Criminal law and white collar crime in Poland

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Michał Puk
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Criminal law regulation in Poland

The fundamental legal acts which regulate Polish criminal law and white collar crime are as follows:

  1. Polish Penal Code of 6th June, 1997 (Journal of laws of 2019 item 1950) (“PC”) which regulates the criminal liability of the individuals;
  2. Act on Liability of Collective Entities for Acts Prohibited Under Punishment of 28th October, 2002 (Journal of laws of 2020 item 358) (“ALCE”) which regulates the corporate, secondary liability of the legal persons for crimes committed by their representatives;
  3. Polish Fiscal Penal Code of 10th September, 1999 (Journal of laws of 2020, item 19) (“FPC”) which regulates the criminal liability for the fiscal crimes and penal proceedings on fiscal crimes,
  4. Polish Penal Proceedings Code of 6th June, 1997 (Journal of laws of 2020, item 30) (“PPC”) which regulates the penal proceedings on crimes .

It is also worth mentioning on Code of Petty Crimes of 20th May, 1971 (Journal of laws of 2019, item 821) which regulates a criminal liability for petty crimes and Code on Proceedings in Petty Crime Cases of 24th August, 2001 (Journal of laws 2020, item 729) which regulates a proceedings in cases regarding petty crimes. The last two acts are not elaborated herein as potential petty crimes usually do not entail significant risks for the company and its management board with regards to the company’s business activity.

Personal and corporate criminal liability

One may distinguish the two types of the criminal liability under Polish law

  1. personal criminal liability for the act prohibited under the terms determined in the PC regulations and FPC regulations;
  2. corporate criminal liability for the act prohibited committed by representatives of legal persons under the terms determined in the ALCE regulations.

Conditions of criminal liability in Poland

Basically, under the Polish law the act prohibited can be committed only by natural person. The criminal liability shall be borne by the natural person if:

  1. its behaviour has met the description of the act prohibited as defined by the law in force at the time of the act commission and,
  2. the social danger degree of a prohibited act is more than insignificant and,
  3. the guilt can be attributed to the perpetrator at the time when act is committed and,
  4. no circumstance excluding the criminal liability occur, for instance: right of self-defense, state of necessity, permitted experiment, excused mistake about circumstance constituting the feature of a prohibited act, insanity.

If all above conditions are met, the act committed is defined as the crime.

Summary of elements constituting a crime:

Condition 1 Prohibited act by individual person
Condition 2 Act which is socially detrimental
Condition 3 Guilt can be attributed
Condition 4 No circumstances excluding liability

The vast majority of prohibited acts can only be committed intentionally. A prohibited act is committed intentionally, if the perpetrator intends to commit it, that is, he or she wants to commit it (so-called direct intention) or by anticipating the possibility of committing it, he or she agrees to it (so-called possible intention).

However, some prohibited acts may also be committed unintentionally. The Criminal Code stipulates that a prohibited act is committed unintentionally, if the perpetrator has no intention of committing it, but commits it as a result of failure to exercise the caution required in the given circumstances, even though the possibility of committing this act was envisaged or foreseen.

As a rule, criminal liability may be incurred by a person who commits a prohibited act after the age of 17. In the case of certain prohibited acts of particular gravity, a minor may incur criminal liability after the age of 15. However, this applies to prohibited acts of a criminal nature, not related to running a business.

Territorial rule

Polish criminal law applies to a perpetrator who commits a prohibited act in the Republic of Poland, or on a Polish vessel or aircraft, unless the Republic of Poland is party to an international agreement stating otherwise. Under the PC regulations the place of commission of the prohibited act is defined very widely. Namely, prohibited act is deemed to have been committed at the place where the perpetrator acts or fails to perform an action that the perpetrator is obliged to perform, or where the results of the prohibited act take place, or are intended by the perpetrator to take place. In practical terms, the Polish criminal law shall apply also to the acts performed in different countries, but which results take place or as per intention of the perpetrator should have taken a place in Poland.

Additionally, in certain circumstances, the Polish citizens and foreigners can be held criminally liable for the acts prohibited that are committed abroad. This refers in particular to the fiscal crimes against significant financial interest of the Polish State and European Union.

Forms of committing a crime in Poland

Attempt and preparation

Criminal liability may be held not only by the perpetrator of the prohibited act that has been committed. The Penal Code and the Fiscal Penal Code also provide for liability to a person who, with the intention of committing a prohibited act, directly aims to commit a prohibited act, but does not take place (e.g. the contractor of the perpetrator of the extortion crime resigns at the last minute from signing a contract or sending goods for which the perpetrator from the beginning he was not going to pay).

An punishable attempt also takes place when the perpetrator is not aware that the perpetration is impossible due to the lack of an object suitable for committing a prohibited act on him or due to the use of an agent unsuitable for committing a prohibited act (e.g. the perpetrator performs false, worthless theft) money).

If the perpetrator voluntarily withdraws from the prohibited act or prevents the consequences of the prohibited act after performing the prohibited act, he or she will not be held criminally liable for the attempted act.

In the case of certain, very serious prohibited acts, the Penal Code also provides for responsibility for preparing to commit a crime. This applies to the prohibited acts clearly specified in the Penal Code. Preparation takes place when the perpetrator, in order to commit a prohibited act, undertakes activities aimed at creating conditions for undertaking activities aimed directly at committing the prohibited act. Examples of preparation for a crime include entering into an agreement with another person, acquiring the resources needed to commit a crime, gathering information or drawing up an action plan.

Typical business-related crimes that make the preparation punishable are:

  1. preparation for forgery of documents;
  2. preparation for counterfeiting money or securities;
  3. prepare to circulate counterfeit money or securities.

