For the fast tract war rules please see Procedure 3 and Procedure 4 below.

US CITIZENS

PROCEDURE NO. 1 FOR DOCTORS WITH SPECIALIZATION (US specialty board certification)

– Applicable to physicians educated and trained in the USA.

– Limited permit to practice in a specific range of activities, time period and designated place.

– Practice limited to one registered health care institution (without COVID restrictions).

– Procedure is more of a formality.

REQUIREMENTS

A person who has obtained medical qualifications outside of the EU may be granted special permission to practice as a physician and be awarded the conditional permit to practice medicine (hereinafter referred to as “Permit”) for a specific scope of professional activities, period and place of employment in a registered healthcare facility (i.e. hospital) if he/she meets the following criteria:

• has made a written statement of personal knowledge of the Polish language, sufficient to perform the assigned scope of professional activities;
• has obtained a certificate from the registered healthcare institution in Poland, containing a list of organizational units of that institution and the period of planned employment with indication of the range of professional activities corresponding to the range of practice of a specialist in a given field of medicine (hereinafter referred to as „Certificate„);
• has full legal capacity;
• is medically fit to practice medicine
• demonstrates an impeccable ethical attitude, i.e.:

– a declaration of no criminal record made under the threat of criminal liability or.

– document confirming clean criminal record (if it is possible to obtain it in the country of origin);

• has at least three years of professional experience as a specialist (attending) physician during the five years immediately prior to obtaining the Certificate, such experience should be confirmed by the document issued by a competent authority in the country of origin;
• possesses a medical school diploma, issued in a country other than a Member State of the European Union, the total academic curriculum must have been at least five years
• has a diploma of a specialist physician (equivalent to the US board certification), issued in a country other than a Member State of the European Union,
• has completed postgraduate physician’s training (equivalent to US residency / fellowship) corresponding in essential elements to the program of physician specialization training in the Republic of Poland.

PERMIT

– Granted in the form of an administrative decision at the request of the interested party by the Minister of Health of the Republic of Poland.

– Determines the scope of professional activities and the period and place of employment in the registered healthcare facility indicated on the Certificate.

– Permit effective immediately.

– Permit issued for a period not exceeding 5 years.

– The Minister of Health may waive the requirement of certificates validation referred to documents listed in points 7 and 8 above, if the fulfilment of this requirement is impossible or significantly difficult.

On the basis of the Minister’s administrative decision, an appropriate district Physician’s Chamber (equivalent to the US State medical licensing board) shall grant the official Permit. The Physician’s Chamber issues the document called „Permit to practice profession of physician in the Republic of Poland” with an official note that it is a conditional permit (similar to the US state limited license to practice medicine). The Permit must be issued by the Physician’s Chamber within 7 days of receiving the decision of the Minister of Health. The healthcare facility that issued the Certificate shall employ the doctor on the basis of an employment contract for a definite period of time, not longer than the period until the expiry of the Permit.

RESTRICTIONS

A physician may not practice in Poland outside the registered healthcare facility issuing the Certificate, except:

• at the request of the physician, the Minister of Health has granted new Permit on the basis of another Certificate, issued by a different healthcare facility, where there is a particularly high demand for health care services provided by physicians;
• the Minister of Health has referred the doctor by way of an administrative decision to work in a healthcare facility, in which there is a particularly high demand for medical services provided by physicians or dentists
• the physician has been delegated to work in combating the epidemic;

4) the physician provides medical services in healthcare facilities providing services to persons whose stay in Poland is considered legal[1] under the extraordinary circumstances (i.e. war refugees).

PROCEDURE NO. 2 FOR DOCTORS WITH DIPLOMA OR SPECIALIZATION (DURING COVID)

– Applicable to physicians educated and trained in the USA.

– Work performed under the supervision of another doctor (in case of holding an specialist diploma then independently after 3 months of supervision).

– Procedure applies only during the COVID-19.

– Work only in a facility dedicated to providing health services to patients with COVID-19 (Minister of Health can give a permission for working also in other facilities).

REQUIREMENTS

During the declaration of an epidemic state, a person who has obtained a medical qualification outside the EU may be granted with a special permission to practice medicine and be awarded a conditional right to practice medicine if:

• has full legal capacity;
• is medically fit to practice medicine
• demonstrates an impeccable ethical attitude, i.e.:

– a declaration of no criminal record made under the threat of criminal liability, or

– document confirming clean criminal record (if it is possible to obtain it in the country of origin);

• possesses a medical school diploma, issued in a country other than a Member State of the European Union, the total academic curriculum must have been at least five years.

CONDITIONS FOR EXERCISING THE PROFESSION

– Holding an additional specialist diploma (issued in a country other than an EU Member State) – he/she may be authorized to independently pursue the profession (but only after the first 3 months under the supervision of a doctor holding a second degree specialization or a specialist title).

– Without specialist diploma – practice under the supervision of a doctor with a second degree specialization or a specialist title.

PERMIT

– Granted in the form of an administrative decision at the request of the interested party by the Minister of Health of the Republic of Poland.

– Permit effective immediately.

– Determines whether a given person may practice the profession independently or under the supervision of a doctor holding a second degree specialization or specialist title.

– Permit issued for a period not exceeding 5 years.

RESTRICTIONS

– Doctor must notify the Minister of Health as to which healthcare provider he has been employed by and for how long, within 7 days of commencing health services at that provider (failure to notify may constitute grounds for withdrawal of consent).

– Doctor with a conditional right to practice cannot practice outside a healthcare provider designated to provide health services to COVID-19 patients in Poland.

