As collective entities, small and medium-sized entities will not be criminally liable

The Act on the liability of collective entities for acts prohibited under penalty of October 28, 2002 defines the rules of liability of legal persons and organizational units without legal personality, which are granted legal capacity by separate provisions, with the exception of the State Treasury, as well as local government units and their associations.

The Ministry of Justice conducted an analysis of the effectiveness of the existing regulations and stated that their effectiveness is negligible, and the number of cases against collective entities is small. The insignificant amount of penalties imposed under this act proves that its provisions are applied mainly to small collective entities, which led the ministry to conclude that the model of liability of collective entities adopted in Poland does not work properly.

The authors of the draft amendment propose the following changes:

• elimination of the so-called a preliminary ruling, i.e. the prior conviction of a natural person as a condition of liability of a collective entity. Proceedings against such an entity may be conducted independently of proceedings against a natural person acting on its behalf;
• it will be possible to hold the collective entity liable even if the identity of the natural person who perpetrated the prohibited act has not been determined;
• the persons for the actions of which this entity will be responsible will include, first of all:
• members of the bodies of a collective entity, if their actions do not constitute the actions of the body itself,
• proxies, including commercial proxies, and
• persons who are employees of a collective entity

on the other hand, the condition of liability for their actions will be the obtaining by the collective entity of an advantage, even if it is non-pecuniary, or the possibility of obtaining it;

• exemption from liability of a collective entity is possible if, despite the occurrence of irregularities, all the obligated bodies and persons authorized to act on behalf of or in the interest of this entity have exercised due diligence required in the given circumstances, in the organization of this entity and in the supervision of this activity;
• small and medium-sized enterprises are to be eliminated from the subjective scope of the act, provided that they meet at least one of the following conditions:

1. have less than 500 employees in at least one of the last two financial years, or
2. have an annual net turnover from the sale of goods, products and services as well as from financial operations not exceeding the PLN equivalent of EUR 100 million;

• fines imposed on entities pursuant to the provisions of the Act will cease to be related to the amount of the entity’s income. At the same time, it is planned to raise the lower penalty threshold to PLN 10,000 and the upper threshold to PLN 30,000,000;
• the principle of liability for each crime and fiscal offense will be introduced instead of the previous catalog of prohibited acts that may constitute the basis for liability of collective entities;
• the draft does not provide for conducting preparatory proceedings regarding the liability of a collective entity. Evidence proceedings in the case of the liability of the collective entity will be conducted in court without preliminary preliminary proceedings.

The planned date of approval of the project by the Council of Ministers is the 3^rd quarter of 2022.

Our lawyers specializing in Polish economic criminal law will advise you on the criminal liability of collective entities while conducting business in Poland.

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