The perpetrator of punishable preparation may avoid criminal liability if he or she voluntarily withdrew from it, in particular, destroyed the prepared measures or prevented their use in the future. If the perpetrator entered into an agreement with another person in order to commit a prohibited act, he or she shall not be subject to penalty if he or she has made significant efforts to prevent the act.

Co-operation in committing a crime

Criminal liability under the Penal Code is individual and personal liability. However, this does not exclude the imposition of criminal liability for offenses committed in cooperation with other persons in the form of:

  1. joint misconduct i.e. performing a prohibited act jointly and in agreement by at least two people;
  2. management i.e. directing the execution of an act prohibited by another person;
  3. orders i.e. making use of another person’s dependence on himself by ordering him to perform a prohibited act;
  4. incitement i.e. inducing another person to commit a crime;
  5. aid i.e. intended to facilitate the commission of a prohibited act by another person, in particular by providing tools, means of transport, giving advice and information.

A person cooperating in the commission of a prohibited act may avoid liability if it voluntarily prevented the commission of a prohibited act. If, on the other hand, the cooperating person tried voluntarily to prevent committing the prohibited act, but finally failed to prevent it, the court may apply extraordinary leniency against him.

The above-mentioned forms of committing a crime are characteristic of many crimes committed by management staff or members of company bodies, especially when the prohibited act is performed by a person subordinate to a member of the management board or the director at his order or instigation.

Liability of the company representative for a fiscal / tax / white collar crimes

The FPC provides for criminal liability of legal representative of a company for fiscal crime and fiscal petty crime. This refers to person who on the basis of:

  1. statutory regulations (e.g. the Code of Commercial Companies);
  2. decisions of the competent authority (e.g. appointment by the company’s supervisory board);
  3. contracts (e.g. for employment, orders);
  4. factual activity

deals with economic matters, in particular financial matters of a company. This is called extended liability, e.g. of the president of the company’s management board, as the head of the management board’s work, unless the duties in this regard have been expressly entrusted to another member of the management board.

The so-called extended liability is related to the fact that in description of many fiscal crimes and petty crimes the subject is defined by a collective name (e.g. “taxpayer”, “payer”, “resident”, “importer “). However, criminal liability applies only to natural persons. The extended liability of a representatives allows for the application of criminal liability towards persons dealing with economic matters, in particular financial matters of a legal person (e.g. limited liability company or joint-stock company) or an organizational unit without legal personality (e.g. partnerships). In such situations, a natural person operating in a given economic entity is liable as the perpetrator, if he or she dealt with economic matters, in particular financial matters of the given entity.

Limitation periods for the personal criminal liability

As a rule, the lapse of a certain period of time causes the exclusion of a criminal liability and the perpetrator of a crime shall not be pursued and sentenced for a crime. The Penal Code provides for different limitation periods for crimes prosecuted by public indictment, depending on the seriousness of the act and the amount of the impending penalty. Namely, the criminal liability ceases if the following number of years have passed since a crime was committed:

  1. 30 years when the act constitutes a felony of murder;
  2. 20 years when the act constitutes another felony (i.e. the act is punishable by imprisonment for a period of not less than three years);
  3. 15 years when the act constitutes a misdemeanor punishable by imprisonment exceeding 5 years;
  4. 10 years when the act constitutes misdemeanor punishable by imprisonment exceeding 3 years;
  5. 5 years with regard to other crimes.

On the other hand, the criminal liability for a crime being prosecuted by private prosecution ceases with the lapse of one year from the time when the aggrieved person learned about the perpetrator of the crime, but not later than after 3 years from the time of its commission.

Moreover, in the case of certain crimes to the detriment of minors, the statute of limitations for criminal record may not be imposed before the aggrieved party reaches 30 years of age.

If criminal proceedings are initiated during the limitation period, the limitation period is extended by a further 10 years in the case of crimes prosecuted by public indictment, and in the case of crimes prosecuted by private accusation, the limitation period is extended by 5 years.

Different limitation periods have been provided for fiscal and tax crimes, where the criminal liability shall cease to exist if the following number of years have passed since a fiscal crime was committed:

  1. 5 years when the act constitutes a fiscal crime punishable by a fine, restriction of liberty or penalty of deprivation of liberty not exceeding 3 years;
  2. 10 years when the act constitutes a fiscal crime punishable by imprisonment exceeding 3 years.

In addition, the criminal liability for a fiscal crime resulting in the reduction or exposing to the reduction of public law receivables ceases also when the receivables have expired due to statutory limitation.

The limitation period for a fiscal crime public law receivables begins at the end of the year in which the payment deadline for this receivable expired.

If the perpetrator of a fiscal crime has reduced or has exposed to reduce its customs duty, the limitation period shall start on the day on which the customs debt was incurred. If it is not possible to determine the date on which the customs debt arises, the limitation period for a fiscal crime shall start from the earliest date on which the existence of the customs debt was established.

Voluntary disclosure of a fiscal crime

The perpetrator of a fiscal crime or a fiscal petty crime may avoid criminal liability if, after committing a prohibited act, he or she voluntary discloses the authority appointed for prosecution of the committed crime or petty crime, the relevant circumstances of the act, in particular the persons cooperating in its commission.

If the committed act resulted in non-payment of the required public-law receivables, the perpetrator shall also pay the unpaid receivables within the time limit set by the authorized body.

However, the perpetrator will not avoid criminal liability as a result of voluntary disclosure of the fiscal crime or fiscal petty crime, if the voluntary disclosure has been made:

  1. at the time when the law enforcement authority already had clearly documented information about a fiscal crime or a fiscal petty crime;
  2. after the commencement of an official activity by a law enforcement authority, in particular a search, verification activity or control aimed at revealing a fiscal crime or a fiscal petty crime, unless this activity did not provide grounds for initiating proceedings for this prohibited act.