The Minister of Health may grant consent for a doctor with a conditional right to practice his/her profession outside a medical entity intended for the provision of health services to patients suffering from COVID-19. This decision is given the order of immediate enforceability. This authorisation shall be granted on application by the doctor. The decision shall indicate the entity in which the doctor concerned will practice.

PROCEDURE NO. 3 FOR DOCTORS WITH LICENCE TO PRACTISE MEDICINE IN THE USA (WAR REGULATION – EXTENSION OF THE EU DOCTORS PRIVILEDGES TO US DOCTORS)

– Having a license to practice medicine in the USA.

– Granted the right to practice in Poland, but only with respect to treatment of Ukrainian citizens.

– Procedure applicable for 18 months as of February 24, 2022.

The procedure in terms of time is as follows:

• Submitting documents and a declaration of intention to practice medicine on a temporary and occasional basis.
• Registration in the register of physicians practicing the profession on a temporary basis.
• Obtaining a certificate on the fulfillment of the obligation to file a certificate and documents from the Naczelna Rada Lekarska (“Supreme Medical Council”).
• Being assigned a number of the right to practice medicine on the basis of a received certificate mentioned above.

REQUIREMENTS

A physician who has the right to practice in the U.S. may temporarily and occasionally practice the profession of a physician, without the need to obtain a license to practice medicine or without the need to obtain an entry in the register of entities performing medical activities, but only in order to provide health services to Ukrainian citizens.

The following documents must be submitted to the Supreme Medical Council:

• a written declaration to practice medicine on a temporary and occasional basis, including, if possible, the place and time of its practice in Poland (hereinafter referred to as “Declaration”),
• document confirming citizenship,
• a certificate issued by the competent authorities of a USA, stating that he/she has the right to practice the profession of physician in that state, which at the time of the statement is not suspended or limited, and that he/she practices the profession of a physician (hereinafter referred to as “USA Certificate”),
• a document confirming formal qualifications of the physician.

PERMIT

– Upon submission of the Declaration and documents, the doctor will be entered in the register of temporary and occasional practitioners kept by the Supreme Medical Council.

– The Supreme Medical Council will issue a certificate of fulfilment of the obligation to submit the USA Certificate and the required documents (hereinafter referred to as “Certificate on the fulfilment of obligations”).

– Allows treatment only for citizens of Ukraine.

– After obtaining the certificate, the Minister of Health assigns a number corresponding to the number of the right to practice at the request of the doctor (which only applies to the treatment of  the Ukrainian citizens).

CONDITIONS

– A Declaration, shall be submitted before beginning to practice the profession in Poland for the first time and shall be repeated in each year in which the doctor intends to practice the profession in Poland on a temporary and occasional basis.

– Doctor shall submit the documents to the Supreme Medical Council before practicing his/her profession in Poland for the first time and each time there is a significant change in the information contained therein.

– Doctor are exempt from the obligation to register with the Social Insurance Institution in order to make settlements related to the temporary and occasional practice of the medical profession (doctor shall inform in writing about the temporary and occasional practice of the profession to the competent branch of the Social Insurance Institution for the place of practice of the profession, either before the commencement of professional activities or, in an emergency, after their performance).

– Doctor shall submit a statement that the premises, facilities and medical equipment, if any, comply with the requirements specified in the provisions on medical activity.

CITIZENS OF UKRAINE

Citizens of Ukraine may practice the profession under the conditions:

1) specified in procedure No. 1 described above

2) specified in procedure No. 2 described above

– however, citizens of Ukraine, who have been granted conditional eligibility under this procedure, are excluded from the obligation to practice only in a therapeutic entity dedicated to the treatment of COVID-19 patients, in case of:

– the removal of the state of epidemic emergency and the removal of the state of epidemic or

– there is no separate health care facility designated to provide health care services to patients suffering from COVID-19

3) specified in special Procedure No. 4 provided by the new regulations, described below.

PROCEDURE NO. 4 FOR UKRAINIAN CITIZENS ONLY (WAR REGULATION)

– Procedure applies only to the Ukraine citizens.

– Practice limited to one registered health care institution (without COVID restrictions).

– Work performed under the supervision of another doctor (in case of holding an specialist diploma then independently after 3 months of supervision).

– The formal procedure is the same as procedure no. 2, except that there is no restriction to COVID establishments only.

REQUIREMENTS

Person who has obtained a medical qualification outside the EU may be granted with a special permission to practice medicine and be awarded a conditional right to practice medicine if:

• has full legal capacity;
• is medically fit to practice medicine;
• demonstrates an impeccable ethical attitude, i.e:

– a declaration of no criminal record made under the threat of criminal liability, or.

– document confirming clean criminal record (if it is possible to obtain it in the country of origin);

• possesses a medical school diploma, issued in a country other than a Member State of the European Union, the total academic curriculum must have been at least five years.

PERMIT

– Granted in the form of an administrative decision at the request of the interested party by the Minister of Health of the Republic of Poland.

– Permit effective immediately.

– Determines whether a given person may practice the profession independently or under the supervision of a doctor holding a second degree specialization or specialist title.

– Permit issued for a period not exceeding 5 years.

CONDITIONS FOR EXERCISING THE PROFESSION

– Holding an additional specialist diploma (issued in a country other than an EU Member State) – he/she may be authorized to independently pursue the profession (but only after the first 3 months under the supervision of a doctor holding a second degree specialization or a specialist title).

– Without specialist diploma – practice under the supervision of a doctor with a second degree specialization or a specialist title.

RESTRICTIONS

– Practice the profession in a medical entity.

