In The Debrief, Practice Leaders across CEE share updates on recent and upcoming legislation, consider the impact of recent court decisions, showcase landmark projects, and keep our readers apprised of the latest developments impacting their respective practice areas.
This House – Reached an Accord
Peterka & Partners Partner Adela Krbcova draws attention to the updates in the labor legislation. “On March 7, 2025, the Chamber of Deputies of the Czech Parliament approved an amendment to the Czech Labor Code, known as the ‘Flexi Amendment,’” she reports, noting that while “dismissal without cause was not adopted,” still, “there are mechanisms that should make the termination procedure faster.” Krbcova adds that the amendment also “provides better protection for parents and caregivers. It also tends to reduce the administrative burden on employers. The proposal includes significant changes to unemployment allowances and requalification as well.” These, and some other changes, according to Krbcova, “are expected to come into effect on June or July 1, if there are no further delays in the Senate or in the finalization of the legislative process.”
As for Poland, Linklaters Warsaw Head of TMT/IP Szymon Sienkiewicz highlights amendments to the TMT law. “On February 12, 2025, the government released a new amendment to the Act on the National Cybersecurity System aiming to implement the NIS2 Directive in Poland,” Sienkiewicz notes. “The most important changes affect public entities with updated surveillance measures. Furthermore, rules governing joint duties among public entities have been clarified. Regarding surveillance measures, rules for application and issuing decisions have undergone changes, and maximum financial penalties for managers have been reduced.”
Additionally, Sienkiewicz says, “guidelines from the Polish Personal Data Protection Office regarding personal data breaches were updated in February. According to these guidelines, all incidents posing any risk level must be reported to the Polish privacy regulator. This strict approach diverges from broader European risk assessment frameworks and places demand on businesses operating in Poland to promptly refine their compliance strategies due to the increased potential for incident reporting.”
In Hungary, according to VJT & Partners Partner Endre Varady, AI and cybersecurity take center stage. “Hungary’s TMT sector has seen major developments in AI and cybersecurity over the past month, shaping both regulation and business strategy,” he says. “A long-awaited milestone was the introduction of the cybersecurity audit decree, providing businesses with clarity on compliance. Companies can now finalize agreements with auditors, set audit dates, and understand the scope.” However, Varady points to the remaining key challenge of how thousands of businesses will complete audits by the end of 2025. “Given past flexibility, the regulator may introduce a grace period, though the law mandates full compliance, but it remains to be seen.”
This House – Under Review
Wolf Theiss Poland Associate Zofia Zarebska reports that “the Polish Sejm has already begun the legislative process to implement the Pay Transparency Directive. However, the proposed amendments to the Labor Code have sparked considerable debate, raising concerns among both employees’ and employers’ representatives.” A major issue she says, “is the ambiguous wording of several key provisions, particularly the definition of ‘work of equal value.’ This term is central to determining employers’ obligations and employees’ rights under the proposed changes.”
The application of work of equal value, according to Zarebska has so far been minimal. “Under the current legal framework, employees are entitled to equal pay for equal work or work of equal value,” she notes. “In practice, however, legal challenges based on this principle have been rare. This is largely due to the difficulty of comparing different types of work and the lack of clarity for employees on whether their roles qualify as being of equal value.”
The new legislation “aims to change this by granting employees access to information about both their own wages and the average pay levels within their organization, broken down by gender, for categories of employees performing the same work or work of equal value,” Zarebska says. “As a result, employers will be required to assess which roles within their workforce are of equal value.” The amendments, however, “offer little guidance on how these assessments should be carried out or which positions should be classified as equivalent,” she adds. “This challenge is further complicated by Article 4(2) of the directive, which mandates the use of analytical tools or methods to assist in evaluating and comparing the value of work. These tools should enable employers and social partners to develop gender-neutral job evaluation and classification systems, ensuring pay structures are free from discrimination.” With the directive requiring full implementation by June 7, 2026, “it is likely that additional legislation will be necessary to address these gaps and provide clear guidelines for employers,” Zarebska concludes.
This House – The Latest Draft
According to Nestor Nestor Diculescu Kingston Petersen Partner and Head of the Competition Area Anca Diaconu, Romania’s draft FDI Guidelines was a major recent update. “In a significant step toward enhancing regulatory transparency, Romania has unveiled draft guidelines that seek to refine critical aspects of the FDI screening framework,” she notes. “While the initiative signals a push for a more predictable approach, it does not resolve all ambiguities — leaving investors with critical gaps to navigate as scrutiny intensifies.”
