DKF and Wierzbowski Eversheds defence and security networking meeting: discussion of the new Offset Act

On 30 June–1 July 2014, together with the Deutsches Kompensations Forum, we held a defence and security networking meeting in Warsaw. On 26 June 2014, the Polish Parliament adopted a new Offset Act (the Act on Certain Agreements Concluded in Connection with Contracts Essential for National Security), and thus the timing of the conference could not have been better. And just as our conference started, the Polish Armaments Inspectorate announced that Raytheon and MBDA had qualified for the final stage of the Midrange Antiaircraft and Antimissile Air Defence System procurement (the Vistula Program), worth about €6bn (£4.75bn). The conference was an ideal place to congratulate the successful competitors. In my reflections, I would like to share my thoughts on the main topics that raised concerns about the new Offset Act: application, scope of offset, performance security and penalties.

The new Offset Act was signed into law by the president of Poland on 7 July 2014 and will come into force 14 days after publication in the Journal of Laws. It is expected that this will happen within the next two months. Consequently, the Vistula Program may be the first where the new Offset Act will be applicable. Under article 34 of the new Offset Act, in the case of offset agreements concluded before the new Offset Act enters into force, the old Offset Act (the Act on Certain Compensating Agreements Concluded in Connection with Supply Agreements for the Needs of Defence and State Security of 10 September 1999) will continue to apply. The old Offset Act will also apply to amendments of offset agreements concluded before the new Offset Act enters into force but amended after the new Offset Act enters into force. The old Offset Act will also apply to procedures for conclusion of an offset agreement commenced before the new Offset Act enters into force.

Consequently, the new Offset Act will apply only to offset agreements concluded under proceedings commenced after the new Offset Act enters into force…

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