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Consequences for entrepreneurs - draft law on transparency in public life

Preparations for entry into force of new regulations in the field of the so-called transparency in public life, covering mainly public information areas and counteracting corruption practices in Poland, are on the home stretch. The Act on Transparency in Public Life, which is the law in question, will replace three currently applicable Acts: on Access to Public Information, on Lobbying Activities in the Law-Making Process and on Restrictions on Business Activities by Persons Performing Public Functions, introducing a number of revolutionary changes for and restrictions on entrepreneurs.

Importantly, on the one hand, the Act expands the catalogue of entities that hold public information, which is to include even housing cooperatives; on the other hand, it lowers from 50% to 20% the threshold of the share capital or shares held by the State Treasury (local government units) used to determine the so-called obliged companies - ordering all those entities, among others things, to keep a detailed register of civil law contracts they conclude; otherwise, they shall be held criminally responsible, including subject to the penalty of imprisonment of up to 3 years. It should be emphasized that the scope of definition of obliged companies also extends to include every entity whose shares (the share capital) is held in 20% by another obliged company. Thus, the subjective scope of application of this area of the Act will be much larger than before.

At the same time, the Act will make the status of management board members of obliged companies equal to persons considered persons performing public functions. This is of particular importance in terms of the obligation to file a property declaration, for instance, which will affect even the chief accountant of such a company. A ban on recruitment of persons performing public functions who have previously made decisions concerning a given entrepreneur is also worth mentioning. The application period for the ban is 3 years, and a breach of the ban is punishable by a financial penalty of PLN 10,000 up to 500,000.

In turn, a person who cooperates with authorities of the administration of justice by reporting information about offenses specified in the act that might have been committed by their employer (the so-called whistleblower) can count on special protection. Once such a person obtains, by means of a public prosecutor's decision, the whistleblower status, the employer will not be able to terminate or change to a less favourable the employment relationship (civil law contract) that binds it to this person. If the employer fails to comply with this ban, it will be obliged to pay the former whistleblowing employee monetary compensation in the amount of 24 times their monthly salary and to cover costs of their legal protection.

Moreover, along with the new Act, a very strict anti-corruption policy will be established, imposing an obligation to introduce and apply the so-called internal anti-corruption procedures on all medium-sized and large entrepreneurs (those include entrepreneurs that employed, on an annual average, more than 50 employees and achieved an annual net turnover from sales of or whose total assets of their annual balance sheet exceeded a PLN equivalent of EUR 10 million in at least one of the last two financial years), in particular through the development and implementation of:

  • a code of ethics for employees, associates and contracting parties,
  • procedures and guidelines with respect to received gifts and other benefits,
  • procedures for informing relevant bodies of the entrepreneur about offers of corruption,
  • procedures for notifying irregularities,
  • regulations preventing the use of funds of the enterprise for personal purposes of third parties.

The internal anti-corruption procedures will also include the entrepreneur’s obligations to include anti-corruption clauses in contracts as well as inform employees and associates about liability for corruption offenses. This, in turn, is to be really severe - an entrepreneur that has failed to develop the appropriate procedures or to comply with them or whose procedures are found ineffective or ostensible, is subject to a fine of PLN 10 thousand to 10 million.

Therefore, it is worth becoming well-prepared for the upcoming changes, especially considering the fact that the Act may come into force even in March of this year.

 

Mariusz Maksis, Attorney Apprentice

 

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