– An obligation to notify the minister of health, in which health care unit and for what period of time they have been employed, within 7 days from the date of commencement of providing health care services in that unit (failure to notify may constitute grounds for withdrawal of consent).

TO OBTAIN MORE INFORMATION PLEASE CONTACT:

Prof. Jarosław J. Fedorowski, MD, PhD, MBA, FACP, FESC President & CEO of Polish Hospital Federation E: biuro@pfsz.org

Andrzej Chełchowski, PhD Partner, Attorney at law T: +48 22 447 43 00 E: chelchowski@millercanfield.com

Paulina Lasota Junior Associate T: +48 22 447 43 00 E: lasota@millercanfield.com

[1] Pursuant to Article 77 of the Law on Assistance to Citizens of Ukraine in Connection with the Armed Conflict on the Territory of Ukraine (entering into force with effect from 24 February 2022).

Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.

Continuing the series of articles on crowdfunding in the area of commercial projects, in this entry we will focus on key aspects related to the EU regulation providing a uniform legal framework for crowdfunding in the European Union. We also encourage you to read the previous article in this series presenting a general outline of the idea of equity and loan crowdfunding as a manifestation of broader processes of democratization of investment and one of the most dynamically developing areas of the financial market on a global scale, including Poland.

The potential of crowdfunding as an alternative form of financing for businesses including startups and small and medium-sized enterprises has been recognized by the European Union authorities already in the past decade and since 2018 intensive work has been going on the Regulation of the European Parliament and of the Council on European Crowdfunding Service Providers for Business („ECSP Regulation„) adopted on 7 October 2020.

The above ECSP Regulation creating a uniform legal framework for the provision of crowdfunding across the European Union became effective as of 10 November 2021. Unfortunately, due to the delay in drafting and enacting a Polish law to apply the ECSP Regulation, the EU regulation in the area of crowdfunding remains in our country essentially dead. In particular, the Polish legislator has not formally appointed an authority responsible for performing the functions and obligations under the ECSP Regulation (in all likelihood, this will be the Polish Financial Supervision Authority), so there is currently no entity authorized to grant licenses to crowdfunding providers.

Counting on the work on the Act on crowdfunding for business ventures to gain momentum (currently, the draft is still at the stage of being worked on by the Council of Ministers), it is worth familiarizing oneself today with the key assumptions of the EU regulation and considering crowdfunding as a tool in one’s activity, both from the perspective of an entity seeking financing as well as a financial institution able to extend the range of products it offers with crowdfunding services.

1. Definition of crowdfunding services

Under the ECSP Regulation, a crowdfunding service is the matching of investors interested in financing business ventures with project owners using a crowdfunding platform, in one of the following two models:

(i) debt financing through loans (loan crowdfunding);

(ii) an investment funding model based on the purchase by interested investors of marketable securities (and instruments authorized for crowdfunding purposes) issued by project owners (equity crowdfunding).

2. Uniform rules for running crowdfunding platforms

The ECSP regulation addresses one of the main limitations of the European crowdfunding market to date, namely the lack of consistent regulation across the entire internal market. The very idea of crowdfunding stems from the need to reach the widest possible range of potential investors, and electronic communication tools (Internet crowdfunding platforms) would seem to be free of the constraints of national borders within the European Union. Unfortunately, until the ECSP Regulation entered into force, the crowdfunding platforms operating to date were to a large extent limited to a given national market. To a large extent, it resulted from the necessity to meet certain legal requirements in force in individual Member States, which differ significantly from one another. The ECSP Regulation places emphasis on enabling the cross-border provision of crowdfunding services. A license granted under the ECSP Regulation in any State of the Union will allow a crowdfunding provider to operate throughout the European Union (subject to national notification obligations).

3. High limit on the acceptable value of crowdfunding offers

The EU legislator, motivated by the desire to protect investors as well as to introduce a mechanism to discipline the market, established a limit for the total value of crowdfunding offers made by a particular project owner. However, this threshold was set at a relatively high level of EUR 5,000,000.

The above threshold coincides with the threshold applied by most Member States for the purpose of exempting public offers of securities from the obligation to publish a prospectus pursuant to Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. It is worth noting that Poland is one of the countries in which the above threshold has so far been at a much lower level. The entry into force of the ECSP Regulation prompted the national legislator to change and gradually raise it to the level of EUR 5,000,000.

4. Obligations and restrictions on crowdfunding providers

In order to mitigate the risks associated with crowdfunding and to guarantee a high standard of investor protection, the ECSP Regulation has introduced a number of obligations and restrictions for crowdfunding providers, the most important of which are:

– an obligation to have a real and stable establishment in the European Union and to have the necessary resources for their activities;

– an obligation to comply with prudential requirements in the amount arising from the ECSP Regulation;

– an obligation for crowdfunding providers to develop and comply with internal procedures and policies for their effective and prudent management

– an obligation to exercise due diligence on project owners submitting projects for funding through the platform (crowdfunding providers should put in place policies to ensure that the selection of projects on their platforms is carried out in a professional, fair and transparent manner and that crowdfunding services are provided in the same manner)

– an obligation to avoid conflicts of interest, which amounts to a prohibition for crowdfunding providers to hold any interest in crowdfunding offers on their platforms and significant restrictions on the holding of such interests by affiliates of crowdfunding providers.

5. Investor protection

In an attempt to balance investor protection with the additional restrictions and rigidities it entails, the ECSP Regulation introduces a distinction between sophisticated and non-sophisticated investors. This division is essentially based on the distinction between professional and retail clients established by the MiFID II Directive.