Moreover, voluntary disclosure of a committed fiscal crime or fiscal petty crime shall not waive the criminal liability of the perpetrator who:

  1. managed the execution of the disclosed offense;
  2. ordered another person to perform the disclosed prohibited act, by taking advantage of the dependence of another person on himself;
  3.  organized a group or association with the aim of committing fiscal crime or directed such a group or association, unless the voluntary disclosure was made with all members of the group or association;
  4. induced another person to commit a fiscal crime or a fiscal petty crime in order to bring proceedings against that person for that crime.

Penalties and other repressive measures for a crime

The Penal Code provides for the following penalties:

Fine the fine is imposed on a daily basis, specifying the number of rates and the amount of one rate; unless the act provides otherwise, the lowest number of rates is 10, and the highest is 540. In the case of some crimes, the act provides for a higher, maximum number of fines, e.g. in the case of money laundering, the maximum number of rates is 3000. The daily rate cannot be lower than PLN 10 nor exceed PLN 2,000. The fine may be imposed as an independent penalty or in addition to the penalty of imprisonment, if the perpetrator has committed the act in order to gain a financial benefit or when a financial benefit was gained. Moreover, a fine may be imposed in the event of conditional suspension of the execution of a custodial sentence
Restriction of liberty as a rule, the penalty of restriction of liberty lasts for the shortest period of one month, and the longest for two years; it is imposed in months and years. The penalty of restriction of liberty consists in the obligation to perform unpaid, controlled work for social purposes or to deduct from 10% to 25% of remuneration for work on a monthly basis for a social purpose indicated by the court. While serving a restriction of liberty, the convicted person may not change the place of permanent residence without the court’s consent and is obliged to provide explanations regarding the course of serving the sentence. Moreover, the court may impose other, additional obligations on the convict, specified in the Criminal Code
Deprivation of liberty imprisonment lasts for the shortest month, the longest for 15 years; it is imposed in months and years. The court may conditionally suspend the execution of the penalty of deprivation of liberty imposed for a period not exceeding one year, if the perpetrator, at the time of committing the crime, was not sentenced to imprisonment and it is sufficient to achieve the goals of the punishment, in particular to prevent the return to the offense. As a rule, the suspension of the execution of the sentence takes place for a probationary period, which is from one to three years and runs from the judgment becoming final. Adjudicating of the penalty of imprisonment with a conditional suspension of its execution is quite common in cases of minor crimes, in particular in the case of minor economic crimes, which are associated with the obligation to redress the damage committed by the crime. In such situations, the convicted person is obliged to redress the damage during the trial period. Otherwise, the court may order the execution of the imprisonment penalty
25 years imprisonment it can be adjudicated for the most serious crimes. In the case of economic crimes, it may be imposed as the maximum penalty for a crime of forgery of invoices with a total value of more than PLN 10,000,000 and for a crime of forgery of money and means of payment
Life imprisonment it can be adjudicated in the case of the most serious crimes of a criminal nature, against peace and humanity, and against the Republic of Poland. It is not adjudicated in cases of an economic nature

The Penal Code also provides for additional measures of repression in the form of the so-called criminal measures, forfeiture and compensation measures. They are imposed in addition to penalties for the committed crime. These measures include:

  1. deprivation of public rights;
  2. ban on holding a specific position, performing a specific profession or conducting a specific business activity;
  3. prohibition of activities related to the upbringing, treatment, education or care of minors;
  4. ban on staying in certain environments or places, contacting certain people, approaching certain people or leaving a certain place of stay without the consent of the court;
  5. ban on entry to a mass event;
  6. ban on access to gaming centers and participation in gambling;
  7. an order to temporarily leave the premises shared with the aggrieved party;
  8. driving ban;
  9. monetary performance for Victim Support Fund and Post Penitentiary Aid;
  10. making the judgment public;
  11. forfeiture of items derived from crime or their equivalent;
  12. forfeiture of items used or intended to commit a crime or their equivalent;
  13. forfeiture of the perpetrator’s business or another natural person;
  14. forfeiture of the proceeds of the crime;
  15. redress for the damage caused by the crime;
  16. pecuniary compensation for harm;
  17. exemplary damages.

In practice, the following measures can be adjudicated in case of conviction for an economic crime:

ban on holding a specific position, practicing a specific profession or conducting a specific business activity The ban may be imposed for a period from 1 to 15 years. It is adjudicated in a situation where the perpetrator has abused, in committing the offense, his position or profession, or has proved that continuing to hold a position, pursue a profession or conduct business activity threatens significant goods protected by law
forfeiture of the proceeds of the crime As a result of forfeiture, the perpetrator is deprived of the ownership of the pecuniary benefits obtained as a result of the crime (e.g. money, real estate, securities). The forfeiture is not adjudicated if the benefit or its equivalent is returned to the aggrieved party or to another entity. In the case of more serious crimes, it was presumed that the financial benefit obtained from committing the crime is the property that the perpetrator took possession of or to which he obtained any title in the period of 5 years before the crime was committed, until the sentence was issued. In certain situations, it is also possible to order forfeiture in relation to the property of a third party (e.g. a company) who purchased from a perpetrator of crime a property constituting a benefit from a crime. In such a situation, the Penal Code provides for a certain legal fiction that things that are in autonomous possession by a third party and its property rights belong to the perpetrator and constitute a property benefit derived from the crime subject to forfeiture (the so-called extended confiscation). A third party may, however, defend itself against extended confiscation, if it proves that, on the basis of the circumstances surrounding the purchase of property from the perpetrator, it could not be assumed that the property came from a prohibited act, even indirectly
redress for the damage caused by the crime In the event of a conviction, the court may decide, and at the request of the injured party or another entitled person, it must obligatorily rule on the obligation to redress the damage caused by the crime. In this regard, the court applies the provisions of civil law, in particular the Civil Code. This means, inter alia, that the compensation for the damage should include both actual damage (damnum emergens) and lost profits (lucrum cessans). However, the criminal court is not obliged to adjudicate on the obligation to compensate for the damage in full, in particular if the evidence presented does not allow the amount of the damage to be estimated. In such a situation, the court may decide on the undisputed part of the compensation, and in the remaining scope, the crime victim may claim supplementary compensation through civil proceedings

