06.06.2022
Author: Anna Raczkowska - attorney at law trainee, Jarosław Kruk - attorney at law, managing partner
1. European and Polish provisions on sanctions
Due to the dynamic changes in Polish and European law in connection with the imposition of numerous sanctions on the Russian industry, special attention should be paid to the potential consequences of non-compliance with the sanctions and possible obstacles in business relationships in which at least one of the entities is subject to sanctions.
The discussed issues are problematic because they do not only concern corporations, but also small local businesses. At the outset, it should be mentioned that in Poland, both European provisions derived from regulations and "internal" provisions introduced by the Polish law, which impose additional supplementary sanctions, are currently being enforced.
Penalties in force in Poland for non-compliance with the sanctions are financial or criminal. A fine of up to PLN 20 million is imposed by the head of National Revenue Administration by an administrative decision. In order to be able to cancel the decision, you must submit an application for reconsideration, but again to the head of National Revenue Administration.
In accordance with Art. 143e of act on special solutions in the field of counteracting supporting aggression against Ukraine, a fine is imposed by the Head of the National Revenue Administration, by an administrative decision, in the amount of up to PLN 20,000,000. This applies to sanctions set out in EU regulations, i.e.
Council Regulation (EC) No 765/2006 of 18 May 2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus,
Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine and
Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine.
According to Art. 1 of mentioned above act - in order to counteract supporting the aggression of the Russian Federation against Ukraine, which started on February 24, 2022, against persons and entities entered on the list. List of persons and entities to whom the measures referred to in Art. 1 is kept by the minister responsible for internal affairs. The list is published in the Public Information Bulletin on the website of the minister responsible for internal affairs. The minister has the right, on his own initiative or at the request of certain authorities, to enter or remove an entity from this list. In any case, virtually every entrepreneur should follow its content on an ongoing basis. Especially due to the far-reaching consequences of the collapse of sanctions - Polish and EU.
A person or entity which, in relation to a person or entity entered on the list, does not comply with the obligation to freeze funds, funds or economic resources or the prohibition of making funds available, do not comply with the prohibition of knowingly and intentionally participating in activities the purpose or effect of which is to bypass the application of measures specified in Art. 2 clause 1 or 2 of Regulation 765/2006 or article. 2 Regulation 269/2014 are subject to a financial penalty.
According to the above law, the use, use or promotion of symbols or names supporting the aggression of the Russian Federation against Ukraine is also prohibited. Whoever violates the prohibition shall be subject to a fine, the penalty of restriction of liberty or the penalty of deprivation of liberty for up to 2 years.
Both European and Polish regulations strictly refer to the sanctions specified in the european regulations. Therefore, the Polish legislator extended the subjective scope in the case of liability for non-compliance with sanctions by entities and companies conducting business on the Polish market.
2. Specific regulation on coal in the Polish act
What distinguishes Polish regulations, however, are the sanctions related to coal. The act introduced a special mechanism for verifying the country of origin of coal. According to Art. 13, the obligation of an entrepreneur who introduced coal in Poland is to have documents - and keep them for five years - confirming the country from which the raw material comes. On the other hand, an entrepreneur dealing in coal trading is required to prepare and provide the buyer - in the form of a declaration - with information about the country of origin of the coal. This declaration is submitted under pain of criminal liability for making false statements. So, if the buyer of coal - and actually any other product covered by sanctions - has been misled by the supplier as to its country of origin, then there will be no liability.
3. Legal risk assessment in Poland
The penalties for non-compliance with the sanctions apply, in accordance with the wording of the regulations, to each person or entity. The legislator does not differentiate whether it will be applied to a large company with an international reach or local business. A mitigating measure may be the part of the provision that non-compliance with the prohibition must be deliberate.
Of course, considering the current regulations, I would recommend that in particular small, local businesses should monitor dynamic changes in the law on an ongoing basis. Large companies usually have a legal department that can easily assess and verify business risk.
