22.04.2022
Author: Anna Raczkowska - attorney at law trainee, Jarosław Kruk - attorney at law, managing partner
So far, Poland has only used sanctions proposed by the European Union bodies, these are sanction packages aimed at weakening the Kremlin's ability to finance the war and causing clear economic and political costs for the Russian political elite responsible for the invasion.
The Polish government, however, took steps to strengthen sanctions at the national level. On March 30, 2022, a draft was submitted to the Governmental Parliament, which envisaged freezing the property of persons and entities. These entities will be entered on a special list, which will be kept by the Minister of the Interior and Administration. According to the information provided by the government, the penalty for failure to comply with the decision to freeze assets will amount to PLN 20 million. The idea is to create a list of persons and entities, separate from the lists contained in European Union regulations, against which the measures contained in the EU regulations may be applied.
The draft act assumes that the freezing of funds will concern, among others: cash, checks, money orders, deposits placed with financial institutions or other entities, securities, bonds as well as stocks and shares. In turn, the freezing of economic resources will apply to all kinds of assets, tangible and intangible, movable and immovable, which are not funds but can be used to obtain funds, goods or services. Entities included in the list will not be able to implement public procurement.
However, the draft law on special solutions in the field of counteracting aggression against Ukraine and serving the protection of national security may still be subject to changes and a special interest is aroused by the self-amendment introduced to the bill by deputies, which stipulates that the sanction list may also include "persons and entities constituting a threat to the national security of the Republic of Poland ”. This premise is general and vague, there is a risk that, on its basis, the sanctions list could also include Polish citizens and companies, against whom the accusation of "threats to state security" would be brought.
The draft act indicated that while some provisions of EU regulations are directly applicable (e.g. the obligation imposed on all entities in the country in the scope of freezing and not making funds and economic resources available to entities indicated in annexes to the regulations), some require implementation of regulations at the level of domestic. This applies in particular to the issuing of permits to release certain frozen funds or economic resources or to make them available, as well as sanctions applicable in the event of violations of the provisions of regulations and issues related to customs and fiscal control of compliance with these provisions, including the determination of authorities competent to apply the regulations.
The position of the Polish Association of Entrepreneurs and Employers regarding the proposed act is also important. The problem may arise after the bill is announced and enters into force. In the opinion of the ZPP, the act does not contain detailed information on how entrepreneurs should fulfill their obligations under the act, how they are to behave towards entities included in the list under ongoing contracts. It is emphasized that Polish companies have information on the procedure in which they are to freeze funds, secure property and potential liability for loss of value, damage or destruction. Guidelines in this regard seem necessary to avoid the potential risk that may be associated with even inadvertent breach of the provisions of the Act. Therefore, it is important for entrepreneurs to verify their contractors, both current and future, on an ongoing basis in terms of potential sanctions imposed on them by the act.
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