Penalties and other repressive measures for a fiscal crime

Fine Fine in daily amounts; the lowest number of stakes is 10, the highest is 720; the rates of fines for fiscal crimes tend to be higher than for criminal or economic crimes under PC regulations. As a rule, the daily rate of fine for a fiscal crime may not be less than one-thirtieth of the minimum wage and may not exceed four hundred times it
Penalty of restriction of liberty Penalty of restriction of liberty imposed on very similar principles as in the case of other crimes
Penalty of deprivation of liberty Penalty of deprivation of liberty imposed in days, months and years for a period from 5 days to 5 years
Forfeiture of items Including: items derived directly from a fiscal crime, tools or other items constituting movable property which were used or intended to commit a fiscal crime, packages and items connected with the subject of a fiscal crime in such a way that they cannot be separated without damaging any of these items as well as items which manufacture, possession, trade, storage, transport, transfer or transmission is prohibited
Recovery of the monetary value of forfeiture of items Adjudicated if the subject of forfeiture has been destroyed, lost, hidden or cannot be taken into possession for other factual or legal reasons
Forfeiture of financial benefits If the perpetrator obtained a financial benefit from committing a fiscal offense, the court shall adjudicate the forfeiture of this benefit or the recovery of its monetary equivalent from the perpetrator’s property. In the case of more serious fiscal crimes, from which the perpetrator has obtained or could have obtained a material benefit of great value, even indirectly, or crimes committed in an organized group or association aimed at committing a fiscal crime, it is presumed that the benefit obtained from the crime is the property that the perpetrator took possession of, or to which it obtained any title in the period of 5 years before committing a fiscal crime until the judgment is issued. However, this presumption may be rebutted by proving that such property does not constitute a financial benefit from the crime.Moreover, if the property constituting an benefit obtained from a fiscal crime has been transferred to another person (e.g. a company), it is considered that the asset in autonomous possession of that person or the property rights held by that person belong to the perpetrator of the fiscal crime (extended confiscation). The acquirer of such property may, however, effectively defend itself against the forfeiture judgment, if it proves that it acted in good faith, i.e. it proves that on the basis of the circumstances accompanying the purchase, it could not be assumed that the property, even indirectly, came from a prohibited act.
Recovering the monetary equivalent of forfeiture of a financial benefit In case the imposition of forfeiture of financial benefits is not possible e.g. due to previous disposal of benefit by the perpetrator, the court shall decide on recovery from perpetrator of monetary equivalent of  forfeiture of a financial benefit
Ban on carrying out specific business, holding specific profession or position The ban may be imposed for a period from 1 to 5 years, if perpetrator has abused, when committing the fiscal crime, his position or profession, or has proved that continuing to hold a position, pursue a profession or conduct business activity threatens significant goods protected by law

Prohibition on serving in companies bodies

In addition, it should be noted that pursuant to regulations of CCPC, persons sentenced under a final judgment for certain economic crimes shall not serve as:

  1. a member of the management board, supervisory board, audit commission, liquidator or proxy of the limited liability company or joint stock company;
  2. a member of the management board of a partner company;
  3. a member of the supervisory board of a limited joint-stock partnership.

The prohibition ceases after five years from the date when the conviction becoming final, unless the conviction has been expunged earlier.

Basic characteristic of the corporate criminal liability

The legal person (e.g. limited liability company or joint-stock company), defined under ALCE provisions as “the collective entity” can be held criminally liable for the acts prohibited committed by its representatives, if their behavior brought or might have brought to the collective entity some benefit, albeit non-material.

The corporate criminal liability under the Polish law is the secondary liability of the collective entity.
It means that, the collective entity shall bear liability, if the commission of the act prohibited by its representative has been previously declared by:

  1. a valid judgment convicting such person,
  2. a judgement on conditional discontinuance of penal proceedings or proceedings in the case involving a fiscal crime in respect of such person,
  3. a judgement permitting such person a voluntary acceptance of liability or
  4. a judgement on discontinuance of proceedings against such person due to a circumstance excluding the punishment of the perpetrator.

In other words, the judgement stating that a prohibited act was committed by a representative of the collective entity or a person acting for the collective entity shall constitutes the prerequisite for any potential corporate liability of the collective entity.

Secondly, fundamental condition of liability of a collective entity is gaining or possibility of gaining pecuniary or non-pecuniary benefits by the collective entity as a result of committing a crime by its representative. Any pecuniary benefit shall effect in increasing the assets or reducing the liabilities. This benefit should have a specific economic value, an example of which may be things with a specific value, benefits or property rights. A non-pecuniary benefit obtained or obtainable by a collective entity may be the improvement of the reputation and position on the market, favor of contractors, acquisition of know-how, disavowing the value, level and quality of services provided by potential competitors operating on this market.

