Nobody expected the Polish inquisition
On Easter Saturday, the so-called Polish Sanctions Act came into force. It enforces, inter alia, the application of EU sanction regulations, some of which have been in force since 2014, and to date, due to the lack of penalties for not applying them, were somewhat ineffective.
On Tuesday, on the basis of the act, the Ministry of the Interior and Administration published the Polish sanction lists, which are to apply alongside those issued by the EU, expanding the circle of entities and natural persons subject to sanctions.
The vacatio legis of the act? One day. To which relations should the sanctions be applied? In fact, to most business relationships, where parties act as both recipients and service providers. The penalty for non-compliance? Up to PLN 20,000,000.
To date, entities that were obliged under anti-money laundering regulations were the ones most interested in the sanctions (with a varied degree of understanding the subject matter), which intertwined client sanctions screening into their KYC processes. Currently, sanctions screening should be on everyone’s radar. Despite the fact that the topic of sanctions has been on agenda recently, hardly anyone is aware that both the act and the sanctions lists should be applied by every natural or legal person.
Thus, many entities on the market (both Polish and those subject to sanctions) faced a completely new economic situation overnight. Currently, virtually everyone should have a policy of checking whether their contractors are on the sanctions lists (although checking the lists alone may not be enough, considering that even contacts with entities not covered by sanctions, but controlled by persons / entities that are on sanction lists, may potentially be considered a violation of the law). In addition to the use of sanctions themselves (freezing and not making available funds or economic resources, which may include, for example, the need to withhold payments for services received), there are also (depending on the nature of the existing relationship) a number of issues to consider, including civil law and tax issues, which will involve the application of sanctions in practice, which have not been addressed under the new regulations.
