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Corporate Liability in Poland

By Marcin Gmaj (Baker McKenzie Poland)

I. Corporate liability deriving from criminal activity

1. Nature of the liability (criminal, administrative) and basis (crimes committed by directors or representatives, in the interest of or for the advantage of the company)

Corporate liability in Poland has an administrative nature. Nevertheless, it is executed by the criminal courts (not by administrative courts, authorities or other bodies) and the proceedings are actually based on penal procedure.

The basis of this liability is the Act of October 28, 2002 on the liability of collective entities for acts prohibited under penalty1 – hereinafter referred to as “the Act” or “the Law.”

Corporate liability may arise only if these five conditions are met jointly:

(a) A listed criminal or fiscal offense is committed.

(b) This offense gives or could give the collective entity an advantage (even that of a nonfinancial nature). Conversely, no company liability will arise if the top management or individuals under the top management’s control act exclusively for their own or for a third party’s interest.

(c) An offense is committed by a natural person who (see Article 3 of the Act):

  • Acts on behalf of and in the name of the collective entity under the authority or duty to represent it, to make decisions in its name and/or to exercise internal control, or whenever such person abuses their authority or neglects their duty
  • Is allowed to act as the result of the abuse of the authority or neglect of the duty by such person
  • Actsn in the name of or on behalf of the collective entity, with the consent of or with the knowledge of such person (for instance, the holder of a commercial proxy)
  • Is an entrepreneur who directly cooperates with the collective entity toward the realization of a legally admissible purpose

(d) That the offence was committed by this natural person is confirmed by:

  • A valid convicting judgment
  • A decision to conditionally discontinue the proceedings;
  • A decision to leave voluntary submission to liability
  • A decision to discontinue the proceedings due to circumstances, excluding the prosecution of the perpetrator (see Article 4 of the Act)

(e) The offence is committed because of:

  • The failure to exercise due diligence in electing the natural person, or there is no due supervision over that person
  • The organization of activities of the collective entity, which does not protect it from the natural person’s perpetrating of the offense (see Article 5 of the Act)

2. Types of crimes/administrative offences from which, according to the legislature, corporate liability may arise

Company liability under the Act arises only if the following crimes are committed:

