Poland

Real change requires more than just good intentions. It takes courage to tackle difficult issues, determination to overcome obstacles, and a vision that enables you to realise a better future when others can only see problems. As lawyers who deal with facts, evidence and the pursuit of justice on a daily basis, we recognise the power of small actions that change the world for the better, day after day and year after year. This is our seventh year with the KALYNA Polish-Ukrainian-Canadian Scholarship Foundation. Another year where, with so little, we have done so much good. Our mission in action. Why do we support the KALYNA Foundation? Truth, responsibility and investing in human potential form the foundation of our professional lives and all our social engagement activities. We see these same ideals reflected in the work of the KALYNA Foundation. This is not philanthropy for the sake of image. It is a conscious partnership in a mission that is close to our hearts. By supporting the Foundation, we not only provide financial assistance – we become part of real change that is taking place in two areas that are very important to us. The first is fostering difficult dialogue about the complex history of Polish-Ukrainian relations, and the second is investing in the future by supporting the education of young, talented Ukrainians whose lives have been affected by war. We believe that building bridges of understanding and opening doors to the world for young people is the best and most lasting investment in a peaceful and secure tomorrow. That is why, every year, we host the Foundation Council and listen to its deliberations, becoming an active participant and an objective witness to the changes it is making. A meeting at the heart of things: successes, challenges and a new path This year’s Foundation Council meeting, attended by Grażyna Staniszewska, Prof. Andrzej Friszke, Prof. Tomasz Stryjek, Ewa Pocztar, Adam Stec, Barbara Imiołczyk, and Diana Tavera of Kochański & Partners, demonstrated the dynamic and challenging nature of working for change. The problem: How can we ensure a future for young people in the shadow of war? The solution: Scholarships that change lives Wiktoria, a marketing and social media student, and Olena and Vitalij, students at AGH University of Science and Technology in Krakow. These scholarships are more than just financial aid; they’re a clear sign that the world hasn’t forgotten them and is backing their potential. The problem: How can we talk about our painful history in a way that heals wounds rather than opens new ones? The solution: A courageous book that seeks the truth KALINA is unafraid of difficult topics, which is why it co-financed the publication of Dr Mariusz Sawa’s book „Pociski jak paciorki różańca”. The author attended the meeting remotely to speak about the book’s fantastic reception, which caused a huge stir in influential media outlets such as Gazeta Wyborcza, Przegląd Prawosławny and Polityka. The book touches upon one of the most painful episodes in Polish-Ukrainian relations: the events in Sahryn in March 1944. This is not a book that offers simple answers. As the author emphasises in one passage, his work reminds us that “people killed people; Christians killed Christians (…)”. Dr Sawa encourages reflection and prioritises historical truth over national narratives. The rapid selling out of the first print run and the subsequent demand  for a reprint are clear evidence of the urgent need for such discussions today. Dr Sawa’s numerous invitations to book signings, including within Ukrainian circles, demonstrate that dialogue is possible. The problem: How can you operate effectively when the rules of the game change? The solution: Adapt and seek new paths It is the Foundation’s determination and ability to overcome obstacles that make it so effective. It’s great to be part of this initiative — a story that proves business involvement can and should be more than just a duty; it should be a passion and a genuine means of building a better, fairer and more conscious world.

EMIR 3 in terms of the core EMIR regulation – the most important bullet points based on the experience of KIEŁTYKA GŁADKOWSKI KG LEGAL in advising global clients in the Polish jurisdiction in the field of derivative instruments traded over the counter. 1. The essence of the EMIR regulation EMIR (European Market Infrastructure Regulation (EU) 2017/1899 is a regulation of the Council of the European Union and of the European Parliament on over-the-counter (OTC) derivatives, central counterparties and trade repositories. The regulation aims to increase the safety and stability of financial markets in Europe and prevent financial crises. 2. The original version of the Regulation of 2012. The context for the references in EMIR is the 2008 economic crisis, whose consequences proved severe for many European Union Member States. The regulation's point of reference is Article 114 TFEU, which governs the convergence of internal markets. However, Article 114 does not apply to tax regulations, the free movement of persons, or the rights and interests of employees. It recommended strengthening oversight of the EU market, including through the creation of a European system of financial market supervisors responsible for the banking sector, the insurance and occupational pensions sector, and the securities and markets sector. The regulation requires all derivatives, both exchange-traded and over-the-counter, to be transferred to a trade repository. One of the objectives of the 2012 regulation is to mitigate systemic risk, including through increased regulation of clearing and trading. The legal provisions regarding limited risk apply bilaterally and also cover non-EU countries. 3. EMIR Refit of 2019 amending the original regulation The 2019 regulation partially amended the 2012 EMIR regulations with respect to the clearing obligation, its suspension, reporting requirements, risk mitigation techniques related to OTC derivative contracts not cleared by a central counterparty, the registration and supervision of trade repositories, and requirements for trade repositories. Amendments to the 2012 regulation also address definitional issues, including a broad definition of a financial counterparty, which can include, for example, a credit institution, an investment firm, or a central securities depository. The main differences between the original EMIR and the 2019 regulation include changes in access to reported data, aimed at facilitating supervision and risk analysis by supervisory authorities. The regulation changed the scope of reporting obligations, standardizing data formats and expanding the scope of reporting entities. The new regulation also aimed to provide a more proportionate approach to regulation, particularly in the context of small and medium-sized enterprises. Moreover, over the past 7 years, market conditions have changed, and new regulations have been adapted to these changes. 