Polish anti-bribery laws - revolutionary changes

The function of this client alert is to inform you that the Polish anti-bribery law is shortly expected to be thoroughly amended. The changes will, not only concern public entities, but will also have a fundamental impact on private sector business. The Act on the Transparency of Public Life is at an advanced stage of public consultation. This revolution will introduce multiple new obligations and restrictions on companies and their management.

Obligatory internal anti-corruption policies

According to the draft Act, medium-sized entrepreneurs and larger will be obliged to use internal anti-bribery procedures to prevent persons acting on behalf, or on account, of this entrepreneur from committing criminal offenses which have been qualified as corruption (article 67 (1) of the Act).
The bill creates the obligation to introduce internal anti-corruption policies in companies with at least 50 employees, and a yearly net turnover of more than EUR 10,000,000.

The policies would have to contain organizational, technical, and human resources measures (e.g.) trainings, such as:

1. preventing the creation of mechanisms which would allow for the financing of costs providing material or personal benefits,
2. including clauses in agreements which stipulate that no part of the remuneration would be intended for covering the costs of providing material or personal benefits,
3. the preparation and application of multiple internal policies, such as:
   1. an anti-bribery code as a declaration renouncing corruption, signed by each employee, associate, and another business entity acting on behalf of the company,
   2. procedures and guidelines concer-ning gifts and other benefits received by employees,
   3. procedures for informing the appropriate company's bodies about corruption propositions and how to proceed with this information.

Companies could be subject to a fine of up to PLN 10,000,000 (approx. EUR 2,500,000), if they do not introduce these policies, or do not apply them, or the applied policies are a sham, or ineffective, and any persons acting on behalf, or on account, of these companies were charged with a corruption crime. These charges would also automatically result in the Chief of the Anti-Corruption Bureau investigating the company’s internal policies.

Should this sanction be imposed, it would automatically result in a company being prohibited from applying for a public contract for a period of five years after the sanction was applied.

Please note that these sanctions are separate from a specific natural person’s, or company’s criminal responsibility for the corruption itself. These are administrative sanctions imposed by the President of the Office of Competition and Consumer Protection (UOKiK).

Public register of civil contracts

The bill obliges the entities concerned to maintain a register of concluded civil contracts while indicating the group of entities obliged to maintain it (art. 9(1) of the bill).

As a rule, the register is planned to be available on a special website and consist of all the civil contracts concluded in a written form and resulting in the expense of at least PLN 2,000 (approx. EUR 500). The register would identify, among other things, the parties to the contracts, their subject, and their value.

The entities concerned are:

1. entities from the public finance sector,
2. state banks and enterprises,
3. research institutes,
4. obliged companies, which are those where:
   1. 20% of the share capital or stock is owned by the State Treasury, a local government unit, a public entity, or a local government entity, or
   2. the decisive influence on its activity belongs to the entities specified in the point above.

Declaration of financial interests of the management of obliged companies

The project significantly increases the scope of those persons who would be obliged to regularly submit a declaration of financial interests. The project stipulates that this obligation would also concern any representatives of an obliged company who are:

1. members of the management body,
2. members of the supervisory, or control body,
3. proxies (prokurent),
4. liquidators, or
5. principal accountants.

Furthermore, the Chief of the Anti-Corruption Bureau would be allowed to call any person performing public functions (doctors, for instance) to submit a declaration, even if they are not specified in the Act, or obliged to do so regularly.

Limitation of the protection of trade secrets in administrative proceedings

Certain administrative proceedings are to be made public. This means that information about their course and the content of submitted documents can be accessed by an unlimited number of people. This could lead to the admissibility of disclosing information that would otherwise be subject to protection as a trade secret.

The project stipulates the exceptions when a trade secret would not be protected in the listed proceedings conducted on the grounds of, among other things:

1. the Construction Law (the construction project would, however, remain protected by the trade secret),
2. the Real Estate Management Act,
3. the Environmental Law,
4. the Act on Reimbursed Medicinal Products, Foods for Special Medical Purposes, and Medical Devices (the risk sharing instruments would, however, remain protected by the trade secret).

Moreover, a trade secret would not be protected in proceedings for the issuance of concessions or permits.

Remaining issues

Aside from the above, the project introduces many different regulations, including:

1. the institution of whistle-blowers, and their protection,
2. new lobbying rules,
3. new rules for the prevention of conflicts of interests including restrictions in combining different functions in the case of the management of obliged companies.

The project is in the public consultation stage and can still be changed; however, this indicates the general direction in which the anti-corruption law is proceeding in Poland. We will continue to monitor the progress of the works on the bill and inform you about their results.