  • Against economic relations: Breach of trust in business relations (Penal Code, Article 296); Credit and subsidy fraud (Penal Code, Article 297); Insurance fraud (Penal Code, Article 298); Money laundering (Penal Code, Article 299); Fraudulent action of a debtor against their creditor (Penal Code, Article 300); Intentional bankruptcy or conversion of a business entity with the aim of avoiding due payment to the creditor (Penal Code, Article 301); Acting to the detriment of debtors by satisfying claims of only some of them (Penal Code, Article 302); Undue bookkeeping causing material damage to the business entity (Penal Code, Article 303); Forceful contract with a business entity under constraint (Penal Code, Article 304); Preventing or obstructing public tenders (Penal Code, Article 305); Falsifying identification marks and expiry dates of products (Penal Code, Article 306); Liability of representatives of business entities (Penal Code, Article 308); Undertaking insurance or reinsurance activities without authorization (Act on Insurance and Reinsurance Activities, Article 430); Concluding an insurance contract without a power of attorney (Act on Insurance and Reinsurance Activities, Article 431); Concluding a reinsurance contract without a power of attorney (Act on Insurance and Reinsurance Activities, Article 432); Announcing untrue data and information while discharging the duties specified in the Act or presenting the same to a body of an insurance establishment, a body of a reinsurance establishment, state authorities or a person appointed to audit financial statements (Act on Insurance and Reinsurance Activities, Article 433); Providing false information to the regulatory authority by the member of the management or supervisory board (Act on Insurance and Reinsurance Activities, Article 434); Failure of the insurer to report bankruptcy (Act on Insurance and Reinsurance Activities, Article 435); Failure of the reinsurer to report bankruptcy (Act on Insurance and Reinsurance Activities, Article 436); Unlawful use of terms connected with the insurance or reinsurance activities in the name of the company (Act on Insurance and Reinsurance Activities, Article 437); Nonperformance of duties by the director of the main branch (Act on Insurance and Reinsurance Activities, Article 438); Wrongful disclosure or use of confidential information regarding the insurance (Act on Insurance and Reinsurance Activities, Article 439); Wrongful disclosure or use of confidential information regarding the insurance by the regulatory authority (Act on Insurance and Reinsurance Activities, Article 440); Issuance of bonds without the required authorization (Act on Bonds; Article 38); Providing false information (Act on Bonds; Article 39); Non-provision of financial reports (Act on Bonds; Article 40); Failure to deposit revenues (Act on Bonds; Article 40a); Allocating the proceeds from the bonds issued for purposes other than those specified in the terms of issue (Act on Bonds; Article 41); Negligence in representation of the bank (Act on Bonds; Article 43); Proposing the acquisition of bonds contrary to the ban (Act on Bonds; Article 43a); Issuance of bonds with violation of the law (Act on Bonds; Article 87); Violation of the provisions on the transmission and storage of documentation (Act on Bonds; Article 88); Failure to share the valuation of the subject of security (Act on Bonds; Article 89); Providing false data during the proposal to acquire bonds (Act on Bonds; Article 90); Failure to provide financial statements (Act on Bonds; Article 91); Infringement of a provision on revenues of the issuer of revenue bonds (Act on Bonds; Article 92); Using funds from the bonds for purposes other than those specified in the terms of issue (Act on Bonds; Article 93); Allowing illegal voting at the general meeting of bondholders (Act on Bonds; Article 94); Using false or someone else’s document at the meeting of bondholders (Act on Bonds; Article 95); Proposing to acquire bonds purchased by the issuer (Act on Bonds; Article 96); Purchase of own bonds despite the provisions (Act on Bonds; Article 97); Breach of duty of the representative bank (Act on Bonds; Article 98); Undertaking banking activity without authorization; Unlawful use of the terms “bank” and “savings society” in the company name (the Banking Law; Article 171); Failure to provide information to regulatory authorities (the Banking Law; Article 171); Misappropriation of authorship (the Industrial Property Law, Article 303); Non-entitled persons’ application for registration (the Industrial Property Law, Article 304); Counterfeiting mark (the Industrial Property Law, Article 305); Failure to file for bankruptcy (the Code of Commercial