In practice, the demonstration of obtaining or the possibility of obtaining a benefit by a collective entity raises a considerable difficulties of proof. In some cases the requirement of an benefit for a collective entity even precludes any liability for the behavior of its representatives. This applies in particular to crimes committed by members of the management board or the company’s representatives as part of or in connection with the performance of their duties, from which they obtained only personal benefit, e.g. sexual abuse of an employee.

Type of persons for which the collective entity is liable

The collective entity can be held liable for the prohibited acts being behavior of a natural person:

  1. acting on behalf or in the interest of the collective entity within the scope of power or duty to represent it, make decisions on its behalf or exercise internal control, even if this person exceeds such power or failed to perform this duty;
  2. permitted to act as a result of having exceeded powers or failed to perform the duties by the person referred to in point (i) ;
  3. acting on behalf or in the interest of the collective entity, with the consent or knowledge of the person referred to in point (i);
  4. being entrepreneur, which directly cooperates with the collective entity in achieving a legally permissible goal.

Wrong selection, improper supervision or wrong organization as the condition of the corporate criminal liability

The collective entity shall bear liability, if the act prohibited was committed as
a consequence of:

  1. at least a lack of due diligence in the selection of the natural person acting for the collective entity (wrong selection) or
  2.  at least a lack of proper supervision over the person acting for the collective entity by the body or representative of this collective entity (improper supervision by the management board) or
  3. the organization of the activities of a collective entity that did not ensure that the commission of a prohibited act was avoided by a person acting for the collective entity, while it could have been ensured by the due diligence required in the given circumstances by the body or representative of the collective entity (wrong organization), e.g. due to absence of internal regulations or compliance code.

List of the crimes for which collective entities can be held criminally liable

The liability of the collective entities covers only limited (although relatively broad) volume of acts prohibited committed by their representatives, determined in the art. 16 of ALCE. All types of crimes, for which the collective entity shall bear liability under the regulations of ALCE, is listed below. The brief description of the selected crimes contains the point 3.5 herein.

The collective entity shall bear liability under the regulations of ALCE, if the person representing or acting for the collective entiity, commited one of the following crimes:

