerce
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