In our Law-now alert of 24.06.2016, we described the most important changes related to a new draft bill concerning new rules pertaining to the confiscation of criminal proceeds. Since then, the draft has been significantly amended and has been passed by the Polish parliament (Sejm). Currently the draft is processed by the Senate. All clients, in particular clients that cooperate with public sector entities, should be aware of the changes which may be introduced by the bill. The following are the most important changes:
1. Confiscation of the entire enterprise
According to the amended draft bill, it will be possible to confiscate the entire enterprise if it was used to commit a crime (but not a tax crime) or hide the proceeds of a crime. However, the confiscation may apply:
- only to enterprises owned directly by a natural person i.e. by the perpetrator of a crime or by another natural person who intended the enterprise to be used to commit a crime or to hide criminal proceeds. This is a significant change from the previous version of the draft where legal entities (such as companies) were not exempt from the new type of confiscation. Therefore, corporate entities can only be subject to sanctions and confiscation stipulated by the Act of 28 October 2002 on liability of corporate entities for criminal acts (“2002 Act”);
- only with regard to crimes pursuant to which the perpetrators gained a financial benefit worth at least PLN 200,000 (EUR 50,000).
The new draft also precludes confiscation if it would be disproportional to the value of the confiscated enterprise or the nature of the crime.
2. Compulsory company management
The amended draft provides a new interim measure to secure future confiscation, fines and compensatory measures – compulsory management over the enterprise. This measure can be applied also to corporate entities (companies) to secure future sanctions which can be imposed under the 2002 Act. The compulsory manager can be appointed based on a decision of the prosecutor. However, the prosecutor’s decision has to be approved by the court. The prosecutor has 7 days to apply for approval which should be granted within 7 days of receiving the application (otherwise the compulsory management expires). The court’s decision can be appealed i.a. by the owner of the enterprise (natural person or the company).
3. Presumption of the criminal origins of proceeds
The amended draft introduces a presumption that the property of a person convicted of more severe crimes (e.g. theft, fraud, bribery), by which he gained or could have gained a financial benefit, is of criminal origin and will therefore be subject to confiscation. As in the previous draft, the presumption applies to all assets obtained by the convicted person in the period from 5 years prior to the crime until the first convicting judgment. To avoid confiscation the convicted person or any other interested person will have to prove otherwise.
4. Extended possibility of wire-tapping and surveillance
The amended draft extends the rights of the police, Fiscal Inspection Authority and other authorities to use wire-tapping, surveillance and other operational methods to collect evidence. The authorities will be able to apply to a court for consent to apply operational methods, indicating the suspicion of additional crimes (i.a. false testimony) as the basis for the applications. Operational methods will also be allowed for the purpose of finding assets which can be subject to confiscation. If the amended draft becomes law, there may be an increase in the usage of wire-tapping by the authorities.
We will inform you of any important changes to the draft bill once it is published as law.