A central aspect of the guidelines, according to Diaconu, “is the formalization of investment value computation. The EUR 2 million notification threshold now explicitly accounts for all funds committed by an investor, encompassing both cash/non-cash consideration, tangible/intangible assets, shares/ownership transfers, debt remission, compensation, services, or any other in-kind consideration. Notably, the valuation of share acquisitions is based on the price paid. In case of a share capital increase not implying share transfers, the investment value is the total amount of the contribution (both the nominal value of the subscribed shares and issue premium).” As to all other investments not involving payment of a price, “the value is ascertained as the market value of the acquired shares/assets, determined based on the acquirer’s own valuation,” she says. Additionally, “where an investment forms part of a broader multi-jurisdictional transaction without an explicitly allocated price for the Romanian leg, valuation will be based on parties’ own assessments,” Diaconu emphasizes. “Absent such allocation, the total value of the multi-jurisdictional transaction will be considered.”
Beyond valuation, Diaconu points out that “the guidelines also confirm that the concept of ‘control’ is consistent with its definition under merger control rules but remain silent on one of the regime’s more complex elements – the test of ‘lasting and direct links’ or ‘effective participation in the management’ remains open to interpretation.” She adds that “for investors, the guidelines do not eliminate uncertainty altogether. Lack of clarity around key concepts means that assessing potential exposure will remain a crucial exercise in mitigating risks.”
Greenberg Traurig Partner Agnieszka Stankiewicz draws attention to the new mortgage loan policy in Poland, announced by the government on February 13, 2025. “During the parliamentary elections in 2023, the current ruling parties promised to implement zero-interest mortgage loans to replace another low-interest (2%) mortgage loan program,” she notes. “Both programs were generally believed to benefit developers and banks by stimulating house prices and making it more attractive to finance housing via banks. In the run-up to the presidential elections to be held in May and June this year, the government has done an about-face and decided to invest in social and low-rent housing.” Based on the new governmental program, Stankiewicz says, “in 2025, municipalities will receive PLN 2.5 billion in funding for the construction of municipal housing and for cheap rentals – according to the draft bill adopted by the government. By 2030, the annual budget program implementation is to increase to PLN 10 billion.”
Sienkiewicz reports that the work on the draft Polish law concerning AI systems is progressing steadily. “On February 10, 2025, the Ministry of Digital Affairs published an amended draft law aimed at establishing a framework for overseeing AI systems in Poland,” he says. “The main changes involve a new market surveillance authority, which will conduct oversight primarily remotely. Additionally, it regulates individual opinions (formerly known as interpretations) and introduces mechanisms to ease sanctions in exceptional cases.” Of particular interest, according to Sienkiewicz, “is the introduction of regulatory sandboxes, offering SMEs cost-free environments to test innovative AI technologies. The presented draft has been referred for further governmental work and public consultations.”
DLA Piper Hungary ESG Practice Coordinator Dora Dranovits reports, “the EU Commission’s Omnibus package, published on February 26,” is likely “the most important development in the ESG legal practice in the last month.” According to the Commission, “the package aims to reduce the administrative burdens of European companies and thus enhance their competitiveness on the global market. In both the Draghi Report and the Budapest Declaration, extensive administrative tasks were named as one of the main obstacles to European competitiveness, and the EU pledged to reduce the administrative obligations of companies by 25% in the first half of 2025,” she continues. “This pledge manifested in the Omnibus proposal that cuts back the scope of the reporting obligations under the CSRD and EU Taxonomy by a staggering 80% and also narrows the companies’ sustainability due diligence obligations to their Tier 1 suppliers, among other changes.”
Dranovits adds that “the proposed changes are welcomed by some industry players, but are heavily criticized by sustainability professionals, NGOs, some Member States, and companies. Critics claim that the Omnibus package is a step (or more like leaps) toward deregulation in the field of ESG reporting, taken without underlying impact studies and other preparatory measures that should be taken into consideration when proposing changes on such a scale.” Dranovits further notes that “the package now will go through the usual legislative process, however, the delay in the effect of the CSRD by 2 years may be fast-tracked, clearing the air for companies that fall within its scope by January 1 this year.”