  • Crimes against economic trading, specified in:
  • art. 296 of PC (abuse of trust), art. 297 of PC (financial fraud), art. 298 of PC (insurance fraud), 299 of PC (money laundering), 300 of PC (frustration of creditors), art. 301 of PC (bankruptcy fraud), art. 302 of PC (corruption of creditors), art. 303 of PC (unreliable documentation), art. 304 of PC (exploitation), art. 305 of the PC (hindering the public tender), art. 306 of PC (interference on identification marks), art. 308 of PC (dishonest management);
  • art. 430 to 440 of the Act of 11th September, 2015 on Insurance and Reinsurance Activity (Journal of laws 2011, item 1844 as amended) i.e. various crimes related to activity of the insurance companies; 
  • art. 38 to 43a of the Act of 29th June, 1995 on Bonds (Journal of laws  2001, No. 120, item 1300 as amended) i.e. various crimes related to illegal bonds issuance;
  • art. 171 of the Act of 29th August, 1997 – Banking Law (Journal of laws  2019, item 2357) i.e. various crimes related to illegal banking activity;
    1. crimes defined in the Act of 30th June, 2000 – Industrial Property Law (Journal of laws 2020, item 286) (“IPL”) i.e. art. 303 of IPL (misappropriation of the authorship), art. 304 of IPL (applying for registration by non-entitled person), art. 305 of IPL (counterfeit marks);
  • art. 585 to 592 of the Act of 15th September, 2000 – the Code of Commercial Partnerships and Companies (Journal of laws 2019, item 505) (“CCPC”) i.e. various crimes related to serious breaches of the duties arising out of the CCPC provisions;
  • art. 33 of the Act of 29th November, 2000 on Foreign Trading in Goods, Technologies, and Services of Strategic Significance for State Security and for Maintaining International Peace and Security (Journal of laws  2020 item 509) i.e. illegal trade of strategic goods;
  • art. 133, 136 and 139 of the Act of 13th June, 2019 on Carrying out Economic Activity in the Field of Production of and Trading in Explosives, Weapons, and Ammunition as well as Goods and Technology of Military or Police Designation (Journal of laws 2019, item 1214) i.e. various crimes related to illegality of the production and trading of explosives, weapons and ammunition;
  • art. 63 to 63c of the Act of 21th June 2002 on Explosives Intended for the Civil Use (Journal of laws 2020, item 204) i.e. various crimes related to illegality of the production and trading of civil use explosives.
  1. Crimes against trading in money and securities, specified in:
  1. art. 310 of the PC (counterfeiting), art. 311 of PC (false information about standing of the offeror), art. 312 of the PC (passing counterfeit currency); art. 313 of PC (counterfeit mark of value);
    art. 314 of PC (counterfeit official mark);
  2. art. 178 to 183 of the Act of 29 July 2005 on Trading in Financial Instruments (Journal of laws 2020, items 89) i.e. various crimes against security of trading;
  3. art. 37 of the Act of 29 August 1997 on Mortgage Bonds and Mortgage Banks (Journal of laws 2020, item 415) (illegal issuance of mortgage bonds);
  4. art. 99 to 101 of the Act of 29 July 2005 on Public offer and the conditions of introducing financial instruments to organized trading system and on public companies (Journal of laws 2019, item 623) i.e. various crimes related to illegal initial public offer (IPO);
  1. Crimes of bribery and paid extortion, specified in:
  1. art. 228 to art. 230a, art. 250a, and art. 296a of the Penal Code;
  2. art. 192b and art. 192c of the Act of 27 August 2004 on Health-Care Benefits Financed from Public Funds (Journal of laws  2004, No 210, item 2135, as amended);
  3. art. 46 to art. 48 of the Act of 25 June 2010 on Sport (Journal of laws  2010, No. 127, item 857);
  1. Crimes against protection of information, specified in art 267 to art. 269b of the PC
  2. Crimes against credibility of documents, specified in art. 270 to art. 273 of the PC
  3. Crimes against property, specified in art. 286 and art. 287 and in art. 291 to 293 of the PC;
  4. Crimes against sexual freedom and common decency, specified in art. 199 to 200b, and art. 202 to 204, of the PC;
  5. Crimes against the environment, specified in:
  1. art. 181 to art. 184 and art. 186 to art. 188 of the PC;
  2.  art. 31 to art. 34 of the Act of 25 February 2011 on Chemical Substances and their Mixtures (Journal of laws  2011, No. 63, item 322);
  3. art 58 to art. 64 of the Act of 22 June 2001 on Genetically Modified Organisms (Journal of laws of 2001, No. 76, item 811; 2002, No. 25, item 253, No. 41, item 365);
  4. art. 37b of the Act of 14 March 1985 on the State Sanitary Inspection Office (Journal of laws of 2006, No.122, item 851, as amended);
  5. art 127a and art. 128a of the Act of 16 April 2004 on the Protection of Nature (Journal of laws  2009, No. 151, item 1220, as amended);
  6. art. 52 and 53 of the Act of 15 May 2015 on Substances Depleting the Ozone Layer and Certain Fluorinated Greenhouse Gases (Journal of laws  2015, item 881);
  7. Crimes against humanity, as specified in art. 119 of the Criminal Code, as well as against freedom and public order, as specified in art.189a, 252, 255, 256 to 258, 263, 264 and 264a of the PC;
  8. Crimes against family and guardianship, specified in Art. 211a of the PC;
  9. Crimes defined in art. 55 of the Act of 18 December 1998 on the National Memory Institute – Commission for Prosecuting Crimes against the Polish Nation (Journal of laws  2016, item 1575; 2018, items 5, 369 and 1000);
  10. Crimes specified in art. 23 to 24b of the Act of 16 April 1993 on suppression of unfair competition (Journal of laws  2003, No. 153, item 1503, with subsequent amendments);
  11. Crimes against intellectual property, specified in art. 115 to 1181 of the Act of 4 February 1994 on Copyright and Neighboring Rights (Journal of laws  2000; No. 80, item 904; 2001, No. 128, item 1402; 2002, No. 126, item 1068);
  12. Crime of a terrorist nature or crime of financing of terrorism defined in art. 165a of the PC
  13. Crimes specified in Art. 53, Art. 55, s 1 and 3, Art. 56, s 1 and 3, Art. 57, Art. 58, Art. 59, s 1 and 2, Art. 61, Art. 62, s 1 and 2, Art. 63, and Art. 64 of the Act of 29 July 2005 on Counteracting Drug Addiction (Journal of laws  2005, No. 179, item 1485; 2006, No. 66, item 469 and No. 120, item 826);
  14. Crimes specified in Art. 124, 124a, 126, 130 and 132d of the Act of 6 September 2001 – Pharmaceutical Law (Journal of laws  2008, No. 45, item 271, as amended);
  15. Crimes determined in Art. 58 of the Act of 20 March 2009 on Security of Mass Events (Journal of laws  2009, No. 62, item 504 as amended);
  16. Crimes specified in art. 45 to 51 of the Act of 9 April 2010 on Disclosing Economic Information and Exchange of Economic Data (Journal of laws  2010, No. 81, item 530 as amended);
  17. Crimes specified in art. 9 and art. 10 of the Act of 15 June 2012 on the Effects of Entrusting the Performance of Work to Foreigners Staying on the Territory of the Republic of Poland in Breach of Law;
  18. Crime specified in art. 57g of the Act of 10 April 1997 – Power Industry Law (Journal of laws  2012, item 1059, as amended);
  19. Crime defined in art. 168f to 168h of the Act of 17 June 1966 on Execution Proceedings in Administration (Journal of laws  2016, item 599, as amended);
  20. Crimes against tax liabilities and against clearings on account of grants or subventions, specified in art. 54.1 and 2, art. 55.1 and 2, art. 56. 1 and 2, art. 58. 2 and 3, art. 59.1 to 3, art. 60. 1 to 3, art. 61.1, art. 62.1 to 4, art. 63. 1 to 4, art. 64.1, art. 65.1 to 3, art. 66.1, art. 67.1 and 2, art. 68.1, art. 69.1
    to 3, art. 70.1 to 4, art. 71 to 72, art. 73.1, art. 73a.1 and 2, art. 74.1 to 3, art. 75.1 and 2, art. 76. 1 and 2, art. 77.1 and 2, art. 78.1 and 2, art. 80.1 to 3, art. 80a.1, art. 82.1 and art. 83. 1 of the FPA;
  21. Crimes against customs liabilities and the principles of foreign trading in goods and services, specified in art. 85.1 and 2, art. 86.1 to 3, art. 87.1 to 3, art. 88.1 and 2, art. 89.1 and 2, art. 90.1
    and 2, art. 91.1 to 3, art. 92.1 and 2, art. 93, art. 94.1 and 2 and art. 95.1 of the FPA;
  22. Crimes against foreign exchange dealings, specified in art. 97.1 to 3, art. 98.1, art. 99. 1 and 2, art. 101.1, art. 102.1, art. 103.1, art. 104.1, art. 105.1,art. 106.1, art. 106a.1, art. 106b.1, art. 106c.1, art. 106d.1, art. 106i.1 and art. 106j.1 of the FPA;
  23. Crimes against the organization of games of chance, as specified in art. 107.1 to 3, art. 107a.1, art. 108, art. 109, art. 110 and art. 110a of the FPA.

