Poland: Draft act on transparency in public life – new information obligations and prohibitions – part 4

Poland
Available languages: PL

The draft law on transparency in public life, which we have written about in our Law-Now Alert also introduces important information obligations and prohibitions on merging functions which may cover not only public entities but also businesses that are not controlled by the state or the government. The catalogue of entities that may be affected by the new obligations and prohibitions includes so-called obliged companies. This includes companies in which public entities hold directly or indirectly at least 10% of the share capital or number of shares, for example, a company in which a bank, whose major shareholder is the State Treasury, holds more than 10% of shares.

1) Additional information obligations

The proposed solutions provide for broader access to a considerable amount of information on individuals and public entities, which will be widely available, i.a., through a centralised register. The proposed regulation envisages, among other things:

  • an obligation to maintain a public register of all civil law contracts concluded by the entities mentioned in the act. Obliged companies will be able to make some information confidential in order to protect their interests.
  • an obligation on persons listed in the act (in particular receivers and members of the management and supervisory boards of pension funds) to submit asset declarations to be made publicly available on the internet. This obligation also applies to members of management boards, as well as members of supervisory or audit bodies of obliged companies, and to proxies, liquidators and chief accountants. For example, if a partially state-owned company buys 10% of a company’s shares, its president may be required to make an asset declaration.

The new regulation is also supposed to authorise the head of the CBA to request any person fulfilling a public function and any employee of an obliged company to submit an asset declaration once a year within 14 days of receipt of the summons.

Failure to comply with the information obligations can be subject imprisonment for up to 5 years or an administrative fine of up to PLN 100,000.

2) Prohibitions arising from the obligation to avoid conflicts of interest

The draft act envisages the introduction of a wide range of prohibitions and restrictions on merging specific functions listed in the act with other paid activities. These prohibitions also cover members of the management boards of obliged companies.

For example, the president of an obliged company may not be employed by or accept orders from any other company. The only exception would be functioning as a member of the management board of a subsidiary without pay. In addition, after being dismissed from the board, he may not take up employment with, among others, a client of the obliged company for three years. The three-year ban is also intended to cover the possibility of companies employing administrative officials who have decided cases concerning those companies.

Anyone who breaches the prohibitions will be subject to criminal liability and business entities that employ such persons will be subject to an administrative fine of up to PLN 500,000. In addition, the election or appointment of a person to the board of a company or other legal person contrary to the above prohibitions will be invalid.