The anti-TVN act is worrying investors, writes the Bloomberg agency. As indicated, the controversial draft amendment to the media law is to be dealt with by MPs next week, but “no matter what happens, the damage may already be done.”
Sejm’s Culture and Media Committee during the session on July 27 adopted with amendments the draft amendment to the media law. The draft will now go to plenary sessions of the Sejm. The next meeting of the lower house is scheduled for Wednesday 11 August.
“Populist power in Poland is no stranger to making enemies, be it among judges, migrants, sexual minorities or the European Union. Its fight against Discovery may be more difficult to overlook by investors,” notes Bloomberg.
As the agency points out, “the ruling party has prepared a media law which, according to Prime Minister Mateusz Morawiecki, is needed to prevent Russian and Chinese companies from entering the market.” “However, the regulations are aimed at one company: the American owner of the Polish broadcaster TVN. The regulator has been refusing to extend the license for the TVN24 news channel for over a year,” writes Bloomberg. The agency adds that in connection with the new regulations, questions arise as to whether there has been a change in the approach to investors in Poland, which the authorities usually looked for in order to create new jobs.
A high-ranking US State Department official – cited by Bloomberg – said the media law, if implemented, would influence future decisions by US investors. As recalled, on Wednesday Republican and Democratic US senators issued a joint statement on the lex anti-TVN, which criticized the Polish government for actions “aimed at limiting the independence of the media and undermining one of the largest American investments in the country.” As they emphasized, “the decision to implement such a law may have negative consequences for defense, business and trade relations.”
American investments in Poland
Meanwhile, Poland – as Bloomberg writes – “successfully avoids the enforcement of EU courts’ judgments with which it disagrees, violating the pan-European legal system that has helped it attract $ 200 billion in foreign direct investment since joining the EU in 2004”. The deputy head of the European Commission, Vera Jourova, said last month that foreign companies fear legal reforms in Poland.
– For an investor, the most important thing is legal stability and dialogue – says Krzysztof Krawczyk, who manages the Polish branch of CVC Capital, one of the world’s leading private equity funds, in an interview with the agency. – You should talk to investors, not treat them as enemies. Unfortunately, we often experience it ourselves – adds Krawczyk.
Bloomberg recalls that Poland and Hungary often clashed with the EU over the independence of the judiciary, media and democratic rule of law. But both countries have so far remained a magnet for investment, from German car makers to global banks and tech companies.
“For Morawiecki and the ruling Law and Justice party, the law is another proof that, after decades of passive adoption of international order, the country is finally defending its rights. Critics claim that TVN24 has repeatedly exposed corruption scandals at various levels of government. that Russian and Chinese entities would strive for the Polish market, “Bloomberg points out.
Discovery acquired TVN through the acquisition of Scripps Networks Interactive in 2015. According to the data of the American Chamber of Commerce in Warsaw, it is the third largest American investment in Poland.
About the situation in Poland spoke recently in an interview with “Variety” magazine Jean-Briac Perrette, President and CEO of Discovery Networks International. He stressed that the proposed changes to Polish law undermine the business interests of Discovery, the owner of TVN, but also “essentially aim at destabilizing the country for all companies”.
The rule of law is under threat
Bloomberg points out that Poland’s reputation as a place where investors can get a fair trial is at stake. – Not only is this questioned now, but the impact on business is growing because the role of the state in the economy has grown since Law and Justice took power in 2015 – said Wojciech Kozłowski, partner at Dentons in Warsaw.
“Foreign investors often have disputes with various state regulators or state-owned companies,” he said. “No investor goes into details of who said what, but they understand the simple message coming from the Court of Justice of the EU – the impartiality of legal protection in Poland is at risk.”
United Right divided
The agency points out that the proposed changes also have their critics within the ruling coalition itself. The words of Jarosław Gowin, Deputy Prime Minister and Minister of Development, Labor and Technology, were recalled, who pointed out that if the act was adopted, it would “negatively affect the investment climate in Poland”.
“Certainly, the Biden administration is watching this matter very carefully. It expresses this many times and it is not necessary to talk to representatives of the American government to know that the adoption of the law in this form will not have negative consequences for Polish-American relations, and, consequently, also for the security of Poland – Gowin said on Wednesday in the “Tak jest” program on TVN24.
Anti-TVN project and license for TVN24
On July 7, a group of Law and Justice deputies submitted to the Sejm a draft amendment to the Broadcasting Act. “The will of the legislator is that companies based in Poland cannot be controlled by entities outside the European Economic Area” – it was written in the justification. Commentators agree that the changes are aimed at TVN’s independence.
TVN24 is still waiting for the National Broadcasting Council to extend its license, which expires on September 26. An application for its extension was submitted in February 2020. KRRiT claims that the problem lies in the “ownership situation” of the TVN group.
The station’s management wrote in a statement that in 2015 the National Broadcasting Council accepted the entry of American capital into TVN. Since 2016 – under the same ownership conditions – KRRiT has already issued licenses for TVN24 BiS, TTV and TVN International West. Two votes in the National Broadcasting Council (KRRiT) have been held in recent days regarding the license for TVN24. However, no decisions were made.
TVN is owned by Discovery through its subsidiary Polish Television Holding BV in the Netherlands, and thus belonging to the European Economic Area.
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