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Office of Competition and Consumer Protection

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Credit payment holiday and anti-takeover provisions in the anti-crisis shield 4.0

< previous | next > 10.06.2020

Credit payment holiday and anti-takeover provisions in the anti-crisis shield 4.0
  • The Sejm has adopted provisions to protect borrowers and Polish companies.
  • A person who has lost their main source of income will be able to suspend the repayment of a loan for three months.
  • Polish companies crucial to public safety, health and order will be protected against hostile takeovers.

Easier access to credit payment holidays and protection for Polish companies against hostile takeovers is provided by the so-called anti-crisis shield 4.0 adopted last week by the Sejm. The new regulations will be deliberated on by the Senate next week. Their purpose is to protect Polish undertakings, jobs and consumers against the negative consequences of COVID-19.

“We’re giving consumers the right to suspend the repayment of a loan for a period of up to 3 months, without charging any interest and other fees,” says Jadwiga Emilewicz, Deputy Prime Minister and the Minister of Development.

“This will provide households, especially those affected by the economic consequencs of the pandemic, some relief in balancing their current expenses against lower incomes, without fear that this will immediately result in higher costs of servicing their debt in the future,” she added.

“We do not want to deter investors, but simply protect Polish companies against hostile takeovers due to a deteriorated economic situation resulting from the COVID-19 pandemic, due to which the valuation of companies may be particularly low. During a time of crisis, many businesses may experience temporary difficulties and, therefore, become “easy prey” for investors from outside Europe. We want to prevent that,” says Jadwiga Emilewicz, Deputy Prime Minister.

“The option to suspend the repayment of a mortgage or consumer loan for three months without being charged any fees by the bank will provide substantial relief for borrowers” - adds Tomasz Chróstny, president of the Office of Competition and Consumer Protection. - “For example, for an average mortgage loan of PLN 278 thousand, the benefit resulting from this measure may amount to approximately PLN 1.6 thousand, which is a substantial amount for a family that found itself in a difficult situation.”

“The economic consequences of the pandemic may give rise to the threat of hostile takeovers of Polish enterprises of strategic importance. Solutions included in the Shield 4.0 will prevent that situation. The president of the Office will be able to object to such transactions.

Acquisition despite this objection or without informing the Office will be invalid and may result in severe financial penalties. We will act efficiently and strive to ensure that the time to issue a decision is shorter than 30 days in order not to hold up foreign investments that are important for Poland,” says President of the Office of Competition and Consumer Protection.

Credit Payment Holidays

We’re giving consumers the right to suspend the repayment of a loan for a period of up to 3 months, without charging any interest and other fees. The new provisions will apply to those who lost their job or other main source of income after March 13th of this year. The suspension will occur automatically upon the submission of an appropriate application to the lender. The consumer decides whether they want to suspend the repayment for one, two or three months.

The mechanism stipulated in the Act provide for:

  • Suspension of the obligation to repay consumer loans, mortgage loans and credits within the meaning of Article 69 of the Act of 29 August 1997 – Banking Law; this applies both to the principal and interest. During that period, the lender will not be able to charge any other fees, except for premiums for insurance contract connected with the loan agreement.
  • Loan agreement performance may be suspended for a maximum period of 3 months. The term of the loan and all other terms provided for in the loan agreement will be extended accordingly by the suspension period.
  • When a borrower has several loans of the same type (e.g. two loans indexed to CHF) with the same lender, they will only be able to suspend the repayment of instalments for one of them.
  • Consumers eligible to suspend the performance of a loan agreement are consumers who lost their job or other main source of income after March 13th of this year.
  • The solution included in the Act will apply to loan agreements concluded prior to 13 March 2020, if the end of the term of the loan specified in those agreements falls at least 6 months after 12 March 2020.  

Anti-takeover provisions

We are introducing solutions inspired by provisions adopted recently in Germany. The changes also fit in with actions taken by other European (e.g. France, Italy) and non-European countries to protect their domestic companies in the public interest.

The Act also grants the President of the Office of Competition and Consumer Protection additional powers to protect Polish enterprises whose business is of importance to public order, public security or public health. Upon entry of those provisions into force, each investment falling under the provisions laid down in this Act which results in the acquisition, gaining of substantial participation or acquisition of dominance by entities domiciled outside a Member State of the European Union or individuals being nationals of countries other than EU Member States shall be placed under the supervision of the President of the Office.

The new regulations regarding the control of takeovers shall be in effect for a period of 2 years. Transactions involving the acquisition of a substantial number of shares (i.e. at least 20%) in such companies will be subject to review by the President of the Office. The protection applies to enterprises whose income in the territory of the Republic of Poland exceeded the equivalent of EUR 10 million in any of the two financial years preceding the date of intended takeover.

The new regulations apply to entities of key importance to ensuring public security, public order and public health, such as:

  • entities pursuing business activity related to: electriciy, gas, fuels, elecommunications, food processing, manufacture of medicines, chemicals and fertilizers, explosives, weapons and ammunition, and products and technology used by the Armed Forces adn the Police;
  • developing software used in essential services, such as:

energy, fuel, water supply, cash supply, card payments, hospitals, sale of subscription medications, transportation, and food supply;

  • state-owned companies.  

Additionally, the Act also provides grounds for the exchange of information on foreign investments between EU Member States and the European Commission via a contact point.

Key solutions of the Act on the Anti-Crisis Shield 4.0

  • temporary anti-takeover provisions to protect Polish businesses against hostile takeover by investors from outside the EU;
  • support for local government budgets;
  • solutions to streamline procurement procedures;
  • state budget subsidies for interest on bank loans for businesses;
  • credit payment holidays for those who lost their job or main source of income after March 13th;
  • support for jobs by adapting the labour market to challenges resulting from COVID-19;
  • tax reliefs, including the right to deduct donations to homes for single mothers, night shelters, homeless shelters and nursing homes, among others.

Attached files

 

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