Due to the above classification, investors who, on the basis of the data provided by them, qualify as sophisticated investors will be exempted from additional requirements and restrictions applicable to non-sophisticated investors.

Non-sophisticated investors will be required to carry out an initial knowledge test and a simulation of their ability to bear losses before investing via a crowdfunding platform. Although the ECSP Regulation does not introduce an absolute limit on the amount of investment for non-sophisticated investors, investments with a higher value (i.e. above EUR 1,000 or 5% of the net asset value – whichever is higher) will require prior fulfillment of additional requirements by non-sophisticated investor.

In conclusion, the entry into force of the ECSP Regulation will certainly be a breakthrough in the functioning of the European crowdfunding market. In the following months we may expect the emergence of new entities interested in starting up crowdfunding services. In turn, entrepreneurs currently operating in this area will adjust their business model to the new requirements of the ECSP Regulation.

It is to be hoped that the aforementioned work on the Polish law for the application of the ECSP Regulation in our country will result in its rapid enactment, which will allow Polish entrepreneurs to join the European trend for accelerated development of equity and loan crowdfunding.

TO OBTAIN MORE INFORMATION, PLEASE CONTACT THE AUTHOR:

Piotr Rusin
Attorney at law
T: +48 22 447 43 00
E: rusin@millercanfield.com

 

Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield, and is based on the facts and guidance available at the time of its release which may be subject to change. The purpose of the publication is to draw attention to the legal events indicated in it and should not be the sole basis for any decision regarding a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases.

#StandWithUkraine

On 12 March 2022, the special act on assistance to Ukrainian refugees in connection with Russia’s invasion of Ukraine (the “Special Act”) entered into force. With few exceptions, the Special Act shall apply retroactively from 24 February 2022, i.e., the day Russia invaded Ukraine. The provisions of the Special Act apply to Ukrainian citizens and their spouses (who do not have Ukrainian citizenship) who came to Poland directly from the territory of Ukraine in connection with hostilities conducted on the territory of that state, as well as to Ukrainian citizens holding a Pole’s Card and their immediate family members. Below are the main provisions adopted under the Special Act.

• Stay in Poland

Under the Special Act, if a citizen of Ukraine has entered or enters Poland legally from 24 February 2022 to the date specified in the implementing regulation (which is yet to be issued) and declares his/her intention to remain in Poland, his or her stay will be deemed legal for a period of 18 months (counting from 24 February 2022). The foregoing regulation shall not apply to citizens of Ukraine who were granted a permanent residence permit, a long-term European Union residence permit, a temporary residence permit, refugee status, subsidiary protection, consent for a tolerated stay or have submitted application for international protection.

If thereafter a Ukrainian citizen leaves Poland for a period of more than 1 month, he or she would then lose the right to stay legally in Poland on the terms set out in the Special Act.

The Polish Border Guard is to keep a register of Ukrainian citizens who enter Poland directly from Ukraine in connection with hostilities conducted there and who have applied for registration of stay in Poland. If the entry of a Ukrainian citizen has not been registered at the Polish Border Guard post while crossing the border, the Ukrainian can register his or her stay in Poland no later than 60 days from the date of entry, in any municipal authority in Poland. Submitting an application for registration of stay is also a basis for assigning a Polish PESEL identification number to a citizen of Ukraine.

For citizens of Ukraine whose stay has been registered and is recognized as legal, the Special Act also contemplates the possibility to apply for extension of stay beyond the 18 months period, i.e. for a period of 3 years from the date of the decision. In order to do so, a Ukrainian citizen would need to submit an application for a temporary residence permit no earlier than 9 months from the date of entry to Poland and no later than 18 months from 24 February 2022. Once the extended temporary residence permit is granted, the Ukrainian citizen is entitled to work in Poland without the need for a work permit.

The Special Act also includes provisions regulating the status of those Ukrainian citizens who were already in Poland at the outbreak of the war. Under these provisions, if the stay of a Ukrainian citizen in Poland was legal on 24 February 2022, his or her stay shall be deemed legal until 31 December 2022 or for 18 months – depending on the legal basis legalizing the stay, and the period of validity of the related documents would be extended accordingly. Such an extension of legal stay in Poland for 18 months also applies to Ukrainian citizens, who entered Poland on the basis of the Polish Border Guard granted for humanitarian reasons (despite the lack of a visa or other documents that normally are required to enter Poland).

• Work in Poland

A Ukrainian citizen will be entitled to work in Poland legally if his or her stay in Poland is deemed legal pursuant to the Special Act or other applicable regulations, provided that the employer notifies the applicable district labor office of the hiring. The notification must take place within 14 days of the date of commencement of work by the Ukrainian worker and should be done electronically via the praca.gov.pl online portal.

A Ukrainian citizen can also register and be officially recognized as unemployed or seeking employment, which would entitle him or her to receive support in finding a job from the Labor Office. The usual upper limit of the age for such registration (60 years for a woman or 65 years for a man) will not apply to such Ukrainian citizens.

• Conducting business activity in Poland

Ukrainian citizens whose stay in Poland is considered legal pursuant to the Special Act or the Act of 12 December 2013 on Foreigners may undertake and conduct business activity in Poland on the same terms as Polish citizens, provided that they obtain a PESEL number in advance.

• Access to health care system

Ukrainian citizens whose stay is legalized under the provisions of the Special Act (but not under other, generally applicable immigration regulations), are entitled to medical and health care services available in Poland to persons covered by Poland’s public social insurance scheme. They are eligible to receive all health care services, except for stays in health resorts, including rehabilitation in such resorts. Ukrainian patients will also be able to obtain and fill prescriptions on the same conditions and at the same rates as Poles. It is worth to note that the National Health Fund recommended the health care entities to provide assistance and aid to the Ukrainians even prior the entry into force of the special regulations, as they were to apply retroactively, i.e., from 24 February 2022, which was indeed confirmed by the provisions of the Special Act.