Companies, Article 586); Announcement of false data (the Code of Commercial Companies, Article 587); Acquisition of own shares (the Code of Commercial Companies, Article 588); Unlawful issuance of documents (the Code of Commercial Companies, Article 589); Facilitation of illegal voting (the Code of Commercial Companies, Article 590); Participation in illegal voting (the Code of Commercial Companies, Article 591); Illegal issuance of shares (the Code of Commercial Companies, Article 592); Undertaking an activity without authorization or contrary to its conditions (Act on Foreign Trade in Goods, Technologies and Services of Strategic Significance for the Security of the State and for Keeping International Peace and Security, and on amendments to selected laws, Article 33); Undertaking activity without authorization (Act on Pursuing Business Activities in the Area of Manufacturing and Trading in Explosives, Arms, Ammunition, and Products and Technologies Designated for Military or Police Purposes, Article 36); Sales of pyrotechnic articles to minors (Act on Pursuing Business Activities in the Area of Manufacturing and Trading in Explosives, Arms, Ammunition, and Products and Technologies Designated for Military or Police Purposes, Article 37); Unauthorized displacement of explosive materials or ammunition (Act on Explosive Materials for Civil Use, Article 63); Unauthorized purchase, storage or use of explosive materials (Act on Explosive Materials for Civil Use, Article 63a); Unauthorized manufacturing of explosive materials with in-situ method (Act on Explosive Materials for Civil Use, Article 63b); Unauthorized purchase, storage or use of pyrotechnic materials (Act on Explosive Materials for Civil Use, Article 63c)
  • Against money and securities trading: Falsification of money and securities and putting them into circulation ( Penal Code, Article 310); Disseminating false information in documentation relating to trade in securities ( Penal Code, Article 311); Putting into circulation counterfeit or altered money ( Penal Code, Article 312); Counterfeiting of official marks of value and putting such a sign into circulation ( Penal Code, Article 313); Counterfeiting or altering an official mark designed to certify an authorization and payments of fiscal charges ( Penal Code, Article 314); Undertaking broker activities without authorization (the Law of Public Trading in Securities, Article 178); Wrongful disclosure of confidential information (the Law of Public Trading in Securities, Article 179); Wrongful disclosure of confidential information (the Law of Public Trading in Securities, Article 179a); Issuance of mortgage bonds without being authorized to, or in issuing mortgage bonds, violating obligations, or, not being authorized to issue mortgage bonds, still using the name “mortgage bond” or another name containing those words to denote the securities issued (Act on Mortgage Bonds and Mortgage Banks, Article 37); Unlawful offering without authorization (Act on Public Offers and Conditions of Introducing Securities into the Organized Trading System and on Public Companies, Article 99); Unlawful offering contrary to the bans (Act on Public Offers and Conditions of Introducing Securities into the Organized Trading System and on Public Companies, Article 99a); Providing false information in the prospectus (Act on Public Offers and Conditions of Introducing Securities into the Organized Trading System and on Public Companies, Article 100); Impacting on the content of information to the regulatory authority (Act on Public Offers and Conditions of Introducing Securities into the Organized Trading System and on Public Companies, Article 101)
  • Bribery and trade in influence: Passive bribery ( Penal Code, Article 228); Active bribery ( Penal Code, Article 229); Passive trade in influence ( Penal Code, Article 230); Active trade in influence ( Penal Code, Article 230a); Corruption in elections ( Penal Code, Article 250a); Corruption in the private sector ( Penal Code, Article 296a); Corruption (Act on the Sport, Article 46); Using information about the fixed result of the sport event in sport betting (Act on the Sport, Article 47); Brokering for fixing the result of the sport event (Act on the Sport, Article 48)
  • Against data protection: Illegal access to information ( Penal Code, Article 267); Obstructing obtaining information by an authorized person ( Penal Code, Article 268); Destruction of computer data ( Penal Code, Article 268a); Damage to computer data ( Penal Code, Article 269); Disruption of a computer system ( Penal Code, Article 269a), Creation of illegal computer programs ( Penal Code, Article 269b)
