Loss of the property benefit of a crime committed under Polish law

The property benefit in Polish law is considered from the point of view of income, not income. Therefore, this benefit is all that the offender has obtained in connection with the offence, even if he has incurred the cost. It is important that the forfeiture of the property benefit is not treated as a criminal measure.

It is included separately in the Code and constitutes a way separate from criminal measures to punish the offender in order to discipline him and to meet his preventive objectives.

Loss of property benefit in the bill of 6 June 1997 – Criminal Code 1 ((k.k.) is treated on an equal footing with compensatory measures resulting from the scheme of the Code, but it should be borne in mind that the forfeiture, in its essence, does not fulfil compensatory functions such as attachment or compensation.

What is the position of jurisprudence and doctrine with regard to the definition of property benefit and its forfeiture?

1. Definition of the forfeiture of assets

We can talk about the loss of property benefit resulting from the crime in the context of Article 45 and Article 299(7) k.k. as a result of a crime committed.

first of these provisions states: ‘If the offender has obtained from the offence, at least indirectly, a property benefit which is not subject to the forfeiture of the listed items under Article 44(1) or (6), the court shall rule on the forfeiture of such a benefit or equivalent.

A transfer shall not be made in whole or in part if the benefit or equivalent is recoverable to the victim or another entity. In addition, the benefit of the crime is also considered to be the benefit of the things or rights which constitute the benefit.

According to second by the provision: ‘In the event of conviction for a crime specified Under section 1 and 2, the court shall rule on the forfeiture of items directly or indirectly from the offence, and on the benefit or equivalence of the offence, even if they do not constitute property of the perpetrator.

The forfeiture shall not be decided in whole or in part if the object, benefit or equivalent is to be recovered to the victim or to another entity.’

The forfeiture of a property benefit is an instrument which serves to deprive offenders of those benefits obtained from their crimes which are not subject to the forfeiture of objects. The forfeiture is therefore covered by those assets which come directly from the crime, are not objects, i.e. of an intangible nature (e.g.

property rights), as well as of money and any property benefits derived indirectly from a crime[2]. Loss of property benefit was introduced into the Polish penal code In 1997, in place of an additional penalty for confiscation of property and the current regulation Article 44 k.k.

(chapter on forfeiture) essentially duplicates the solution from the Criminal Code with 1969 3 .

Indicate that to 1 July 2015 the forfeiture of the property benefit was a criminal measure and as such a measure could have been ruled alongside the penalty which was imposed on the perpetrator[4].

„Resignation from the list of criminal measures was dictated by the lack of reasonable justification for the criminal nature of the offence (if it is not to be confiscated) and the compensation and obligation to make amends, which, in the opinion of the legislator, are typically of a civilist nature.” 5 .

Furthermore, it is important that the institution is repressive and independent rather than additional, as in the case of criminal measures.

Loss of property benefit meets two basic functions. After first, This measure aims to deprive offenders of illegal benefits and aims to prevent offences. Another important issue is that the forfeiture of a property benefit can be ruled on on its own and that the penalty directive set out in the directive does not apply to it.

Under Article 53 (k) but there are also no directives for its ruling. It is up to the court to decide on the forfeiture of benefits, but it is not dependent on the degree of guilt and the degree of social harm. The size of the property benefit is objective and the perpetrator's attitude is not relevant in this case.

The general penalty directives in relation to the forfeiture of assets shall not apply 6 , a current Article 45 k.k. states that the forfeiture is subject to both the property benefit which the offender has obtained from the offence and the fruits of the crime which he committed[7].

With regard to the above, it must be pointed out that the regulation in K.k. two various forms of forfeiture make the forfeiture in this case a complete institution.

The validity of the decision on the forfeiture of assets is the beginning of a procedure aimed at bringing the State Treasury to take over such a benefit or equivalent, and thus at the disposal of Article 45(6) k.k.

This provision states that ‘the asset benefit or equivalent benefit covered by forfeiture shall be transferred to the property of the State Treasury at the time of the judgment’. At that moment, the convicted person should voluntarily implement the criminal measure in question, and if he does not, the forfeiture should be executed[8].

The provisions of the Act of 6 June 1997 Implementing penal code (hereinafter: ‘KW’) 9 , Following an amendment from 2003, have transferred all the execution of the criminal offence, fine and attachment to the State Treasury to a tax office which conducts it in accordance with the rules on enforcement in administration, unless otherwise provided for in the Code (Article 27 (k.k.w.)[10].

In the event of a coincidence of judicial execution carried out by a bailiff and administrative officer, carried out by the head of the tax office to the same thing or property law, executions to that thing or property law shall be carried out together by the judicial or administrative enforcement body which as first he has taken the job and, in the event of failure to establish that priority, the enforcement authority which has taken the charge for the higher amount of the claim.

2. Definition of the asset benefit

The property benefit in the Polish legal order, as a benefit of the crime, is now seen very restrictively. It is all that the perpetrator has achieved in connection with the crime.

K.k.'s legislation does not provide a definition of the property benefit, which means that it should be given the meaning of the concept in the common language in the course of its interpretation for the purposes of criminal proceedings.