The Verdict
Stankiewicz also draws attention to the recent court judgments in Poland. “Since the autumn of 2022, Polish banks have been facing challenges regarding their WIBOR-based variable interest rate loan agreements due to the alleged violation of a number of laws, ranging from the Polish Civil Code or the Mortgage Act to EU directives,” she notes. “At the end of last year, there were over 1,000 cases against banks and the number is growing. The most far-reaching demand being made is to invalidate loan agreements, which, if upheld by the courts, would be a huge challenge for the entire banking sector.” According to Stankiewicz, “banks had been confident that such outcome was highly unlikely but at the end of January 2025, the first court judgment declared a WIBOR-based loan invalid. The court annulled the agreement and ordered payment of a substantial amount of money plus interest to borrowers. The judgment is not yet final and most certainly will be appealed by the bank concerned. Although the banking sector is trying to keep a cool head about this new development, the financial consequences of invalidating WIBOR-based loans would be a disaster for banks of a magnitude greater than in the case of Swiss franc loans, which have been plaguing the Polish banking sector for the last five years (on a sector-wide basis, the total cost of Swiss franc loans is already approaching PLN 100 billion).”
In the Works
According to CMS Sofia Managing Partner Kostadin Sirleshtov, “finally, Bulgaria has a stable government, and the just-published Governmental Strategy puts a special focus on the energy sector.” The confidence of the industry resulted in “Bulgaria’s government approving the transfer of a 50% stake in the Han Asparuh offshore block from OMV Offshore Bulgaria, part of Romanian oil and gas group OMV Petrom, to NewMed Energy Balkan, a subsidiary of Israel’s NewMed Energy,” he notes. Furthermore, “United Group, Southeast Europe’s leading telecommunications and media powerhouse, has taken a major step into the production of green electricity with an initial EUR 120 million investment in Bulgaria in both solar and wind. By 2027, these projects will supply 160% of the electricity needed for the Group’s Bulgarian operations. In March 2025, the Sinitovo solar project reached its financial close thus adding an additional 50-megawatt peak to the Bulgarian electricity grid after 15 years in development. Similarly, Chint/Astronergy put into operation its first merchant project Boychinovci.”
In Serbia, “March 2025 was marked by the announcement of the results of the second round of auctions for the market premium, launched by the Ministry of Mining and Energy at the end of November 2024,” according to JPM & Partners Senior Partner Jelena Gazivoda. She adds that “investors submitted applications for 41 projects (seven applications for wind power plant projects, of which five projects achieved quotas, and 34 applications for solar power plant projects, of which five projects achieved quotas).” The offered capacity of 424.8-megawatt for solar and wind power plants was significantly exceeded.” Gazivoda adds that “the total capacity of the power plants that received incentives is 645-megawatt, and the total planned investment value is EUR 782 million, which all confirms the high competitiveness in the sector of renewable energy sources in the Republic of Serbia and its potential for further growth.”
Regulators Weigh In
“Since the last year and a half, we have seen a renewed increase in the Antimonopoly Committee of Ukraine’s (AMCU) attention to the pharmaceutical markets,” Redcliffe Partners Partner Yuriy Terentyev highlights. “The first signals came in the second half of 2023 when smaller regional distributors began voicing accusations regarding market foreclosure by the two dominant wholesale distributors, as well as by the leading national pharmacy chains. The AMCU initially used its advocacy tools to improve the competitive environment across all levels of distribution. This was shortly followed by the initiation of a case concerning the alleged abuse of dominance by the two dominant wholesale distributors in the middle of 2024.”
“In March 2025, the pharmaceutical market was shocked by intense actions at the highest political levels in Ukraine, including initiatives from the President, Verkhovna Rada, and the National Security and Defence Council,” Terentyev reports. “This resulted in the approval of legislation that introduced revolutionary changes to the pharmaceutical market, moving it toward more prescriptive regulation. This included controversial provisions limiting the markups for pharmaceuticals and market shares for distributors.” He adds that “the AMCU is investigating an abuse of dominance case against the two major distributors, with results possibly emerging as early as mid-2025. It is not yet clear what consequences the current case may bring in terms of defining the unlawful behavior and the amount of the fine, nor whether it will open the door for private damages claims.” Finally, Terentyev says, “we also anticipate increased scrutiny from the authorities toward pharmacy chains, as certain business practices – such as requests for significant marketing contributions – have sparked negative reactions from market participants.”
Varady notes that “AI is no longer just a buzzword in Hungary – it is transforming industries.” Notably, he says, “the government has appointed Laszlo Palkovics as the Government Commissioner for coordinating AI development and legislation, opening opportunities for AI tenders, best-practice sharing, and strategic planning.” Market sources have also hinted at a revision of Hungary’s AI Strategy, with an updated version expected soon, Varady notes.
According to him, regulatory compliance is also in focus. The EU AI Act’s February deadline requires businesses to ensure AI literacy and eliminate prohibited AI practices. Although Hungary has not yet appointed an AI regulator, one is expected by August 2025, meaning enforcement of these new obligations could begin this year.”