  • Against the credibility of documents: Falsification of a document ( Penal Code, Article 270); Certifying to an untruth in public documents ( Penal Code, Article 271); Procuring an attestation by deceitful misleading of a public official ( Penal Code, Article 272); Use of falsified documents ( Penal Code, Article 273)
  • Against property: Fraud ( Penal Code, Article 286); Computer fraud ( Penal Code, Article 287); Receiving stolen goods ( Penal Code, Article 291); Involuntary receiving of stolen goods ( Penal Code, Article 292); Receiving stolen software ( Penal Code, Article 293)
  • Against sexual freedom and good morals: Abusing a relationship of dependency ( Penal Code, Article 199); Sexual intercourse with a minor ( Penal Code, Article 200); Prohibition on establishing a connection with a minor ( Penal Code, Article 200a); Condoning pedophiliac behavior ( Penal Code, Article 200b); Pornography ( Penal Code, Article 202); Forced prostitution ( Penal Code, Article 203); Pimping ( Penal Code, Article 204)
  • Against the environment: Destruction ( Penal Code, Article 181); Pollution ( Penal Code, Article 182); Waste ( Penal Code, Article 183); Radioactive material ( Penal Code, Article 184); Unperformed duty ( Penal Code, Article 186); Protected area or object ( Penal Code, Article 187); Harmful activity ( Penal Code, Article 188); Illegal marketing of chemical substances (Act on Chemical Substances and Preparations, Articles 31 and 34); Illegal export of chemical substances (Act on Chemical Substances and Preparations, Articles 32 and 33); Use of GMM or release of GMO into the environment (Act on Microorganisms and Genetically Modified Organisms, Article 58); Threat to life or health (Act on Microorganisms and Genetically Modified Organisms, Article 59); Default of duties during failure (Act on Microorganisms and Genetically Modified Organisms, Article 60); Breach of information duties (Act on Microorganisms and Genetically Modified Organisms, Article 61); Breach of safety regulations (Act on Microorganisms and Genetically Modified Organisms, Article 64); Illegal production, marketing of chemical substances (Act on the State Sanitary Inspectorate, Article 37b); Protected species possession (Act on Nature Conservation, Article 127a); Protected species trade (Act on Nature Conservation, Article 128a); Illegal production, import, export, marketing or use of substances that deplete the ozone layer (Act on Substances That Deplete the Ozone Layer, Article 52); Issuance of a certificate without the required permissions (Act on Substances That Deplete the Ozone Layer, Article 53); Pollution from ships (Act on the Prevention of Pollution from Ships, Article 35a)
  • Against humanity: Violence and unlawful threats ( Penal Code, Article 119)
  • Against freedom and public order: Human trafficking ( Penal Code, Article 189a); Taking a hostage ( Penal Code, Article 252); Incitement and praise of an offense ( Penal Code, Article 255); Propagation of fascism or totalitarianism ( Penal Code, Article 256); Insulting a group or individual ( Penal Code, Article 257); Organized criminal groups ( Penal Code, Article 258); Firearms and ammunition ( Penal Code, Article 263); Illegal entry ( Penal Code, Article 264); Assisting illegal immigration ( Penal Code, Article 264a)
  • Against the family and guardianship: Organizing illegal adoptions ( Penal Code, Article 211a)
  • Violation of business secrets (Act against Unfair Competition, Article 23); Copying products (Act against Unfair Competition, Article 24); Establishing financial pyramids (Act against Unfair Competition, Article 24a)
  • Plagiarism and other infringements of rights (Copyright Act, Article 115); Unlawful distribution (Copyright Act, Article 116); Unlawful fixation or reproduction (Copyright Act, Article 117); Circulation of illegal copies (Copyright Act, Article 118); Production, trading or advertising of devices for the purpose of unauthorized removal or circumvention of technical devices applied to protect a work (Copyright Act, Article 118)
  • Against terrorism: Financing terrorist activity ( Penal Code, Article 165a); Distribution of content facilitating an offense ( Penal Code, Article 255a)
  • Against narcotics: Illegal drugs manufacture, converting or processing (Act against Drug Addiction, Article 53); Illegal international and intra-community trade (Act against Drug Addiction, Articles 55.1 and 55.3); Marketing drugs and participation in the same (Act against Drug Addiction, Articles 56.1 and 56.3); Illegal preparation of drugs (Act against Drug Addiction, Article 57); Facilitating, soliciting to use drugs (Act against Drug Addiction, Article 58) Facilitating, soliciting to use drugs in order to attain benefits (Act against Drug Addiction, Article 59.1); Facilitating or soliciting minors to use drugs in order to attain benefits (Act against Drug Addiction, Article 59.2); Illegal precursors trade (Act against Drug Addiction, Article 61); Illegal drugs possession (Act against Drug Addiction, Articles 62.1 and 62.2); Illegal cultivation and harvest of drugs (Act against Drug Addiction, Article 63); Drugs theft (Act against Drug Addiction, Article 64)