Example white collar crimes for which the entity shall be held liable

Fraud It is prohibited to:

  • cause another person to unfavorably dispose of his or her property, or the property of a third party, in order to achieve a material benefit, by misleading the person, or by taking advantage of a mistake or an inability to properly understand the action undertaken
  • demand a material benefit in return for an unlawfully acquired item;
Tax avoidance It is prohibited not to disclose to the competent authority the subject of taxation or not to submit a tax declaration in order to avoid taxation, thus exposing the tax to depletion
Untrue tax declaration It is prohibited to provide a false information or conceal true information in a tax declaration or statement, thus exposing the tax to depletion
Untrue information about transfer pricing documentation It is prohibited not to submit to the competent tax authority a declaration on preparation of transfer pricing documentation or to submit this statement after the deadline or to certify untrue information in this declaration
Financial fraud It is prohibited to submit a forged or altered document or a document stating an untruth, an unreliable document, or an unreliable written statement regarding the circumstances that are significant for obtaining the financial support, payment instrument or order for himself or for another person from a bank or an organizational unit conducting similar business activities on the basis of an act of law or from a body or institution disposing of public funds
Money laundering It is prohibited to receive, transfer or transport abroad, or assists in the transfer of title or possession of legal tender, securities or other foreign currency values, property rights or real or movable property obtained from the profits of acts prohibited committed by other people, or take any other action that may prevent or significantly hinder the determination of their criminal origin or place of location, their detection or forfeiture. The preparation to commit the crime of money laundering is also punishable
Frustration of creditors It is prohibited to:

  • frustrate or limit the satisfaction of a creditor, facing with the treat of insolvency or bankruptcy, by removing, concealing, selling, donating, destroying or by actually or apparently encumbering his or her assets;
  • frustrate or fail to fully satisfy a creditor, in order to prevent the execution of a decision by a court or other public authority, by removing, concealing, selling, donating, destroying or by actually or apparently encumbering of assets
Bankruptcy fraud It is prohibited to:

  • frustrate or limit of satisfaction of several creditors by legally establishing a new business entity and transferring his or her assets into it;
  • cause its bankruptcy or insolvency while being a debtor to several creditors;
  • recklessly bring about its bankruptcy or insolvency, particularly through wasting assets, contracting liabilities or concluding transactions openly contradicting principles of good management;
Corruption of creditors It is prohibited to:

  • repay or satisfies only some of creditors, thereby acting to the detriment of others, being under a threat of insolvency or bankruptcy and unable to satisfy all his or her creditors;
  • give or promise material benefit to a creditor in return for actions detrimental to other creditors in connection with bankruptcy proceedings or proceedings to prevent bankruptcy;
  • demand or receive as a creditor financial benefit in return for actions detrimental to other creditors

Criminal sanctions for a company under ALCE regulations

Obligatory sanctions against a collective entity

Cash penalty

On the basis of the current regulations, the court may order a fine in the amount of PLN 1,000 to PLN 5,000,000 against a collective entity, but not higher than 3% of the revenue generated in the financial year in which the prohibited act was committed, which is the basis for the liability of the collective entity.

If, within 5 years from the imposition of a fine, the prohibited act constituting the basis for liability of a collective entity is repeated, a fine may be imposed against this entity up to the upper limit of the statutory risk increased by half, i.e. up to PLN 7,500,000.

Forfeiture

In addition to the fine, the court is obliged to order the collective entity forfeiture of:

  1. items originating even indirectly from a prohibited act or which were used or were intended to commit a prohibited act;
  2. pecuniary benefits, even indirectly derived from the prohibited act;
  3. the equivalent of items or pecuniary benefits derived even indirectly from the prohibited act.

However, the obligation to forfeit in the above-mentioned cases does not apply if the item, pecuniary benefit or their equivalent shall be returned to another entitled entity.

Facultative sanctions against a collective entity

The court may optionally decide, irrespective of the forfeiture decision, to make the judgment public, as well as to decide on:

  1. prohibition of promotion or advertising of the conducted activity, manufactured or sold products, provided services or provided benefits;
  2. prohibition of using subsidies, grants or other forms of financial support with public funds;
  3. prohibition of access to certain funds from the European Union budget,
  4. prohibition of using the assistance of international organizations of which the Republic of Poland is a member;
  5. prohibition of applying for public contracts.

Each of the above prohibitions may be imposed for a period from 1 to 5 years.

In addition, in the event of a conviction of a representative of a collective entity or a person acting for the collective entity for the offense of entrusting work to foreigners illegally residing in Poland, the court may award the State Treasury an amount equivalent to public funds from the European Union budget, received in the 12 months preceding the issuance of a judgment or ruling stating that a prohibited act has been committed by a representative of a collective entity or a person acting for the collective entity.

Limitation period for the company’s criminal liability

A financial penalty, forfeiture, prohibitions or making the judgment publicly available shall not be adjudicated against a collective entity if 10 years have elapsed since the date of the judgement stating that a prohibited act was committed by a representative of the collective entity or a person acting for the collective entity.

General comments to the ALCE regulations

The practice to date shows that the current regulations on liability of collective entities are ineffective, as evidenced by a small number of cases conducted against collective entities. According to the data of the Ministry of Justice, in 2017 only 14 cases were brought before the courts, in 2016 only 25 cases, in 2015 only 14 cases, in 2014 only 31 cases, in 2013 only 26 cases. Moreover, the analysis conducted by the Ministry of Justice indicates that the penalties imposed under the ALCE are imposed mainly against small collective entities. According to Ministry of Justice, this distorts the concept of liability of legal persons and leads to the conclusion that the model adopted in Poland has failed.

