Liability of collective entities – higher penalties, mandatory compliance

Poland: Supervision of compliance in an organization will cease to be a ‘may’ and will become a ‘must’

New regulations establish greater responsibility of collective entities for crimes committed in connection with their activities. A criminal offence may be committed by an intentional act or by failing to observe the due diligence required in the given circumstances.

The project assumes responsibility for non-implementation of solutions aimed at counteracting significant risks of committing a criminal offence. Such a broad scope of responsibility also translates into the obligation to establish procedures defining standard operating procedures in case of irregularities and the obligation to appoint a person (a so-called whistleblower) to oversee corporate observance of the law.

In order to motivate entities to adapt to the new legal requirements, the legislator has tightened sanctions for failure to adapt. This includes extending the catalogue of prohibited acts covered by the regulation and wide-ranging preventive measures, including a ban on competing for public procurement or a ban on performing certain activities, and even introduction of forced administration for the duration of the proceedings.

The essence of the proposed amendments is to eliminate the need for conviction of a natural person before establishing liability of a related collective entity. This means that the prosecutor will be able to pursue a case against a collective entity while pursuing proceedings against an individual. This is an important change because it should significantly shorten the duration of proceedings.

Additionally, the draft introduces the requirement for internal corporate investigation. This applies where the information reported may be relevant to a collective entity’s liability for a criminal offence.

In addition, the courts will be able to counteract negative consequences for whistleblowers. This includes, for example, the possibility of imposing an obligation to reinstate a person if cooperation with that person has been terminated for reasons connected with their having signaled irregularities.

The proposed act will legitimize the application of compliance solutions, which until now could only be found mainly in large international organizations.

Currently, the draft bill is at the stage of working its way through the Parliament ‒ it has been submitted for consultation. It is possible that the Act might be published in 2019 with entry into force taking place within six months of publication.


Source: draft bill on the liability of collective entities for criminal offences subject to penalty and amendments to certain laws

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