  • Medicinal products: Marketing medical products without authorization (the Pharmaceutical Law, Article 124); Placing prohibited veterinary products on the market (the Pharmaceutical Law, Article 124a); Manufacturing medicinal products without a license (the Pharmaceutical Law, Article 125); Marketing outdated medical products (the Pharmaceutical Law, Article 126); Conducting clinical trials without authorization (the Pharmaceutical Law, Article 126a); Running pharmaceutical wholesalers or pharmacies without a license (the Pharmaceutical Law, Article 127); Undertaking business activities without entry in the National Register of Brokers for medicinal products (the Pharmaceutical Law, Article 127a); Mail order sale of medicines without permission (the Pharmaceutical Law, Article 127a); Prohibited medical products advertising (the Pharmaceutical Law, Article 129); Unlawful medical products advertising (the Pharmaceutical Law, Article 129a); False data (the Pharmaceutical Law, Article 130); Managing a pharmacy without qualifications (the Pharmaceutical Law, Article 131); Hindering controls/inspections (the Pharmaceutical Law, Article 132); Use of unprocessed raw materials (the Pharmaceutical Law, Article 132a); Lack of acquisition documents (the Pharmaceutical Law, Article 132b); Lack of sales documentation (the Pharmaceutical Law, Article 132c); Prohibition on retail sale (the Pharmaceutical Law, Article 132e)
  • Unlawful organization of mass events (Act on Mass Events Safety, Article 58)
  • Activity not covered by the regulations (Act on the Provision of Business Information and Exchange of Economic Data, Article 45); Abusing the name of the office (Act on the Provision of Business Information and Exchange of Economic Data, Article 46); Failure to remove data (Act on the Provision of Business Information and Exchange of Economic Data, Article 47); Disseminating false information (Act on the Provision of Business Information and Exchange of Economic Data, Article 48); Having unresolved contracts with an office (Act on the Provision of Business Information and Exchange of Economic Data, Article 49); Acting without the required authorization (Act on the Provision of Business Information and Exchange of Economic Data, Article 50); Irregularities in the functioning of the office (Act on the Provision of Business Information and Exchange of Economic Data, Article 51)
  • Entrusting a job to foreigners illegally residing in Poland (Act on the Consequences of Entrusting a Job to Foreigners Illegally Residing in Poland, Article 9); Entrusting a job to foreigners illegally residing in Poland – abusing (Act on the Consequences of Entrusting a Job to Foreigners Illegally Residing in Poland, Article 10)
  • Unauthorized fuels trading (Energy Act; Article 57g)
  • Fiscal offenses: Against tax duties and the obligation to account for grants or subsidies (Fiscal Penal Code, Article 54 §§ 1 and 2, Article 55 §§ 1 and 2, Article 56 §§ 1 and 2, Article 58 §§ 2 and 3, Article 59 §§ 1-3, Article 60 §§ 1-3, Article 61, § 1, Article 62 §§ 1-4, Article 63 §§ 1-4, Article 64 § 1, Article 65 §§ 1-3, Article 66 § 1, Article 67 §§ 1 and 2, Article 68 § 1, Article 69 §§ 1-3, Article 70 §§ 1-4, Articles 71-72, Article 73 § 1, Article 73a §§ 1 and 2, Article 74 §§ 1- 3, Article 75 §§ 1 and 2, Article 76 §§ 1 and 2, Article 77 §§ 1 and 2, Article 78 §§ 1 and 2, Article 80 §§ 1-3, Article 80a § 1, Article 82 § 1 and Article 83 § 1); Against customs duties and the principles of foreign trade in goods and services (Fiscal Penal Code, Article 85 §§ 1 and 2, Article 86 §§ 1-3, Article 87 §§ 1-3, Article 88 §§ 1 and 2, Article 89 §§ 1 and 2, Article 90 §§ 1 and 2, Article 91 §§ 1- 3, Article 92 §§ 1 and 2, Article 93, Article 94 §§ 1 and 2, and Article 95 § 1); Against organizing games of chance, slot machine games, mutual pools (Fiscal Penal Code, Article 107 §§ 1 -3, Article 107a § 1, Article 108, Article 109 and Article 110); Illegal advertising of games of chance or bets (strong>Fiscal Penal Code, Article 110a); Against foreign exchange dealings (Fiscal Penal Code, Article 97 §§ 1-3, Article 98 § 1, Article 99 §§ 1 and 2, Article 101 §1, Article 102 § 1, Article 103 § 1, Article 104 § 1, Article 105 § 1, Article 106 § 1, Article 106a § 1, Article 106b § 1, Article 106c § 1, Article 106d § 1, Article 106i § 1 and Article 106j § 1)