• Financial and material assistance

As a rule, Ukrainian citizens whose stay is legalized under the provisions of Special Act (but not under other, generally applicable immigration regulations) are eligible to receive certain financial benefits, provided they also fulfill certain prerequisites as set forth in Polish applicable regulations.

Such benefits consist of the following: (a) low income allowances, in particular connected with expenses incurred with respect to children or other family members, including (i) family allowance, (ii) single child benefits, (iii) nursing allowance, (iv) care allowance, (v) special care benefit, (vi) parental allowance, (vii) municipal allowances; (b) allowances connected with living with children in Poland, including (i) child benefit (commonly known as 500+), (ii) good start allowance, (iii) family care capital, (iv) financing reduced parent fee connected with nursery; (c) allowances connected to the personal, family, profit, property situation; (d) social financial assistance provided under the Act on the Education System; (e) food aid under the Food Aid 2014-2020 operational program following fulfillment of relevant conditions; and (f) special aid provided to citizens with disabilities.

In order to be eligible to receive these financial allowances, eligible Ukrainian citizens must fulfill the normal prerequisites set out in applicable regulations, as may be modified accordingly as a result of the special circumstances connected with war. For instance, the calculation of income determining the eligibility for family benefits shall not include the income of the family member not staying in Poland. Further, in order to benefit from the majority of aforementioned rights, especially those connected with parenthood, it is necessary to be registered with the register maintained by the Polish Border Guard Chief Commander, or to have the child registered therein with respect to child benefits.

In addition, eligible Ukrainian citizens are entitled to receive a one-time payment equal to PLN 300 per person aimed at financing subsistence expenses (e.g., food, clothing, accommodations). An application for such a payment shall be submitted to the applicable social welfare center (social service center). Eligible Ukrainians may also be provided with free psychological aid.

Apart from the above, pursuant to the Special Act, the governor of each province (voivode) or another competent authority may provide, under certain circumstances, assistance to the eligible Ukrainian citizens for accommodations, provision of full-board meals, and certain public transportation fee exemptions. Local governments may also voluntarily provide assistance and aid from their own resources, the scope of which is to be determined by a resolution of the competent authority.

• Tax exemptions and incentives

The Special Act also provides for certain favorable tax incentives, both for Ukrainians fleeing the war and for those who provide them with financial or material support. For example, eligible Ukrainians will be exempt from income tax for receiving humanitarian aid and certain benefits. Furthermore, the costs of gratuitous benefits and the costs of manufacturing or purchasing goods that are further donated between 24 February 2022 to 31 December 2022 to certain entities (e.g. NGOs) for purposes related to counteracting the effects of hostilities on the territory of Ukraine, will be tax deductible expenses.

• Education

The Special Act includes provisions providing Ukrainian children with access to educational institutions (e.g. schools and kindergartens). Other provisions allow students from Ukraine to continue their studies in Poland, in particular by waiving the process of verifying studies already completed. Students from Ukraine who want to continue studies in Poland will also be able to apply for social scholarships and student loans.

• Polish identification number (PESEL) and trusted profile (ePUAP)

The Special Act introduces a special procedure for Ukrainian citizens to obtain an identification PESEL number, which is necessary for them to access various public services and conduct business activities. The application for a PESEL may be submitted at any local municipal authority in Poland. The application may include consent to confirm a trusted profile that allows access to administrative services via the ePUAP electronic platform. Ukrainians will also be able to use mObywatel – a free app in which certain data from public registers (e.g. PESEL register) is available and thanks to which, in certain situations, one can confirm his or her identity.

• Support for hosts of Ukrainian citizens

Pursuant to the Special Act, any entity, in particular a natural person running a household, who provides accommodation and food to Ukrainian citizens fleeing the war, may be granted a cash benefit on this account. The benefit will be paid at the request of the entitled entity or person for a period not longer than 60 days (with the possibility of extension in particularly justified cases). The amount and conditions for granting this benefit will be specified in the separate regulation (the planned amount is PLN 40 per day per person).

In order to encourage private individuals to make housing available to Ukrainians, the Special Act abolishes the ban on the eviction of tenants who are lending the premises for use. The Special Act also exempts the Ukrainian tenants from certain formal requirements for occasional leases, e.g. from submitting a declaration in the form of a notarial deed on voluntary submission to enforcement regarding emptying the premises and indicating the premises to which he will be able to move out.

FOR MORE INFORMATION PLEASE CONTACT OUR TEAM SUPPORTING UKRAINIAN REFUGEES:

Andrzej Czopski Attorney at law, Principal T: +48 58 782 00 50 E: czopski@millercanfield.com	Andrzej Kiedrzyn Attorney at law T: +48 22 447 43 00 E: kiedrzyn@millercanfield.com	Karolina Figura Attorney at law T: +71 780 31 00 E: figura@millercanfield.com
Magdalena Olkiewicz-Borkowska Attorney at law T: +48 58 782 00 50 E: olkiewicz@millercanfield.com	Emilia May Attorney at law T: +48 782 00 50 E: may@millercanfield.com	Magdalena Pilarska Attorney at law T: +48 782 00 50 E: pilarska@millercanfield.com
Paulina Lasota Junior Associate T: +48 22 447 43 00 E: lasota@millercanfield.com

 

Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.

