POLISH LAWYER UNRAVELS A LEGAL MYSTERY: ARE SUBCONTRACTS TO A FOREIGN PRIME LIABLE FOR OFFSETS?

Poland’s new offset law may now be more than three years old but it’s still showing little sign of practical application.

That’s the conclusion of Tomasz Zalewski, Head of Public Procurement and IP and a partner at the law firm Wierzbowski Eversheds Sutherland.

One of the issues that may raise doubts is the law’s scope, says Tomasz Zalewski. It’s unclear, for example, whether a foreign supplier must commit to an offset agreement when a Polish supplier to the government subcontracts to a foreign company. These doubts, he says, result from the legal definition of a “foreign supplier.”

“[It] does not exclude expressly the foreign subcontractor who supplies the relevant equipment and materials to a Polish contractor, [a] party to the agreement with the Polish State Treasury,” says Mr Zalewski.

However, the term “supply contract” does not apply to the subcontractor. Consequently, a subcontract concluded by a foreign company with a Polish supplier that had concluded a contract with a contracting authority does not impose offset obligations. “The situation was different under the previous offset regulations,” he mused.

The 2014 offset law limits the definition of the contracting authority only to an entity entitled to conduct a contract award procedure to protect essential national security interests. It does not allow for offsets from a foreign subcontractor to a Polish company under contract with the Polish State Treasury.

Mr Zalewski cautions that this conundrum only affects subcontracts concluded with Polish suppliers who are not subsidiaries of a foreign company. The offset law sees supply agreements concluded by parent entities or subsidiaries of a foreign supplier as concluded by a foreign supplier.

 

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