 3. Identification of companies and entities to which liability may apply

Liability under the law may apply to collective entities.

Collective entities, according to Article 2 of the Act, means every legal person (such as limited liability companies [SpĂłlka z oraniczona odpowiedzialnoscia or sp. z o.o.], joint-stock companies [SpĂłlka Akcyjna or S.A.], foundations, associations, cooperatives, independent public healthcare centres, etc.) and quasi legal persons (such as registered partnerships [spĂłlka jawna or sp.j.], professional partnerships [spĂłlka partnerska or s.p.], limited partnerships [spĂłlka komandytowa or sp.k.], limited joint-stock partnerships (spĂłlka komandytowo-akcyjna or S.K.A.) or even political parties). Collective entities may also denote capital companies in organisation, entities under liquidation, foreign organisational units and every entrepreneur that is not a natural person.

This liability does not cover the Polish State Treasury, local government units and their associations. However, if the collective entity is a commercial company with participation in these public entities, then liability may occur. This liability never covers civil law associations.

4. Corporate liability for crimes committed abroad by its representatives or subsidiaries

The Act does not have any special provisions. According to the general rule, crimes committed abroad by representatives or subsidiaries of a corporation are liable to corporate liability only if they are crimes in the meaning of Polish law and by the law in force where it was committed (see Article 111 of the Penal Code).

The issue of committing crimes abroad is regulated in the Penal Code. In this regard, some separate rules are provided for Polish citizens and foreigners. Due to Article 109 of the Penal Code, Polish criminal law applies to Polish citizens who have committed an offence abroad. Owing to Article 110 of the Penal Code, Polish criminal law applies to foreigners who have committed a prohibited act abroad that is against the interests of the Republic of Poland, a Polish citizen, a Polish legal entity or a Polish organisational unit. In the case of other prohibited acts, Polish criminal law applies to foreigners who have committed such act abroad if, under Polish criminal law, the prohibited act is subject to a penalty exceeding two years of imprisonment, where the offender is in the Republic of Poland and where no decision on his or her extradition has been made.

As an exception from the general rule, regardless of the provisions in force in the place where an offence is committed, Polish criminal law applies to a Polish citizen or a foreigner who commits (Article 112 of the Penal Code):

  • An offence against the internal or external security of the Republic of Poland;
  • An offence against Polish offices or public officials;
  • An offence against Poland’s material economic interests; or
  • An offence of false testimony made before a Polish office.
  • A fiscal offence against Poland’s material fiscal interests; or
  • A fiscal offence (against tax obligations and clearing from grants or subsidies, or against customs duties and rules of foreign trade in goods and services) against the European Union’s material fiscal interests.

These rules also apply in the case fiscal offences are committed. Due to Article 3 of the Fiscal Penal Code2, regardless of the provisions in force in the place where a fiscal offence is committed, Polish criminal law applies to a Polish citizen or a foreigner who commits abroad:

  • A fiscal offense against Poland’s material fiscal interests
  • A fiscal offense (against tax obligations and clearing from grants or subsidies, or against customs duties and rules of foreign trade in goods and services) against the European Union’s material fiscal interests

5. Corporate liability in the case of transactions taking place after the commission of a crime (acquisitions, mergers, demergers, etc.)

Specific rules govern corporate liability in the case of transformation, mergers, demergers and purchasing an enterprise. In particular:

  • Transformations: The liability passes to the transformed company. In other words, the company, though transformed into a different type, shall continue to be liable for crimes committed before the date on which the transformation became effective (see Article 553 of the Commercial Companies Code – Journal of Laws of 2000, no. 94 item 1037 as amended).
  • Mergers: The liability passes to acquiring or newly formed company. In other words, due to Article 494 §1 of the Commercial Companies Code, an acquiring company or a newly formed company shall enter, as of the merger date, all the rights and obligations of the company being acquired or the companies merging by the formation of the new company.
  • Demergers: The liability passes to companies created as a result of division; in the other words, in accordance with Article 531 §1 of the Commercial Companies Code, acquiring companies or newly formed companies created as a result of division shall enter, as of the division date or the separation date, the rights and obligations of the company being divided set out in the draft terms of division.
  • Purchase of an enterprise: Liability does not pass to the purchaser of the enterprise (see also the judgment of 17 March 2011 of the Voivodeship Administrative Court in Warsaw, VI ACA 1027/10). In other words, corporate liability that arose from a criminal or fiscal offense is not passed to the purchaser in the case of the purchase of an enterprise (or its part) under the provisions of the Civil Code (see Article 55).

II. Applicable sanctions

1. Type of sanctions applicable to the company

If the company is found liable for any of the abovementioned crimes committed by the relevant person, the court may apply or be obliged to apply the following penalties to the company:

  • Pecuniary fines

The imposition of this penalty is always mandatory (Article 7 of the Act). It may be imposed at a minimum of PLN 1,000, up to a maximum of PLN 5 million. However, it cannot amount to more than 3% of the company’s revenue in the year the crime was committed.