4. EMIR 3 regulation EMIR 3 introduces changes to the original regulation. The changes stem from a renewed need to increase the security of EU central counterparties (CCPs) to mitigate excessive reliance on systemically important CCPs from third countries. One of the most important changes is the requirement to maintain an active account with an authorized central counterparty within the European Union and to clear a representative number of interest rate derivatives transactions through this account in Polish złoty and euro. In addition to these regulations, EMIR 3 expands the scope of obligations regarding stress testing and reporting to the Polish Financial Supervision Authority. The primary goal of the amendment to the original EMIR is to increase the security and stability of the derivatives market by reinforcing oversight of these instruments. 4.1 Active Account Requirements Account activity requires that at least one EU-authorized account be active and that at least a representative number of transactions on the active account be settled. The Regulation specifies the necessary operational conditions for an active account to be functional, as documented in legal documentation, and to have IT connectivity. The counterparty must also have systems and resources that prevent it from operationally using the active account. All new transactions of the counterparty in derivative contracts falling within the automatic reconciliation category (AAR) can be settled in the account at any time. These operational conditions must, at a minimum, be stress-tested. Counterparties subject to AAR are required to report by calculating their activities and risk exposures in terms of the AAR. They must provide the competent authorities with the information necessary to assess compliance with the AAR every six months, including, where necessary, the representativeness obligation. Where appropriate, information contained in the report submitted pursuant to Article 10 of the Regulation must be used. 9 of EMIR, and also demonstrate in the report that the legal documentation, IT connectivity, and internal processes related to active accounts comply with the requirements. The regulations stipulate that counterparties subject to AAR that have already cleared at least 85% of their derivative contracts will be exempt from the operational conditions and aspects of the AAR reporting requirement. 4.2 The subjective scope of the active account requirement The requirement to have an active account applies to both financial and non-financial counterparties subject to the clearing obligation under EMIR and exceeding the thresholds in any AAR category. To determine whether an entity is subject to the AAR, it must first be subject to the clearing obligation under EMIR. Furthermore, the trading must involve OTC interest rate derivatives denominated in euro or Polish zloty, or involve short-term interest rate derivatives denominated in euro, and must exceed the clearing threshold of three billion euros individually or collectively for all types of transactions covered by the scope. Within six months of the regulation's entry into force, technical standards for active account requirements will be defined. The obligations stipulated in the regulation will apply to counterparties subject to the central clearing obligation that are clearing members from a third country and that exceed the clearing threshold in any instrument subject to the clearing obligation through an active account. 4.3 Transaction settlement rules Transaction clearing covers activities of derivatives counterparties within the meaning of EMIR, who are required to report the transaction to a repository (i.e., entities registered under EMIR, up to and including the transaction date for financial and non-financial counterparties, and up to the end of the second business day following the transaction's conclusion for non-financial counterparties whose trading activity in financial instruments does not exceed the regulatory thresholds). If transactions are concluded outside of a regulated market, they must be cleared at a CCP (central counterparty). Transactions cleared exclusively OTC must employ appropriate procedures to mitigate credit risk. Confirmation of the transaction must occur within the timeframe specified in EMIR. The 2024 Regulation amends the 2012 Regulation. referring to the third article regulating intragroup transactions, defining intragroup transactions as OTC derivative contracts entered into with another counterparty that is a member of the same group, if both counterparties are fully included in the same consolidation and are subject to appropriate centralised risk assessment, measurement and control procedures, and that counterparty is established in the European Union or another third country that is not a high-risk country. 4.4 Margin Requirements Counterparties should report all relevant types of collateral, providing values before and after reduction. The counterparty submits a report, determining the fixed value to be entered as the portfolio value. At the individual transaction level, initial margin and variation margin are posted for an uncleared derivative in accordance with the margin agreement. Compared to the original EMIR regulations, EMIR 3 increases the importance of transparency provisions for CCPs for participants providing clearing services and those providing such services to their clients. Central counterparties are required to disclose the performance of their margin to entities with whom they transact. This information should include margin model parameters such as the confidence level, the lookback period, the liquidation horizon, and the risk that encompasses the model's elements. Central counterparties also provide clearing members with a list of key assumptions and constraints of the margin model, including a description of the events that will trigger a breach of the assumptions. 4.5 Requirements for the recognition of third-country systems A new feature of EMIR regulations, introduced in its third regulation, is the exemption from the obligation to clear transactions with third-country pension systems. The systems must be recognized under the law of their country, authorized and supervised, provide pension services, and not pose a threat to the financial stability of the European Union. Referring to the previous provisions of EMIR 3, the obligation for transactions with third-country pension systems is for these participants to hold an active account. The exemption from transactions with third-country pension systems is intended to facilitate cross-border transactions.

