Forfeiture of an enterprise in criminal proceedings
Grounds for applying enterprise forfeiture
Pursuant to the provisions of Polish law, the forfeiture of an enterprise may be ordered only if all of the following conditions are met:
- conviction of the perpetrator for a crime,
- the perpetrator obtained a significant financial benefit from this crime, even indirectly,
- using the enterprise to commit a crime or conceal benefits obtained from it.
If the above conditions are met, the court may order:
- forfeiture of the enterprise if it is the property of a convicted perpetrator of a crime,
- in other cases – forfeiture of the equivalent of the enterprise.
If there is joint ownership of an enterprise by several persons, forfeiture is ordered taking into account the will and awareness of each of the co-owners and within their limits.
The order of forfeiture of an enterprise is, in principle, admissible for any crime, because the regulations do not limit the list of crimes in which forfeiture is possible.
There is no doubt, however, that in practice the forfeiture of an enterprise is ordered in cases of serious crimes, which is indicated by the requirement to obtain material benefits from the crime of significant value (i.e. exceeding PLN 200,000) and the fact that the enterprise was used to commit the crime or conceal the obtained benefits from it. Legal literature indicates that the forfeiture of an enterprise may be used in particular in the event of a conviction for fraud, money laundering or an offense against the fiscal interests of the State Treasury.
The condition for obtaining a financial benefit is subject to wide interpretation. The prevailing view in the jurisprudence is that it may be obtained by the perpetrator directly or indirectly, and it constitutes any gain of property for himself or another person or avoidance of loss therein, except for situations where such a benefit is due to the perpetrator or another person in accordance with the legal bond existing at the time of the crime. The financial benefit also includes income and benefits obtained from the enterprise.
Exclusion of enterprise forfeiture
The provisions of Polish law provide for several situations in which the forfeiture of an enterprise is excluded.
The forfeiture of an enterprise shall not be ordered if:
- it would be disproportionate to the gravity of the crime committed, the degree of culpability of the accused or the motivation and behavior of the owner of the enterprise,
- if the damage caused by the crime or the value of the hidden benefit is not significant considering the size of the enterprise’s operations.
Moreover, the court may refrain from ordering the forfeiture of the enterprise also in other, particularly justified cases, when it would be disproportionately burdensome for the owner of the enterprise.
The forfeiture of an enterprise is a highly painful legal instrument that can only be ordered by a court in the event of a conviction for a crime from which the perpetrator, even indirectly, obtained a material benefit of a significant value (over PLN 200,000). Forfeiture may be ordered only if it is proven that the enterprise was used to commit a crime or conceal profits obtained from it. Forfeiture may be applied in the form of forfeiture of the enterprise, i.e. depriving the perpetrator of the crime of the ownership title to the enterprise, or in the form of forfeiture of the monetary equivalent of the enterprise, when it is not the property of the perpetrator but of third parties.