Publication date: February 18, 2025
The classically understood merger and acquisition in Polish legal doctrine concern issues closely related to private economic law. In the classical understanding of these concepts, a merger is a combination of two or more companies as a result of which they create one entity. A takeover also occurs in the Polish legal system, but this institution differs from a merger. As a result of a takeover, no new legal entity is created, and the acquiring company gains control over the assets and activities of the acquired company. Both institutions are regulated by the Commercial Companies Code, where both of these institutions are regulated in Title IV of the aforementioned code. The M&A can also be understood more broadly, as the purchase of technology or organised part of the enterprise.
In the Polish legal system, the purchase of military technology is regulated primarily by two acts. The key regulations in this area are: the Act of 29 November 2000 on foreign trade in goods, technologies and services of strategic importance for state security and for maintaining international peace and security, which specifies the principles of control over trade in goods and technologies of strategic importance, including procedures for obtaining permits for the import of such goods, and the Act of 13 June 2019 on the performance of business activities in the field of production and trade in explosives, weapons, ammunition and products and technology for military or police purposes, which regulates the principles of obtaining concessions for conducting business activities related to the production and trade in technologies for military purposes. These acts, apart from a number of definitions and requirements that must be met to obtain a permit and concessions, also specify criminal penalties for failure to comply with the regulations.
What permits do you need to obtain to be able to acquire technologies with military applications?
First of all, in order to acquire technologies for military use, it is necessary to obtain a license for trading in military technology. On the basis of the act on conducting business activity in the field of production and trading in explosives, weapons, ammunition and products and technology for military or police purposes. This act directly states that trading in such technology requires a licensewhich is issued by the minister responsible for internal affairs (Polish: MSWiA), after prior consultation with bodies such as the Internal Security Agency or the Military Counterintelligence Service (Article 7 and 8 of the Act). The concession is granted for a fixed period of time, not shorter than 5 years and not longer than 50 years. The requirements for obtaining such a concession for an entrepreneur who is a natural person include, among others, Polish citizenship or citizenship of an EU Member State, Switzerland, or a Member State of the European Free Trade Agreement (EFTA). Such an entrepreneur must be at least 21 years old, have at least secondary or secondary vocational education, have professional preparation to conduct or manage business activities in the field of production and trade in items regulated by the Act, have full legal capacity, do not show mental disorders referred to in the Act of 19 August 1994 on the protection of mental health, and be a person with no criminal record and no criminal proceedings may be pending against him . In the case of a company, these requirements are the same in relation to persons who are members of the management body of the enterprise, and the partners of the company must also not have any criminal records and not be in the process of criminal proceedings pending against them (Article 10 of the Act). The application for a license must contain specific elements required by law, such as the company name, registered office, address and address of the place or places of conducting the licensed business activity, the number in the KRS register or information on the entry in the Central Register and Information on Business Activity, if the entrepreneur has such a number or entry, the Tax Identification Number, the type and scope of the business activity for which the license is to be granted, the requested period for which the license is to be granted, the planned date of commencement of business activity, data of members of the entrepreneur’s management body, proxies, attorneys authorized to manage the licensed business activity and partners who are natural persons, as well as shareholders and stockholders holding at least 20% of the entrepreneur’s shares and data of persons authorized to perform or manage the licensed business activity (Article 17 of the Act).
In addition to the concession specified in the Act on conducting business activity in the field of production and trade in explosives, weapons, ammunition and products and technology for military or police purposes, in order to import military technology, it is necessary to obtain a permit referred to in the Act of 29 November 2000 on foreign trade in goods, technologies and services of strategic importance for state security and for maintaining international peace and security. Such a permit is granted by the minister responsible for economic affairs (Art. 6a sec. 3), and the application for a permit must include the applicant’s name, registered office address or residential address in the territory of the Republic of Poland, Tax Identification Number, type and scope of the business activity conducted by the applicant, if the applicant is an entrepreneur, entities that are the applicant’s trading partners in the implementation of the applied-for turnover, including their names, registered office addresses or residential addresses, and their role in this turnover, identification of goods of strategic significance that are the subject of the turnover, including their value, quantity and control number, identification of the manufacturer of goods of strategic significance that will be the subject of the turnover and end users, including their names and addresses, information on the manner of use of goods of strategic significance by the end user, identification of the country of final destination and, in the case of intra-EU transport, the applicant is obliged to certify that the goods have reached the end user (Art. 9 of the Act).
Trade in dual-use technology also requires a licence. According to Regulation 428/2009 establishing a Community regime for the control of exports, transfer, brokering and transit of dual-use items (recast), dual-use technology is defined as items, including software and technology, that can be used for both civilian and military purposes and includes all goods that can be used in both non-explosive applications and in any way to support the production of nuclear weapons or other nuclear explosive devices . Although the regulation has expired, Polish legal acts still refer to it in matters of defining terms.
Obligations and sanctions in case of lack of authorization
Both acts also impose obligations on purchasers of such technology and specify sanctions in the event of lack of authorization. Import of military technology requires reporting to customs authorities, keeping a register of concluded transactions, implementing an internal control system for arms trade. Trade in military technology without obtaining a permit specified in the Act on Foreign Trade in Goods, Technologies and Services of Strategic Significance for State Security and for Maintaining International Peace and Security is subject to sanctions. A legal person or an organizational unit without legal personality with legal capacity, which trades without a valid permit, is subject to a fine of up to PLN 200,000, and a natural person who trades without a permit or, even unintentionally, contrary to the conditions specified in the permit, is subject to imprisonment from one to 10 years. The same amount of imprisonment is specified for conducting business activity in the field of manufacturing and trading in explosives, weapons, ammunition and products and technology for military or police purposes for trading in technology for military purposes without a license. In the event of a conviction, the items that were the subject of purchase or sale are subject to forfeiture. Such an agreement is invalid under Polish civil law as an agreement constituting a legal act contrary to the Act.