If the offense that is the basis of the corporate liability is committed again within five years from the decision of the fine, the collective entity may then be fined for an amount up to the upper law-defined penalty limit increased by one-half (Article 13 of the Act).

On the other hand, the court may issue a discharge from this sanction, provided that: (1) it is a particularly justified case; and (2) the collective entity did not gain any benefit from the commission of the offense.

  • Confiscation

The imposition of this penalty is mandatory, provided that no third party is entitled to a return (Article 8 of the Act). Courts always confiscate: (1) artifacts acquired directly or indirectly through a criminal or fiscal offense, or which served or were intended to be used to commit a criminal or fiscal offense; (2) the financial benefits derived directly or indirectly from a criminal or fiscal offense; and (3) the equivalent of the abovementioned artifacts or financial benefits.

  • Alerting the public about the judgment

The imposition of this sanction depends entirely on the judge, so it is not mandatory.

  • Prohibitions

The imposition of prohibitions depends entirely on the judge, so it is not mandatory (Article 9 of the Act). Sanctions may be imposed for a period of 1 to five years. The catalog of prohibitions are as follows: (1) on the promotion and advertising of the business, manufactured or sold goods and provided services; (2) on the use of grants, subsidies or other forms of support from public funds; (3) on access to the European Union’s financial resources; (4) on the use of the help of international organizations of which Poland is a member; and (5) on applying for public contracts.

2. Interim measures, cease and desist orders, bans and confiscatory measures

During proceedings against collective entities, the court is able to impose on them, as a preventive measure, prohibition: (1) on the merger, demerger (division) or transformation of a collective entity during proceedings against them; (2) on competing for public tenders; or/and (3) on encumbering its property or disposal of parts of its property, without the consent of the court (Article 26a of the Act).

Moreover, the Penal Procedure Code has several preventive measures, which were created to deal with the criminal liability of natural persons. Whether some of these may be accordingly applied to the collective entities (as bail, consisting of money, securities, pledge or mortgage, Article 266; Prohibition to leave the country by the members of the board of directors, Article 277) is highly controversial.

However, there is no doubt that because of Article 291, if an offense that is liable to a fine, forfeiture, exemplary damages, monetary performance, an obligation to fix damage caused or compensate for harm done is committed, the execution of the judgment may be secured ex officio on the property of the accused.

3. Liability of directors or managers for not having adopted (intentionally or negligently) measures for the provision of the crime

Directors or managers who have not adopted measures to prevent the commission of the crime may be liable for damages (civil law) and held criminally liable. Neither the existence nor nonexistence of liability of the collective entity under this Act will exclude civil liability for the inflicted damage, administrative liability, or personal legal responsibility of the perpetrator of the prohibited act (Article 6 of the Act).

Under Article 415 of the Civil Code, the collective entity is entitled to sue these directors or managers, provided that it proves: (1) their fault (intentional or negligent); (2) the existence of damage; (3) the unlawfulness of act; and (4) an adequate causal link between the unlawfulness of act and the damage. What is more, the Commercial Companies Code also provides a basis for civil liability. For instance, owing to Article 293, a member of the management board of a limited liability company will be liable to the company for damage caused by acts or omissions in breach of the law or the provisions of the articles of association, unless they are not at fault. Article 483 provides the same rule in regard to the joint stock company.

Owing to Article 296 of the Penal Code , anyone who (while under a legal obligation, a decision of an appropriate authority or a contract to manage the property or business of an individual, a company, or an organizational unit without legal personality), by abusing the authority vested in them, or by failing to perform their duties, inflicts substantial damage, may be imprisoned for three months to five years. Noncompliance in the area might be treated as such a case.

III. Measures and “models” of prevention and effects of the same on corporate liability and applicable sanctions

1. Consequences of the adoption of a compliance “model” and effects on corporate liability for crimes committed by the company’s managers, directors or representatives (cases in which it is possible to obtain an exemption from liability or a mitigation of the sanction)

Polish law does not include any compliance “model” that will fully protect the collective entities from corporate liability. However, according to Article 5 of the Act, the implementation of organization rules will be highly appreciated, as it can minimize the risk of incurring liability.

