This week in our Sanctions Enforcement Around the World series, we bring you the view from Poland, an EU member state with a dual sanctions regime. Poland enforces the EU sanctions, in addition to enforcing national sanctions that go beyond the EU sanctions. This post incorporates data on local enforcement activity, as obtained by Baker McKenzie through access to government sources.
- What are the recent sanctions enforcement trends in Poland?
Until April 2022, Poland did not have specific procedures for enforcement of sanctions, nor penalties for sanctions violations. Poland’s penalties and enforcement were focused on customs matters.
Polish sanctions legislation, adopted in April 2022, triggered significant changes, consisting of: (i) adoption of penalties for violation of sanctions targeting Russia and Belarus, (ii) adoption of national measures applicable in addition to EU measures, and (iii) empowerment of the local tax and customs authorities to control and enforce violations of EU and national sanctions targeting Russia and Belarus.
Per information obtained from the National Revenue Administration (KAS), the competent authorities have recently initiated 103 sanctions violation inspections (60 inspections have been finalized and 43 are pending). As of 30 April 2023, one case has reached a penalty imposition phase. We expect the number of inspections to grow as authorities are gaining experience in the sanctions enforcement sphere.
Additionally, Poland is responsible for the physical protection of a significant portion of the EU’s eastern border and control over movement of goods into and out of the EU. The authorities are equipped with high class devices, including dynamic and static scales, heavy weight scales and mobile x-ray units. Per insights shared by KAS, the current geopolitical situation and measures targeting Russia and Belarus have increased the authorities’ scrutiny in conducting risk assessments applied to customs declarations, especially in the area of dual use goods, to identify possible sanctions violations.
- What are the maximum penalties for violations?
Criminal penalties of imprisonment between 3 and 15 years are possible for violations of the EU’s sanctions related to goods, technologies, services, investments and other support for Russia and Belarus (prohibited under Regulation 833/2014, Regulation 765/2006, and Regulation 2022/263), as well as the Polish ban on the import of Russian coal. No lesser gravity penalties, such as financial fines or restriction of liberty, are available for these violations.
For violation of the EU and national financial sanctions (asset freezes and prohibition of making assets available to designated persons, as well as the related information requirements and circumvention activities), financial penalties can reach up to PLN 20M (ca. USD 4,8M).
- Is there a mechanism by which companies can submit a voluntary self-disclosure of possible violations to mitigate penalties?
There is no voluntary self-disclosure tool available in Poland.
- Do you anticipate increased coordination on enforcement matters with allies?
Polish authorities do cooperate with EU bodies and sanctions authorities of other EU member states; however, the scope of such coordination or future plans is unknown. We expect coordination will be increasing to achieve the EU’s goal of coherent implementation of sanctions throughout the Union.
- What is one thing that you would recommend companies do now to get ready for increased enforcement?
As always, make sure that sanctions risk assessments are conducted and well documented, identify sanctions violations risks, and take steps to mitigate risks. Do not forget about Poland’s national sanctions.