The Polish Deposit and Return System launches on 1 October. This is a real revolution for businesses, whether they are producers, importers, distributors or traders. Indeed, its implementation brings with it a number of challenges, including, perhaps less obviously, concerning VAT. Here is a brief guide to the most important issues relating to the Polish Deposit and Return System. Legal basis and objectives of the Deposit and Return System The Polish Deposit and Return System is primarily based on the Act on the Management of Packaging and Packaging Waste of 13 June 2013, the Waste Act and numerous implementing ordinances, which regulate, among other things, the deposit amounts, the levels of separate collection, the obligations of operators, entities placing packaging on the market and traders, and the rates and rules for the payment of product fees or the design of labels. The main objectives of the system are to: Reduce the amount of packaging waste entering the environment Promote recycling and a circular economy Encourage consumers to return packaging and packaging waste through a deposit mechanism Achieve the packaging collection rates required by the EU (77% between 2025 and 2028 and 90% from 2029) What packaging is covered by the deposit and return system? Single-use plastic (PET) beverage bottles up to 3 litres Aluminium and steel beverage cans up to 1 litre Reusable glass beverage bottles up to 1.5 litres All these types of packaging will have to be labelled accordingly. System participants and their key roles The deposit and return system involves a number of actors, each with specific roles and responsibilities. Deposit mechanism: how does it work in practice The deposit is a specific amount charged when a product is sold in packaging covered by the system. The amount is set by the implementing ordinance. The deposit per unit of packaging for: Single-use plastic beverage bottles with a capacity of up to three litres, including their plastic caps and lids, excluding glass or metal beverage bottles with plastic caps and lids, shall be PLN 0.50 Metal cans with a capacity of up to one litre shall be PLN 0.50 Reusable glass bottles with a capacity of up to one and a half litres shall be PLN 1.00 The deposit “follows the product”: It is collected at each stage of distribution – from the company placing the product on the market to the wholesaler, the retailer and the consumer Return of the deposit: The consumer is refunded the full amount of the deposit when the empty, undamaged packaging (or packaging waste) is returned to a designated collection point (usually a shop) Deposit and product price: Importantly, the amount of the deposit is not included in the VAT base of the product price Placing on the market vs. sale These are two different concepts, which also have different implications with regard to the deposit and return system: Placing on the market: This is the first making available of a packaging or a packaged product on the territory of a country (domestic production, import, ICA) for use or distribution Sale: This is the seller’s obligation to transfer ownership of the goods (packaged product) to the buyer and to deliver the goods, and the buyer’s obligation to collect the goods and pay the price to the seller. The mere physical placing of packaging on the domestic market does not in itself give rise to an obligation to collect a deposit. This obligation arises when a product is sold in packaging covered by the deposit and return system. Tax aspects of the Polish Deposit and Return System – challenges and solutions Businesses have many questions and concerns about tax issues, especially VAT. Deposit and VAT – key principles Deposit charged on the sale of a product: as mentioned above, the deposit does not increase the VAT base of the product itself, being treated as an amount not subject to VAT at the time it is collected VAT on unreturned deposits: This is a more complex situation. The deposit on packaging that has not been returned by consumers, i.e. the deposit that has not been refunded to them, is subject to VAT: The company that places the packaged products on the market is the VAT  payer The operator of the deposit and return system is the VAT remitter VAT settlement and tax records: The operator (remitter) calculates the difference between the value of the deposits on packaging placed on the market and the deposits on packaging returned during the calendar year. On the basis of this difference, the operator remits the VAT due to the tax office. The deadline for payment is 31 January of the year following the settlement year The entity placing packaged products on the market (taxable person) increases the tax base in its VAT return (JPK_V7) for the first tax period of the year following the year to which the deposit settlement relates by the amount of the difference between the deposit on the packaging placed on the market and the deposit on the packaging returned during the calendar year in question Both entities are required to record the data necessary to establish the tax base and to keep it for a period of 5 years from the end of the year for which the tax base is established, resulting from the difference between the value of the deposit collected for packaging covered by the deposit and return system and placed on the market in that year and the value of the deposit refunded for packaging or packaging waste covered by the system in that year. As a result, the rules are unclear as to whether VAT should actually be charged only on deposits that