On the one hand, the aforementioned data may suggest that there are practically little risks for the Client resulting from the application of the currently binding regulations on ALCE. On the other hand, there is a high probability of a significant change in the regulations radically tightening the rules of liability of collective entities and repressive measures that can be applied against a collective entity.

In this context, it is worth noting that in 2019 the Sejm (lower house of the Polish Parliament) received a bill of a completely new act on the liability of collective entities for acts prohibited under penalty, draft no. UD74 (“Bill“), which provided for far-reaching changes in relation to the currently applicable provisions discussed in above, including inter alia the following restrictions:

  1. according to the Bill, a prior confirmation of a prohibited act committed by a representative of the collective entity or a person acting on behalf of the collective entity is not required to prosecute a collective entity (no subsidiary liability);
  2. the Bill did not provide for a limited list of crimes for which a collective entity may be held liable. According to the Bill, the fact of committing a crime (prosecuted by public prosecution) or a fiscal offense and its direct connection with the activity of a given collective entity would be sufficient to incur criminal liability by a collective entity;
  3. the Bill assumes that a collective entity shall be liable for prohibited acts committed not only by a member of its body (e.g. a member of the company’s management board) or an employee, but in extreme cases even by an employee of its subcontractor or supplier (when the act committed by such a person remains in connection with the performance of an agreement concluded with a collective entity and when the collective entity has benefited from a crime);
  4. the condition of criminal liability of a collective entity in accordance with the Bill is the “guilt”, understood as lack of due diligence in selecting or supervising the perpetrator of the offense or
    wrong organization which made possible or facilitated the commission of the crime;
  5. the Bill provided for much stricter penalties than those applicable under the current regulations. In particular, the Bill provided for much higher fines, in some cases even up to PLN 60,000,000, and in extreme cases it authorized the Court to dissolve the collective entity;
  6. the Bill assumed the possibility of excluding the possible liability of a collective entity in the event that it took appropriate actions to demonstrate that it exercised due diligence in counteracting potential crimes by persons representing the entity or its employees. Due diligence in this respect could take place, for example, through the development and implementation of appropriate internal regulations and anti-corruption policy, or the procedure for reporting fraud in the organization.

The Bill has not been finally adopted by the Polish Parliament due to the end of the previous term (2015-2019). However, it is possible that the Bill having the same or similar content will be again submitted to the Polish Parliament by the government and shortly adopted as the binding law.

Subsidiary liability for a fiscal crime under FPC

The legal person such as limited liability company or joint-stock company may also be subsidiary liable under the FPC regulations for a fiscal crime, if it was committed by a person acting as the company’s deputy (e.g. a member of the management board, proxy, employee, agent, contractor) and the company itself gain or could have gained from the committed crime any pecuniary profit.

The subsidiary liability of the company applies to a penalty of fine and to a monetary equivalent of a forfeiture imposed by the perpetrator of the fiscal crime. If the subsidiary liability is adjudicated, a company shall pay imposed fine or monetary equivalent of a forfeiture, if the convicted person fails to pay it on time and it is found that it cannot be collected by way of execution. If the imposed charges has been paid or collected from the convicted person by way of execution only in part, the liability of a company as subsidiary liable shall be reduced respectively to the ratio of the amount paid to the amount imposed in the sentence.

Moreover, irrespective of the imposition of subsidiary liability, the court shall oblige the company that gain a pecuniary benefit from a fiscal crime committed by another person to return it in whole or in part to the State Treasury or local government unit.

Committing a crime by a member of the company’s management board or another person acting on behalf of and for the benefit of the company (e.g. its employee) may also result in civil liability held by a company itself for damages arising out of such an crime.

The company’s liability for damages caused by actions of its representatives is regulated in the provisions of the Civil Code, according to which:

  1. the legal person is liable for damages caused by the fault of its authority. If the company’s body consists of more than one person, it is sufficient to determine whether the damage was caused by at least one person who is a member of the statutory body of a legal person, whose behavior is culpable. The behavior of a person belonging to the authority responsible for the damage must, however, be functionally related to the tasks performed by that person in the organizational structure of the legal person. The above means that if a member of the company’s management board is convicted by a final judgment for an crime committed in connection with the performed function, the company will be liable for damages caused by this crime. The civil liability of the company and the convicted member of the management board will be joint and several;
  2. the company is liable for damage caused by a subordinate, i.e. a person who is organizationally managed within the company’s organizational structure (e.g. a company’s employee), who caused damage through his fault while performing the entrusted activity. The damage must be caused in connection with the activities entrusted to the subordinate (employee) and activities carried out in the interest of the superior (company), and not performed in the employee’s own interest. Therefore, if an employee of the company has committed even an unintentional crime acting within the duty entrusted to him, and not in its own interest, and it has been convicted of this crime by a final judgment, the company may be liable for damages resulting from this crime.

Compensation claims against the company for a crime committed by its management board member or employee must be pursued by aggrieved party in separate civil proceedings. It should be emphasized that in the event of compensation claims being filed against the company for an crime committed by a member of its management board or its employee, the company cannot question the fact of committing the crime in a civil lawsuit. The findings of a final conviction as to the commission of a crime in criminal proceedings are binding for the court in civil proceedings. On the other hand, the company may defend itself by referring to circumstances excluding its civil liability (e.g. damage caused by an employee in connection with the performance of employee duties) or limiting its civil liability (e.g. questioning the amount of the damage suffered).

Expert team leader DKP Legal Michał Puk
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