The asset advantage is defined as any good that is able to satisfy a specific need whose value can be expressed in money. The asset benefit may be not only the increase in assets but also the positive contracts concluded, e.g. a loan granted on favourable terms.

The achievement of the property benefit includes not only an increase in assets but also a reduction in liabilities. Among other things, the benefits of wealth are the benefits[11].

The above definition shows that the benefit is what actually leads to the expansion of our assets, or all that causes the reduction of debt. In addition, we can define the benefit as profit, profit, profit. In a completely different way, the property benefit is seen under criminal law.

3. The Doctrine Position

The doctrine defines the property benefit as a whole obtained by the perpetrator of the profits from the crime. It is referred to as ‘storage or extorted items, money and securities (benefits directly from the crime), money obtained from the illicit sale of drugs, firearms, as well as benefits obtained from the trade in direct benefits, e.g. acquired by the sale or exchange of movable goods, real estate, works of art, money, and profits obtained from the bank's investments of money directly from the crime’ 12 .

In addition, property benefits include: “any income resulting from mixing, processing and illegal property substrates; also food, drinking and the use of light paid for by burglary crimes.

A broad take-up of the property benefit should make no object of considering the cost of obtaining it, in the form of the cost of obtaining revenue, which is used by tax law." 13 .

It is appropriate to indicate, when examining the above definition, that in the author’s assessment, the “material benefit” covers everything that has been obtained from the crime rather than the difference between the funds that have been obtained and the funds invested.

The examination of the property benefit from the accounting balance sheet of the activities undertaken and their economic performance appears to be unfounded.

If the perpetrator voluntarily used his money, among others, to obtain drugs, contrary to the legislation, for example, of the Anti-Drug Act 14 , It should not be expected that some of the revenue generated from this will be reimbursed to him, since the legality of holding funds is consumed by an unlawful act constituting a criminal offence[15].

This view is reflected in the case-law, but it should be noted that the definition of the asset benefit in all cases (after being established on its legality) should, however, be considered from the perspective of income rather than income as referred to below.

4. Court line

In the case-law, the definition of the property benefit has been established over the years; it is impossible to find a judycate formulating the thesis contrary to that presented here.

From a practice point of view, therefore, the property benefit should be defined as all that the perpetrator has obtained as a result of the offence, which is due to the very nature of the criminal activity to which the market rules on the balance of profits and losses do not apply.

In accordance with the resolution 7 Supreme Court judges from 15 February 1977: „Advantage in Mind Article 36(3) k.k. is any unlawful property benefit, if only to obtain it for the perpetrator or who else was intended to act as perpetrator of the offence’ 16 .

The above interpretation of the concept of property benefit was resolved after the legal question as follows: ‘Is the property benefit in accordance with Article 36(3) k.k. is understood to be any causal advantage to the offender or to anyone else (Article 120(3) (k.k.) or only a property advantage of an unlawful nature and increasing in a wicked way assets or income?’ This legal issue has been resolved explicitly – this line of case law is also being continued now and is reflected in the current case law.

Supreme Court in its decision with 26 August 2010 stated: ‘Contribution of a property benefit within the meaning of Article 45(1) k.k., to be forfeited, shall also include any expenditure incurred by the perpetrator to obtain the object resulting from the crime." 17 .

The statement of reasons for this ruling states that the amount of the property benefit will be ‘not deducted from the amount of expenditure: forger of documents, incurred in printing them (paper, paint, etc.) or to the producer of drugs, to produce them (for apparatus, raw materials, etc.).

The legal origin of these expenditures (including expenditure) is irrelevant. The advantage in the form of created objects will be completely unlawful (unrighteous) and will be completely lost.

Therefore, the formula “material advantage not subject to forfeiture of the listed items under Article 44(1) or (6) k.k.’ it follows first that this advantage must be equivalent (equivalent) to those items. So the property benefit in question under Article 45(1) in princ.

k.k., it is not to be understood as merely income (profit), that is, surplus revenue over expenditure. This benefit is the perp's income.

Therefore, if the drug manufacturer sells them before they are detained, there will be no doubt that the loss of the price obtained should be ruled out, without reducing it by expenditure, such as legal origin, on the production of drugs.

Consequently, any subsequent buyer (trader) who has disposed of the drugs will be subject to the forfeiture of the asset benefit in the form of its price (including the margin), i.e. without deducting the costs incurred for their acquisition. Another will be the size of the asset benefit only of the intermediary.

If the forfeiture is subject to the advantage achieved, it will be, for example, only the payment that the perpetrator obtained for the transfer of drugs for further marketing (payment for mediation). However, if he was detained with these drugs, they would also be lost, except on the basis of Article 44(6) k.k.

It is even different to calculate the property benefit forfeited by the commissioner, i.e. the person who undertakes to sell drugs and who receives the price for subsequent parties marketed drugs.

This will include a commission, if the Commissioner has received it in advance, the price obtained for the drugs already disposed of (a property benefit achieved for someone else – Article 115(4) (k) and other drugs not yet placed on the market – Article 44(6) k.’.

