Commission Report (2002): Poland

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 4: Free movement of capital

Progress since the last Regular Report

Since the last Regular Report some further progress has been made, in particular in the area of payment systems.

In the field of capital movements and payments, no progress can be reported.

Amendments to the Banking Law and Regulations of the Ministry of Finance on cross-border Credit Transfers and the Act on Settlement Finality largely transpose the acquis on payment systems. The Polish Banks Association has established a Banking Consumer Arbitration body to deal with the settlement of complaints between banks and their customers. A judge was appointed and the arbitration body commenced its operations in March 2002.

The 2001 law on money laundering has been amended in order to postpone registration of all cash transactions above EUR 10 000 from April 2002 until July 2004. The obligation to report ``suspicious'' transactions to the General Inspector of Financial Information remains to be implemented. By March 2002, the General Inspectorate for Financial Information (GIFI) which, together with the Department for Financial Information, constitutes the Financial Intelligence Unit (FIU), had received 351 reports of suspicious transactions from the reporting entities. Following GIFI analysis of these reports, 38 cases have been passed to the Prosecution Office, out of which for 37 cases the criminal proceedings have been initiated. To date, there has been one conviction.

Overall assessment

While the overall level of alignment with the acquis in this area remains high, the substantial restrictions referred to in the previous report (direct investments from foreign entities in specific economic sectors) remain. These restrictions concern air transport (see also Chapter 9, Transport policy), broadcasting, telecommunications, gambling and legal services. In general these restrictions are limited and in a number of cases legislation has been adopted which will see them abolished from the date of accession. The new Foreign Exchange Law, which is presently before Parliament is intended to abolish most of the restrictions on short-term capital transactions. Legislation is also pending with regards to the outstanding issues related to the ownership of land. Legislation is not yet under preparation to amend the Laws governing investment rules for occupational pensions so as to align this field with the acquis.

Foreign Direct Investments, which reached a peak in 2001, have fallen. While this is in part a result of declining privatisation receipts, there are also concerns that Poland's image as a host country for investment has suffered as a result of recent disputes (see Economic Criteria).

As regards payment systems, further fine-tuning is needed for full alignment with the directives on cross border credit transfers and on settlement finality. The appropriate infrastructure in relation to payment and securities settlement is in place.

As regards money laundering, increased efforts are needed to complete transposition of the money laundering acquis (identification of customers, keeping of records). Further alignment is also necessary, notably in order to introduce the obligation to identify customers when entering into business relations and to keep records of transactions over EUR 15 000. Staffing and technical resources of the Financial Intelligence Unit (FIU), which currently employs 37 people, need to be strengthened. Efficient routines within the FIU in line with the requirements of the acquis should be established and reporting should be limited to suspect transactions.

Conclusion

In its 1997 Opinion, the Commission concluded that the Polish government's efforts to liberalise capital movements have met with considerable success. It added, however, that further efforts were still required to eliminate the remaining restrictions on the movement of capital and that the application of the acquis regarding the ownership of land and related assets by foreign nationals might present a significant problem in the medium term.

Since the Opinion, Poland has made steady progress, both in aligning its legislation and in developing the necessary administrative structures. However, the aim for full liberalisation of medium- and long-term capital movements by 1998 and of short-term capital movement by 1999 has been postponed to the date of accession.

Negotiations on this chapter have been provisionally closed. Poland has been granted transitional arrangements concerning the acquisition of secondary residences (for a period of five years following accession) and the acquisition of agricultural and forestry land (for a period of 12 years following accession). The latter transition period, however, does not apply to self employed farmers from European Economic Area Countries who have been leasing land for three respectively seven years, depending on the region. Poland is generally meeting the commitments it has made in the accession negotiations in this domain.

In order to complete preparations for membership, Poland's efforts should now focus on passing the legislation necessary to ensure the timely elimination of all remaining restrictions, including on the purchase of land, and on reinforcing the administrative capacity of the bodies involved in the fight against money laundering.

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