2. Modality according to which a compliance “model” must be adopted in order to benefit from exemption from responsibility or mitigated punishment (codes of ethics, procedures, etc.)

There is neither a general nor a sector code of ethics in this whole field. However, there are several “sectoral” codes of ethics that ensure compliance, but merely with the anti-corruption provisions. These focus on interactions with third parties and are not concerned with the internal organization of the entity. For example:

  • In the pharmaceutical sector: Kodeks Dobrych Praktyk Przemyslu Farmaceutycznego “INFARMA”
  • In the educational sector: Kodeks Dobrych Praktyk Sekcji WydawcĂłw Edukacyjnych Polskiej Izby Ksiazki

3. Monitoring: independent person or body to control/supervise with the purpose of verifying the correct application of the “model”; mode of operation of such person or body.

In Poland, there is no person or body that is considered competent enough to monitor compliance with the rules.

IV. Judicial proceedings to determine corporate liability

1. Court competent to decide the liability of and penalties applicable to the company

As stated in Article 24 of the Act, jurisdiction over a case (both with regard to determination of guilt and sanctions) belongs to the District Court in whose judicial circuit the offense was committed. If the offense was committed abroad, then jurisdiction over the case belongs to the District Court in whose judicial circuit the collective entity has its registered office.

If the case is very complicated or very important, then the Appeals Court may refer the matter to the Regional Court. In that case, the Regional Court will be the court of first instance (Article 25 of the Act).

2. Possibility of the application of interim measures

According to Article 26 of the Act, to ensure a collective entity’s proper conduct during the procedure, the procurator or the victim may, before the trial, apply to the court for the issuance of a freezing injunction on the property of the entity. If the judge agrees with the application, then they will issue a decision. The collective entity can always file an appeal challenging the court’s decision.

3. Plea bargains and related effects on corporate liability

The Penal Procedure Code includes plea bargains (see Articles 335 and 387) and in line with Article 22 of the Act, this option may be exercised. Thus, the collective entity may try to settle the proceedings with a plea bargain.

4. Imposition of sanctions against the company

Sanctions are imposed by the Criminal Court in its verdict. As mentioned in Section II.1, some sanctions are mandatory while some are at the discretion of the court.

When imposing a Court’s sanctions, the judge shall take into consideration, in particular, but not limited to (Article 10 of the Act), the following:

  • The economic situation of the collective entity
  • The seriousness of the irregularities in the selection (culpa in eligendo) or supervision (culpa in custodiendo) of the relevant natural person
  • The value of benefits derived from the crime by the collective entity
  •  The social effects of the punishment
  • The effects of the punishment for the further operations of the collective entity.

5. Permanence of corporate liability if the crime is extinguished

Sanctions cannot be imposed 10 years after a judgment has been passed by the court in the case of individual persons (Article 14 of the Act).

V. Corporate liability in multinational groups

1. Liability of parent companies located abroad in the case of offences committed by directors, managers or representatives of a local company

A parent company cannot be directly or automatically held responsible for liability that arose from offenses committed in the name of and on behalf of the local company. However, the same case may hold both local and parent company liable, depending on the position and role of the convicted individual (eg, if they were acting in the interest of both the local company and parent company when committing the crime).

2. Basis of liability and applicable sanctions

Not applicable.

VI. Significant case law concerning corporate liability arising from crimes and draft laws under discussion

1. Significant case law, if any

  • Judgment of 4 September 2013 of the Polish Supreme Court, V KK 254/14 (definition of the collective entity)
  • Judgment of 11 March 2014 of the Polish Supreme Court, V KK 13/14 (conditions of the exclusion of liability of the collective entity for acts committed by directors and board members)/li>
  • Judgment of 17 March 2011 of the Voivodeship Administrative Court in Warsaw, VI ACA 1027/10 (the liability does not pass to the purchaser of the enterprise)
  • Judgment of 5 December 2013 of the Polish Supreme Court, V KK 335/13 (the possibility of issuing a collective entity acquittal)

2. Proposed or contemplated new legislation

None.

1 Journal of Laws 2014, item 1417 – consolidated text. – Back
2 Journal of Laws of 2012, November 27, item 186 – consolidated text. – Back