Herr Jan Akimenkow arbeitet bei Miller Canfield in Breslau. Er  hat das Hochschulstudium an der Breslauer Universität in Richtung Recht, Verwaltung und Wirtschaft absolviert. 2021 begann er seine Ausbildung zum Rechtsbeistand bei der Bezirksrechtsbeistandskammer in Wałbrzych.

Herr Akimenkow interessiert sich für Zivilrecht, Wirtschaftsrecht, insbesondere Gesellschaftsrecht, Wirtschaftsprivatrecht, Baurecht und Kapitalmarktrecht. Seit 9 Jahren sammelt er Erfahrungen sowohl in der Privatwirtschaft (auch im Finanzbereich) als auch im öffentlichen Sektor.

Privat begeisterter Tennisspieler – langjähriges Mitglied der Tennisabteilung der Breslauer Universität. Er spricht fließend Englisch und Russisch.

Kontakt: akimenkow@millercanfield.com

#StandWithUkraine

On 7 March 2022 the Polish government presented to the Polish Parliament (the „Sejm„) a draft of a special act on assistance to citizens of Ukraine in connection with Russia’s invasion of Ukraine (the “Special Act”). The Sejm will now consider the Special Act. Once finally adopted, the Special Act would apply retroactively from 24 February 2022, i.e., the day Russia invaded Ukraine. Below are the main provisions of the draft Special Act.

• Stay in Poland

Under the Special Act, if a citizen of Ukraine has entered or enters Poland legally from 24 February 2022 to the date specified in the implementing regulation (which is yet to be issued) and declares his/her intention to remain in Poland, his or her stay will be deemed legal for a period of 18 months. The foregoing shall not apply to citizens of Ukraine who were granted a permanent residence permit, a long-term European Union residence permit, a temporary residence permit, refugee status, subsidiary protection, or consent for a tolerated stay.

If thereafter a Ukrainian citizen leaves Poland for a period of more than 1 month, he or she would then lose the right to stay legally in Poland on the terms set out in the Special Act.

The Polish Border Guard is to keep a register of Ukrainian citizens who enter Poland directly from Ukraine in connection with hostilities conducted in Ukraine and who submit an application to register to stay in Poland. If the entry of a Ukrainian citizen has not been registered at the Polish Border Guard post while crossing the border, the Ukrainian can register his or her stay in Poland no later than 60 days from the date of entry with the applicable Polish municipality.

Once the Ukrainian citizen’s stay in Poland is registered and recognized as legal, the Special Act also contemplates the possibility for a Ukrainian citizen to apply to extend his or her stay in Poland beyond the 18 months period, for a period of 3 years from the date of the decision. In order to do so, a Ukrainian citizen would need to submit an application for the extended temporary residence permit no earlier than 9 months from the date of entry to Poland and no later than 18 months from 24 February 2022. Once the extended temporary residence permit is granted, the Ukrainian citizen is entitled to work in Poland without the need for a work permit.

The Special Act also includes provisions regulating the status of those Ukrainian citizens who were already in Poland at the outbreak of the war. Under these provisions, if the Ukrainian’s stay in Poland was legal on 24 February 2022, his or her stay shall be deemed legal until 31 December 2022, and the validity of any accompanying documentation would be similarly extended. Such an extension of legal stay in Poland until 31 December 2022 also applies to Ukrainian citizens, who entered Poland on the basis of other exceptions consented to by the Polish Border Guard’s Commander-in-Chief (e.g., due to the lack of a visa or other documentation, which is normally required to enter Poland).

• Work in Poland

A Ukrainian citizen will be entitled to work in Poland legally if his or her stay in Poland is deemed legal pursuant to the Special Act or other applicable regulations, provided that the employer notifies the applicable district labor office of the hiring. The notification must take place within 7 days of the date of commencement of work by the Ukrainian worker and can be done electronically via the praca.gov.pl online portal.

A Ukrainian citizen can also register and be officially recognized as unemployed or seeking employment, which would entitle him or her to receive support in finding a job from the Labor Office. The usual upper limit of the age for such registration (60 years for a woman or 65 years for a man) will not apply to such Ukrainian citizens.

• Conducting business activity in Poland

Ukrainian citizens whose stay in Poland is considered legal pursuant to the Special Act or the Act of 12 December 2013 on Foreigners may undertake and conduct business activity in Poland on the same terms as Polish citizens, provided that the Ukrainian citizen obtains a PESEL number.

• Access to health care system

Ukrainian citizens whose stay is legalized under the provisions of the Special Act (but not under other, generally applicable immigration regulations), are to be entitled to receive the regular health care benefits available to Polish persons covered by Poland’s social insurance scheme. They are eligible to receive all health care services, except for stays in health resorts, including rehabilitation in such resorts. Ukrainian patients will also be able to obtain and fill prescriptions on the same conditions and at the same rates as Poles. The National Health Fund advises the health care entities to provide assistance and aid to the Ukrainians even prior the entry into force of the planned regulations, as they are to be effective retroactively, i.e., from 24 February 2022.

• Financial and material assistance

As a rule, Ukrainian citizens whose stay is legalized under the provisions of Special Act (but not under other, generally applicable immigration regulations) are eligible to receive certain financial benefits, provided they also fulfill certain prerequisites as set forth in Polish applicable regulations.

