Well, dabbling in international politics is certainly thought-provoking and fun. However, the impact of the signing of the US-Poland missile shield agreement on my business has been minimal. So far, a client and my Mom have called to ask whether this agreement puts me in personal danger. Thanks for caring, but I’m not particularly worried.

In fact to show how blasé I am, I’m daring to talk about something else: the far more mundane, but relevant issue of doing business in Poland.

Starting September 20, 2008, Polish companies will be able to suspend operations. Yes, it may be hard to believe, but all this time Polish companies either were supposed to be industriously doing business (and filing all necessary reports and paying any necessary withholding or other taxes) or be in the process of liquidation.

Under the new change to the Law on Freedom of Economic Activity, a company that does not have any employees may suspend its operations for as little as one month or as much as 2 years. During suspension, a company may not actively conduct business (such as accepting new orders), but take necessary actions to protect its business base. The Law enumerates several of these, including settling up debts, sale of fixed assets, and responding to administrative audits.

The paperwork for suspension is simple. You would need to file with the business register your basic corporate information, the time period of the suspension, and a confirmation that you do not have any employees.

--Judi

The current war of words between Russia, Poland and the US over Poland’s decision to permit the US to locate 10 interceptors on its soil raises an interesting legal issue: Is the missile defense shield treaty legal? Can Poland enter into a new defense agreement with the US without approval of the EU? Doesn’t the Treaty of the European Union require each member state to cede control over security matters to the EU? The answer, it appears, isn’t so simple.

Generally, EU member states are obligated to “support the Union’s external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity” (Art 11(2)). Moreover, the EU Council of Ministers is charged with responsibility for defining the overall foreign policy and security guidelines for the EU, including “matters with defense implications”. And just to avoid any doubt, Art 11 requires each member state to “refrain from any action which is contrary to the interests of the Union”.

Certainly an act that would result in the redirection of Russian missiles toward the EU would be contrary to the interests of the Union....right? Arguably yes, but in this case it may not be enough to prevent Poland from taking such unilateral action.

The EU Treaty, it turns out, merely provides for the possibility of establishing a common defense policy, the creation of which is not yet a foregone conclusion. To date each member state retains control over its own foreign policy and defense. But what if the Reform Treaty is adopted and becomes binding law? Would Poland be in breach from day one? The answer is again found in Art. 17: “The policy of the Union…shall not prejudice the specific character of the security and defense policy of certain member states and shall respect the obligations of certain member states, which see their common defense realized in the North Atlantic Treaty Organization…”

In other words, as a member of NATO Poland is free to locate the missile interceptors on its soil.

-- Paul Fogo 

Last week Poland and the United States reached agreement to place 10 interceptor missiles in Poland following nearly two years of negotiations. The timing of the agreement, following fast on the heals of the Russian incursion into Georgia, has many analysts questioning the underlying purpose of the missile shield.

The US administration has always maintained that the interceptors are defensive in nature, intended to block a potential attack from Iran and other “rogue” nations. And until last week so too had the Polish government, but recent pronouncements by President Kaczyński call into question these earlier claims. According to the Polish President, the missile defense treaty strengthens the US obligation to defend Poland in the event of an attack from presumably anywhere, not only based upon NATO membership, but also now in order to defend the missile interceptors themselves. 

The Russians have in turn charged that the missile defense shield is in fact intended to diminish its own nuclear deterrent. And most troubling have threatened to reposition some of their nuclear warheads to target Poland. 

Despite claims to the contrary, it would appear that at least for the Poles the Russian incursion into Georgia provided the missing motivation to conclude the drawn out negotiations with the US administration and sign the missile defense treaty. 

Only time will tell what will be the long term political impact of the missile defense shield on relations between Poland and Russia, not to mention between Russia and the EU as a whole. If the rhetoric on all sides doesn’t begin to tone down, we could very well find ourselves in a new arms race.

-- Paul B. Fogo

Last month, the Irish electorate derailed what was supposed to be a rubber stamp approval of the new “Reform Treaty” following defeat of the EU Constitution more than two years earlier at the hands of the French and Dutch voters. Not to risk the same fate as the draft Constitution two years earlier, each member state (with the notable exception of Ireland) agreed not to submit ratification of the Reform Treaty to their electorates, but rather to leave such approval to their respective governments. The Irish, however, were required to submit the Reform Treaty to public vote due to the requirements of the Irish Constitution. 

Now that the ratification process has had a monkey wrench thrown into it by the Irish rejection of the Reform Treaty, some other EU member states who have not yet ratified the Reform Treaty are having second thoughts. The Polish government has ratified the Reform Treaty; however, President Kaczyński has publicly announced that he no longer sees a rush to actually sign off on the ratification. After all, what is the point if all member states must ratify the Reform Treaty in order for it to become binding law, and Ireland has already said no?

Last week, President Kaczyński met with French President Sarkozy. After their meeting the Polish President announced that he would not be an obstacle to ratification of the Reform Treaty, and that he would sign off on the Reform Treaty “at the appropriate time” after consulting with other leaders. I have no idea what he meant by “at the appropriate time”. Nor do most commentators understand what the Polish President hopes to gain by delaying signing. At least in Poland recent polls show that more than 70 percent of the population supports ratification of the Reform Treaty. So the question needs to be asked: What is our President waiting for? Less anyone forgets, this is the same President who signed the Reform Treaty last December on behalf of Poland. And now he is hesitating to ratify the same Reform Treaty into law? Why?

Paul B. Fogo

While generally upbeat and not overly cynical, as lawyers go, Paul and I allow ourselves the occasional rant, especially when we write a year-end Christmas legislative wish-list for the WBJ. Usually, the real property mess in Poland ends up on that list in one way or another. If it's not lack of zoning plans, it's the lack of a re-privatization law or some variance on these themes. Last year, the Law on Large Scale Retail Facilities made the top of our real estate worry list. The Law effectively ground to a halt all plans of development of new stores, except for small corner stores of less than 400 square meters.

For larger retailers, Christmas came in July this year. On July 8, 2008, The Constitutional Tribunal declared the Law to be unconstitutional.

Whether or not you believe that Poland should protect small mom-and-pop shops, the Law was not a solution to Poland’s growing pains. It was, however, another example of a pet political project enacted, but never implemented. Although the Law came into effect last September, no implementing regulations were ever enacted. Thus, larger retail development plans found themselves in a vacuum for nearly a year. Despite the shut-down on expansion and new development, the Law did keep existing large-scale retailers busy as they had to re-certify their existing stores under the Law to keep them operating.

Well, my own holiday in July is fast approaching. I’m off to visit family in the Wolverine State and the Nutmeg State. I'll be back in mid-August.