At the same time, “despite limited local guidance, the EU Commission’s AI guidelines offer valuable insights into prohibited practices and system classification,” Varady reports. “One notable clarification is that financial predictive models based on simple rule-based statistical methods — common in the banking and insurance industries — do not fall under the AI Act, as they lack autonomous learning capabilities. This distinction is crucial for financial institutions and other businesses relying on predictive analytics, as it helps determine whether compliance obligations apply to their systems.”
According to Sirleshtov, Bulgaria’s government aims for major investments in energy interconnectivity, new nuclear and renewable energy capacities, and storage. “The process of the selection of new members of the Energy and Water Regulatory Commission is to be completed by the Parliament with all candidates demonstrating high expectations and moral standards,” he says. “The new Government appointed new CEOs of the National Energy Company and the Independent Bulgarian Electricity Exchange.”
MGG Law Office Associate Carla Busic says that in Croatia, “as part of the collaboration between the Croatian State Intellectual Property Office (SIPO) and the European Intellectual Property Office (EUIPO), in March 2025, the SIPO appointed certified IP Scan and IP Scan Enforcement experts.” According to her, “appointed experts were chosen mainly from the trademark and patent representatives list and were required to go through the EUIPO’s training.”
“IP Scan essentially represents IP pre-diagnostic service. It refers to professional support for small and medium-sized enterprises that, based on a review of the company’s business model, products, services, and growth plans, recommend which intangible assets to protect and how intellectual property can help the business grow,” Busic explains. “IP Scan Enforcement refers to the support of small and medium-sized enterprises with regard to intellectual property rights infringement.”
“Both services are supported by the EUIPO’s SME fund, enabling users to get up to 90% of costs reimbursed,” Busic highlights. “With the inclusion of IP representatives and representatives in the EUIPO’s IP Scan and IP Scan Enforcement services, the EUIPO, and the SIPO jointly endeavor to raise awareness of intellectual property rights and their importance within business.” She adds that “this initiative may be particularly exciting for the technology and media sector in Croatia in which there seems to still be lack of awareness and strategy on how to protect and utilize potential and existing intellectual property rights within their businesses.”
Pekic Law Office Partner Stefan Pekic highlights that in terms of Serbia’s corporate/M&A, “the regulator is striving to expand ways for corporate financing,” and “issuing corporate bonds by private companies is becoming more attainable.” In this vein, Pekic reports that, a few weeks ago, “Elixir Group was approved by the regulator to issue the first green corporate bonds in Serbia. Such financing will help this company build a factory to reduce its ecological footprint. For decades, corporate finances in Serbia relied mainly on credits from commercial banks, and broadening the sources of financing will improve the liquidity of the market and accelerate development and growth.”
In Related News
Gazivoda notes that “February 27, 2025, was the announced date of entry into force of the sanctions against NIS introduced by the Office of Foreign Assets Control at the beginning of January 2025. Immediately before the deadline, Gazprom Neft transferred 5.15 % of its shares to its parent company Gazprom, formally fulfilling the condition that Gazprom Neft’s ownership was reduced to less than 50% (Gazprom Neft currently holds 44.85% shares).” In the meantime, she says, “the entry into force of the sanctions against the NIS was postponed for one month, i.e. until March 28, 2025. Since the application of the sanctions was only postponed, there is still a huge concern about the impact of the sanctions against the NIS on the entire economy of the Republic of Serbia. The solution to this issue is complex, it requires a long time and the cooperation of the main decision-makers, and the deadline is running out again (March 28) — thus, the end of March brings with it a new concern and a new expectation regarding an additional extension of the deadline in which a sustainable solution could be expected to be found.”
Finally, Stankiewicz says that “on the commercial banking front, there is a lot of interest from alternative credit providers in getting a foot in the door for Poland. Based on a Strategy& report, Poland’s private debt market could reach PLN 9.2 billion in a pessimistic scenario and PLN 16.9 billion in an optimistic scenario by 2030, with a baseline projection of PLN 14.3 billion.” She adds that “bank finance is still readily available in Poland, however, some lenders will not finance development or construction loans and in other cases, the leverage level offered by banks may not be satisfactory to borrowers. As a result, an increasing number of alternative credit providers are scouting Poland to understand the regulatory framework for senior and junior lending. This has yet to translate into spectacular transactions, but there does seem to be both supply and demand to activate that gap.”
This article was originally published in Issue 12.2 of the CEE Legal Matters Magazine.