Such benefits consist of the following: (a) low income allowances, in particular connected with expenses incurred with respect to children or other family members, including (i) family allowance, (ii) single child benefits, (iii) nursing allowance, (iv) care allowance, (v) special care benefit, (vi) parental allowance, (vii) municipal allowances; (b) allowances connected with living with children in Poland, including (i) child benefit (commonly known as 500+), (ii) good start allowance, (iii) family care capital, (iv) financing reduced parent fee connected with nursery; (c) allowances connected to the personal, family, profit, property situation; (d) social financial assistance provided under the Act on the Education System; (e) food aid under the Food Aid 2014-2020 operational program following fulfillment of relevant conditions; and (f) special aid provided to citizens with disabilities.

In order to be eligible to receive these financial allowances, eligible Ukrainian citizens must fulfill the normal prerequisites set out in applicable regulations, as may be modified accordingly as a result of the special circumstances connected with war. For instance, the calculation of income determining the eligibility for family benefits shall not include the income of the family member not staying in Poland. Further, in order to benefit from the majority of aforementioned rights, especially those connected with parenthood, it is necessary to be registered with the register maintained by the Polish Border Guard Chief Commander, or to have the child registered therein with respect to child benefits.

In addition, eligible Ukrainian citizens are entitled to receive a one-time payment equal to PLN 300 per person aimed at financing subsistence expenses (e.g., food, clothing, accommodations). An application for such a payment shall be submitted to the applicable social welfare center (social service center). Eligible Ukrainians are also eligible to receive payments for psychological aid.

Apart from the above, pursuant to the Special Act, the governor (voivode) of each province may provide, under certain circumstances, assistance to the eligible Ukrainian citizens for accommodations, provision of full-board meals, and certain public transportation fee exemptions. Local governments may also voluntarily provide assistance and aid from their own resources, the scope of which is to be determined by resolution.

• Tax exemptions and incentives

The Special Act also provides for certain favorable tax incentives, both for Ukrainians fleeing the war and for those who provide them with financial or material support. For example, the Special Act introduces an exemption from the donation tax with respect to donations received by Ukrainian citizens coming to Poland from 24 February 2022 to 31 June 2022. Also, eligible Ukrainians will be exempt from income tax for receiving humanitarian aid and certain benefits. Furthermore, the costs of manufacturing or purchasing goods that are further donated between 24 February 2022 to 31 December 2022 to certain entities (e.g. NGOs) for purposes related to counteracting the effects of hostilities on the territory of Ukraine, will be tax deductible expenses.

• Education

The Special Act includes provisions providing Ukrainian children with access to educational institutions (e.g. schools and nurseries). Other provisions allow students from Ukraine to continue their studies in Poland, in particular by waiving the process of verifying studies already completed. Students from Ukraine who want to continue studies in Poland will also be able to apply for social scholarships and student loans.

• Polish identification number (PESEL) and trusted profile (ePUAP)

The Special Act introduces a special procedure for Ukrainian citizens to obtain an identification PESEL number, which is necessary for them to access certain public services and conduct business activities. The application for a PESEL may be submitted at any local municipal authority in Poland. The application may include consent to confirm a trusted profile that allows access to administrative services via the ePUAP electronic platform. Ukrainians will also be able to use mObywatel – a free app in which certain data from public registers (e.g. PESEL register) is available and thanks to which, in certain situations, one can confirm his or her identity.

FOR MORE INFORMATION PLEASE CONTACT OUR TEAM SUPPORTING UKRAINIAN REFUGEES:

Andrzej Czopski Attorney at law, Principal T: +48 58 782 00 50 E: czopski@millercanfield.com	Andrzej Kiedrzyn Attorney at law T: +48 22 447 43 00 E: kiedrzyn@millercanfield.com	Karolina Figura Attorney at law T: +71 780 31 00 E: figura@millercanfield.com
Magdalena Olkiewicz-Borkowska Attorney at law T: +48 58 782 00 50 E: olkiewicz@millercanfield.com	Emilia May Attorney at law T: +48 782 00 50 E: may@millercanfield.com	Magdalena Pilarska Attorney at law T: +48 782 00 50 E: pilarska@millercanfield.com
Paulina Lasota Junior Associate T: +48 22 447 43 00 E: lasota@millercanfield.com

 

Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.

Three distinct parties are usually involved in the delivery of a construction project: the project owner, the general contractor, and the subcontractor (or subcontractors). But whereas the relationship between the project owner and the general contractor on the one hand, and the relationship between the general contractor and the subcontractor on the other, are contractually based, there is no contract between the project owner and the subcontractor. To secure the subcontractor’s right to be paid for their work, however, the Polish law explicitly provides for a situation in which the subcontractor, in the event of the general contractor’s failure to pay, can seek payment directly from the project owner. The legal basis for that is the stipulation in Article 647¹ of the Civil Code that the project owner is jointly and severally liable with the general contractor for payment of the subcontractor’s fee. Article 647 lays out clear conditions for when the subcontractor is entitled to do that. But as we will see, Article 647 is not the only legal option available to the subcontractor to successfully seek payment from the project owner.  

Joint and several liability

It is accepted in legal doctrine that the project owner’s joint and several liability goes further than warranty liability, that a debt obligation clearly arises on the part of the project owner by force of law, and that the purpose of joint and several liability is to give the subcontractor as strong a legal means as possible of enforcing payment for their work.[1]

Under Article 647¹, the subcontractor is entitled to seek payment directly from the project owner 1) if there is an agreement between the project owner and the general contractor that explicitly names the subcontractor and details the scope of work that they will perform; or 2) if the general contractor, or the subcontractor, notified the project owner about the appointment of the subcontractor, and about the scope of work that they would perform, prior to the commencement of the work, and the project owner did not assert an objection to the subcontractor’s appointment within 30 days. Importantly, both the agreement and the notification must be put in writing.

