Corporate criminal liability becoming a reality

An implementation of effective corporate criminal liability, emphasising the role of internal controls, defining a comprehensive legal framework for whistleblowing schemes and imposing penalties of up to PLN 60m – these are the main points of new draft legislation on criminal liability of collective entities enacted by the Polish government on 22 October 2018. If adopted by the Parliament, the draft will replace the provisions of Polish law currently in force, based on which it was difficult for law enforcement authorities to attribute criminal liability to collective entities in Poland.

The draft provides that corporate criminal liability may be imposed on collective entities not only if the offence was committed through an act or omission of an individual acting on behalf of the entity, and regardless of whether the individual responsible for committing the offence had been sentenced or not. The liability may be triggered based on a mere failure to exercise diligence required under the given circumstances, if it was possible to foresee the likelihood of committing an offence, or if improper internal controls (such as a failure to implement appropriate safeguards to prevent the offence) facilitated the commitment of the offence. Consequently, corporate entities operating in Poland will have to make sure that appropriate internal compliance and anti-corruption policies are in place, as well as appoint individuals or units responsible for compliance in order to reduce the risk of being held accountable under the new legislation. In particular, the new procedures will have to ensure the protection of whistleblowers and impartial investigation of their allegations.

Another new solution introduced by the draft is based on the concept of deferred prosecution agreements. According to the proposed legislation, in certain circumstances the authorities can agree to discontinue prosecution proceedings if collective entities self-disclose offences, provide evidence of individual misconduct, agree to compensate victims of the offence and pay a penalty of up to PLN 3m.

The catalogue of penalties for non-compliance with the new provisions is wide and includes financial penalties of up to PLN 60m, a ban on participating in public tenders or even liquidation of the relevant collective entity.

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