The works on the draft Act on Liability of Collective Entities for Acts Prohibited under Penalty (“Act”) are in progress. On 17 October, 2018, the Ministry of Justice published a new version of the draft Act.
Main assumptions of the amendment
The main objective of the new Act is to increase the effectiveness of preventing and combating against serious economic and fiscal crimes, including corruption offences. This objective is to be achieved through increasing the scope of liability, imposing new obligations and introducing more severe sanctions.
Collective entity – who is affected?
Pursuant, to the provisions of the new Act, collective entity is a legal person and organisational units without legal personality on which separate laws and regulations confer legal capacity, which have their registered office or conduct business activity on the territory of the Republic of Poland, and, in some situations having their registered office or conducting business activity abroad.
The most important changes
- The Act does not contain closed list of offences for which a collective entity may be held responsible for – in practice, the responsibility concerns, among others, all offences related to economic activity, penal and fiscal offences, public corruption and corruption in business, or crimes against workers’ rights.
- Collective entity will be subject to criminal liability for the conduct of their governing body or of the member of governing body, including offences committed as a result of the failure to exercise the required due diligence.
- Liability of a collective entity will be extended to offences committed also by an employee, a person authorized to represent entity and even a subcontractor or other entrepreneur.
- The requirement of previous conviction of a natural person as a condition precedent of responsibility of a collective entities will be eliminated.
- Collective entity may be also held responsible, in situations which exclude the perpetrator’s liability, and also when the perpetrator is not detected or cannot be caught.
- Special protection of the labour rights of whistleblowers. to be introduced.
- Liability under the provisions of the Act does not exclude civil and administrative liability of a collective entity or individual criminal liability.
- The provisions of the new Act will also apply to certain offences which were committed before the Act entered into force.
New obligations of collective entities
- Requirement of implementing compliance procedures in the field of detecting and preventing the offences within the company’s business activity.
- Requirement of clarifying reported information concerning i.a. suspicion of committing an offence, failure to comply with obligations or abuse of rights, irregularities in the organisation of business activity of a collective entity.
Severe sanctions
Penalties:
- Fines between PLN 30 000 and PLN 30 000 000 (up to PLN 60 000 000 i.a. if internal investigation was not conducted).
- Dissolution or liquidation of a collective entity.
Other sanctions:
- Confiscation of property – adjudicated against collective entity also when the entity is not responsible for the committed crime.
- Prohibition of promotion or advertisement; prohibition of conducting a specific type of business activity.
- Prohibition of using grants, subsidies and other form of public support or any assistance from international organisations.
- Prohibition of competing for public contracts.
- Obligation to reimburse the equivalent of the support financed with public funds.
- Obligation to compensate for the damage or non-material damage suffered; compensatory damages up to PLN 5 000 000.
- Imposition of compulsory administration in the course of the proceedings; permanent or temporary closing of a branch.
Our legal service
- Preparation and implementation of the procedures required by the Act, including implementation of a system for reporting irregularities and response mechanisms.
- Carrying out an audit of the applicable procedures.
- Preparation of an anti-corruption code of ethics applicable in the company.
- Providing appropriate trainings.
- Conducting internal investigations.