If neither 1) nor 2) obtains, the project owner’s joint and several liability is cancelled.

Unjust enrichment

But joint and several liability is not the only legal basis that the subcontractor can use to seek payment directly from the project owner. Another is unjust enrichment, which is regulated in Article 405 of the Civil Code.

Unjust enrichment arises when a civil law person receives a benefit, i.e. is enriched, without an adequate legal basis at the expense of another person. The law imposes an obligation on the beneficiary, i.e. the recipient of the unjust benefit, to make restitution in kind or to pay a sum equal to the amount of the benefit received. So unjust enrichment is a source of civil liability separate from contract.[2]

Legal doctrine states that, whatever the means by which the benefit is unjustly conferred on the beneficiary, the liability is between the beneficiary and the impoverished party[3]. It distinguishes as many as six different types of unjust enrichment, depending on the entities involved[4]. The following two types best fit our case: using the services of the impoverished party (the subcontractor), and unjust acquisition of assets by the beneficiary (the project owner).

Under Article 405, to establish unjust enrichment, the claimant (i.e., the subcontractor in our case) has to demonstrate the following: impoverishment of the claimant; enrichment of the defendant (i.e., the project owner) and its amount; and a direct connection between the impoverishment and the enrichment.

Undue benefit as a form of unjust enrichment

But does the subcontractor always have to demonstrate these conditions? The courts have taken a different view.[5] Analysis of available court practice shows that the starting point is whether a benefit has arisen between the subcontractor and the project owner.[6] It appears, therefore, that the first legal route available to the subcontractor is to claim undue benefit and seek its restitution under Article 410 of the Civil Code.[7]

In a 2017 ruling[8], the Supreme Court stated that in a multi-party arrangement, what matters is who in fact provided the benefit and whether the beneficiary has a legal basis to retain the benefit, and not how the benefit was transferred […] the right to seek restitution under Article 410 § 2 of the Civil Code accrues among parties to the benefit, i.e. the relationship that is the legal cause of the gain, and not the relationship within which the gain took place.

Undue benefit is a form of unjust enrichment. It is clear from the above that invoking undue benefit requires fewer conditions to be fulfilled than unjust enrichment, and that these conditions are easier to demonstrate than e.g. the causal link between the subcontractor’s impoverishment and the project owner’s enrichment, or the amount of the enrichment.

This is not the end of the problem, though, for there are matters which the Civil Code does not regulate explicitly and over which controversies exist: 1) if the project owner has paid the general contractor, does this render the subcontractor’s payment claim towards the project owner ineffective? 2) does submission of a VAT invoice satisfy the requirement to demonstrate the amount of the project owner’s benefit? 3) is the subcontractor only entitled to seek payment of a sum equal to the cost of materials used? Despite these problems, however, legal doctrine and court practice both suggest that the subcontractor has a strong case to successfully seek payment from the project owner.

Conclusions

Undue benefit under Article 410 of the Civil Code always has application priority and is more favourable than unjust enrichment under Article 405 of the Civil Code where a benefit has arisen between two identifiable parties, i.e. in our case between the subcontractor and the project owner: that is, if the subcontractor has performed an action or omission towards the project owner, e.g. constructed a part of a building.

By Jan Akimenkow, trainee attorney-at-law

Originally published in PMR Construction Insight Poland, No. 3 (252), March 2022

 

[1] Cf. Kidyba, Andrzej (ed.), Kodeks cywilny. Komentarz. Tom III. Zobowiązania – część ogólna, 2nd edition, Warsaw 2014.

As the author points out: That is because the subcontractor performs the work for the benefit, not of the general contractor but of the project owner. It is the project owner, not the general contractor, who is the recipient (and the enriched entity). Thus, the transfer of value is between the subcontractor and the project owner.

[2] The difference is also evident in the civil legal process. But at the same time, these two legal bases are not mutually exclusive, and in line with the iura novit curiae principle, if the conditions of ex contractu liability are not fulfilled, unjust enrichment may be invoked. For a fuller analysis see: Partyk, Aleksandra „Wyrok nie może być niespodzianką dla stron,” LEX/el., Warsaw 2017. Cf. the Supreme Court ruling of 2 February 2011 II CSK 414/10.

[3] Gudowski, Jacek (ed), Kodeks cywilny. Komentarz. Tom III. Zobowiązania. Część ogólna, 2nd edition, Warsaw 2018.

[4] Cf. Kidyba, Andrzej (ed), op.cit.

[5] Cf. the following rulings: the Court of Appeals in Lublin of 18 May 2020 I AGa 57/20, the Court of Appeals in Warsaw of 7 March 2018 VII AGa 245/18, the Court of Appeals in Warsaw of 12 February 2018 VII AGa 68/18, the Court of Appeals in Lodz of 17 March 2018 I ACa 1380/17.

[6]  As the Supreme Court correctly stated in its ruling of 15 May 2014 II CSK 517/13: the mere fact of provision of an undue benefit justifies a claim for its restitution. In such a case, there is no need to establish whether, and to what extent, the recipient was enriched and the provider impoverished.

[7] As the Supreme Court correctly stated in its ruling of 29 November 2016 I CSK 798/15: Receipt of an undue benefit is a particular instance of unjust enrichment. . . The general conditions of unjust enrichment should be understood in a special way in the case of undue benefit, and the mere fact of provision of an undue benefit justifies a claim for its restitution. As a result, there is no need to establish whether, and to what extent, the benefit enriched the recipient and impoverished the provider.    

[8] Cf. Supreme Court ruling of 7 July 2017 V CSK 629/16.