Important changes proposed for corporate criminal liability

Poland
Available languages: PL

The Polish Ministry of Justice has presented a bill that will radically change the rules of corporate criminal liability and significantly increase the range of risks for businesses. The previous regulation was rarely applied (with only a dozen or so cases per year) and relatively low penalties were imposed that usually did not exceed tens of thousands of zlotys.

The bill currently being drafted is likely to include the following changes:

  • A radical increase in penalties: a fine of between PLN 10,000 to PLN 30,000,000 (instead of the maximum of PLN 5,000,000) and raising the fine limit from 3% of the corporate entity’s revenue.

  • A significantly wider scope for the risk of corporate criminal liability: according to the draft, companies will be punished for all crimes and not only those included in a closed catalogue as in the current regulation.

  • The public prosecutor will no longer have to wait (as is currently the case) for the final conclusion of proceedings against individual offenders and will be able to initiate proceedings against the company at the same time (removing the requirement of a prior conviction of an individual in order to proceed against a company).

  • Merger and transformation will not prevent the application of penalties for acts committed prior to the merger or transformation.

  • Corporate criminal liability is to apply only to large enterprises: the draft amendment excludes the following entities (among others) from the definition of a corporate entity subject to liability – those employing (in at least one of the last two financial years) fewer than 500 employees or having an annual net turnover not exceeding EUR 100 million, and who are not a micro-entrepreneur, a small entrepreneur or a medium entrepreneur. The idea behind this is to focus on large companies.

  • The possibility for a company to avoid liability by self-reporting a crime indicating the individuals responsible and redressing the damage caused by the crime.

The draft is currently at an early stage: the opinion phase. We will report on the details of the amendments and any potential changes to the draft in future alerts.

For more information on this bill and how changes to corporate criminal liability in Poland could affect your business, contact your CMS client partner or local CMS experts.