are not returned. According to the literal wording of some of the provisions, the difference between the value of the deposit on packaging placed on the market and on packaging returned in a given calendar year should be taken into account, although placing on the market does not necessarily imply sale and collection of the deposit. Recording, reporting and checking Tax records are not the only record-keeping requirement under the deposit and return system. The system requires participants to fulfil other record-keeping and reporting obligations. Entity placing packaging on the market: Must keep detailed electronic records of, inter alia, the number, type and value of deposits collected for packaging placed on the market and the number, type and value of deposits refunded for packaging returned in a given year. These records must be kept for 5 years Operator of a deposit and return system: Should also keep detailed records of packaging collected, deposits refunded and waste sent for recycling. The operator should submit annual reports to the province marshal (marszałek województwa) (by 15 March) and to the head of a commune (wójt) or mayor (burmistrz or prezydent miasta) (by 31 January). Commercial entities (collection points): Also required to keep records of deposits collected and refunded and of packaging collected Polish Deposit and Return System – what else to consider There are concerns that by undercutting rates, operators will try to pass on some of the costs of running the system (e.g. the handling fee) to wholesalers and shops. The problem is the lack of precise rules in this regard. Another important issue is the financing of the refund of the deposit by shops. Retailers will have to refund the deposit to consumers “in advance”, and settlements with the operator will be made on a monthly basis. This means that they will have to temporarily fund the deposit refund from their own resources, which may be problematic for smaller operators. Implementing the system also requires extensive preparation: adapting IT systems, logistics, accounting, training staff and informing customers. The selection of an operator and the negotiation of contract terms will be key. Summary The Polish Deposit and Return System is an ambitious project with the potential to make a real difference to the environment. However, its success depends on the seamless functioning of all its components, including clear and workable tax settlement rules. Our recommendations to companies Analyse now how a deposit and return system could affect your business Allow time to adapt your IT, accounting and logistics systems Monitor the process – bear in mind that individual implementing regulations may change Contact potential system operators, ask for quotes and carefully consider the terms and conditions of cooperation If you have any doubts about taxation, consider applying for an advance tax ruling, either yourself or with the help of specialists The implementation of a deposit and return system is a dynamic process that is constantly changing, so keep up to date and seek expert assistance.

PIB Group Poland has been present in Poland since 2020. From that time, it has continually made acquisitions, building a strong group of insurance intermediaries. Its portfolio already includes insurance brokers, reinsurance brokers, multi-agencies and specialised entities operating as MGAs (Managing General Agents). We recently advised the Group on another transaction – the acquisition of RCU Ubezpieczenia and Ramius. This is another important step in the company’s development and implementation of its plan to consolidate the Polish insurance intermediation market. With this merger, PIB will gain new synergies and expand its range of services. RCU Ubezpieczenia and Ramius are well-established companies with a unique business model and a strong brand. Their integration into the PIB Group is another milestone in the development of our organisation and in building a powerful group of insurance intermediaries in Poland, says Bartosz Słupski, CEO of PIB Agency. The project was handled by Paweł Cholewiński, Partner and Head of the Transactional Practices Group, Natalia Kotłowska-Wochna, Partner in the New Tech M&A Practice, and Adam Czarnota, Senior Associate in the Corporate Law and M&A Practice. It is a great honour for us to have provided legal services to PIB Group Poland. This transaction fits perfectly with the consolidation trend we are seeing in the Polish insurance intermediation market. Due to the extensive network of RCU intermediaries and unique cooperation models, the structuring of this acquisition required us to translate the client’s business objectives into transactional documentation. We are proud to have worked with the PIB Group Poland team on this project and to have helped the client achieve its objectives, said Paweł Cholewiński, Partner, Head of the Transactional Practices Group / Real Estate, M&A. Our advisory services included a due diligence investigation of the companies, structuring of the transaction, and drafting and negotiation of the project documentation. The transaction required consideration of not only legal issues but also the specific nature of both businesses in order to develop the optimal solution. Advising on this deal was an interesting opportunity to learn about the business realities of the insurance market, added Natalia Kotłowska-Wochna, Partner in the New Tech M&A Practice. The seller was represented by Andersen Tax & Legal Srokosz i Wspólnicy and cc group as financial advisor.