On the other hand, the Court of Appeal in Poznań, in the justification of the judgment of 21 December 2016 stated: ‘By virtue of the asset advantage, which is the basis for the decision of the measure, Article 45(1) k.k., the property components obtained by the perpetrator as a result of the offence in question (unless, of course, the items listed above are forfeited) under Article 44(1) and (6) k.k.).

Measure envisaged under Article 45(1) k.k. provides for the possibility of forfeiture not only of a direct but also of an indirect crime.

An indirect asset benefit can be defined as a whole of the benefits obtained from the trading of objects, property rights, receivables, etc., derived from the crime, including profit earned by the perpetrator. In the definition of the property benefit to be forfeited from Article 45(1) k.k.

is not only the income of the perpetrator, but also the costs incurred to achieve this income. In other words, the property benefit is understood to mean the entire income of the perpetrator obtained from the offence." 18 .

In the next judgment of 31 March 2015 On the other hand, the Court of Appeal in Krakow stated: "The forfeiture of property benefits resulting from the crime covers all of the benefits obtained from the prohibited act, not only the profit remained after deduction of inputs from the price obtained, but also the costs of buying drugs, driving costs, paying for couriers or others.

A crime is not an economic activity in which the cost of obtaining it is deducted from revenue for the purpose of calculating profit; such rules can only be applied in legal activity. The asset benefit of an illegally selling drug dealer is all the assets gained from the crime, not just the profit achieved.” 19 .

Each of these judgments requires that the property benefit be defined as a whole of the benefits which the offender has obtained in connection with the offence. The property benefit cannot be defined as the profit which the perpetrator remained after the deduction of his expenses.

The judicature clearly states that the offence committed is not a legitimate economic activity to which the provisions governing the deduction of the costs of carrying out such activity apply. For many years the interpretation of the concept of property benefit has been invariable.

It should be stressed here that the uniformity of the position to define the concept of property benefit is pointed out by the judgment of the Court of Appeal in Krakow, which found it inappropriate for its earlier ruling on the concept of property benefit from an income perspective[20].

It is worth noting, referring to the above-mentioned criminal proceedings, that there are cases where the perpetrator committed a crime, but that he did not receive or receive any benefit in the light of the circumstances of the case, but not in the sense that the court defines it.

This is primarily related to the reasonable expenses which the perpetrator incurred in order to profit from the crime.

For example, such a case which would be worth considering in terms of the assessment of the property benefit is the situation in which the offender receives an order to carry out a certain activity as a result of a crime, and the value of the order is set at the amount previously determined.

He then performs a number of activities (pays the materials, hires employees, couriers, transport) which are to demonstrate that the order was executed correctly and the costs are real, documented and actually incurred. As a result of these activities, the perpetrator did not obtain the total amount from the order, only part of it.

Therefore, it should be considered whether it would be appropriate to see the definition of the property benefit from the point of view of income rather than income, since the actual profit from the crime may be many times lower than the profit defined in the case law.

The consideration of the income benefit is justified only for reasons of prevention, i.e. punish the perpetrator and deter him from committing crimes in the future.

However, there are more arguments in favour of income benefits. First of all, because the perpetrator should not bear the cost again, which has been legally settled and incurred.

If the perpetrator is able to document the incurred costs of hiring employees (VAT invoice, payment of health, social insurance contributions per employee, income tax advance), material costs (VAT invoices confirmed by bank account statements, that they have been paid) or transport costs (VAT invoices confirmed by bank account statements, that they have been paid from the perpetrator's account), the forfeiture of the property benefit should include an amount less the legal costs incurred.

This also goes against the principles of social coexistence and social justice.

The most common loss of property benefit is ruled on cases where drug trafficking is the subject. In such cases, the court shall rule on the forfeiture of the total amount received by the offender in connection with the distribution of drugs. The costs of buying drugs or any other expenditure shall not be deducted.

Consequently, if the perpetrator has acquired drugs for 1,000 PLN, to sell them for 1,100 PLN, that according to the court’s position, its asset benefit is the amount 1,100 PLN, even though his profit was actually 100 PLN.

Such an established position in the case-law is unfair, primarily because the lowest in the distribution chain (so-called dealers) because of the level of the margin added by subsequent suppliers, in the light of the ruling of the lapse of the judgment they achieved the highest advantage, even though in fact it was the lowest.

On the other hand, and the parties to the producers and wholesalers for the same quantity of the drug sold will be declared forfeit in the lowest amount, since the forfeiture will benefit from first the transaction, which is at the lowest price, contrary to any standard that should apply in the legal system, the formation of criminal repression based also on the degree of social harm and the principle of individualisation of criminal liability.

The loss of the total amount obtained will also include those who have chosen to cooperate with law enforcement authorities, revealing drug suppliers and the amount of the asset benefit achieved by all trading parties, enabling them to decide the forfeiture of their benefit.

In the case of each of these individuals, the forfeiture of the full amount of the asset benefit will be ruled out, even though none of them has obtained such a benefit, but only their aggregate profit is made up of the asset benefit of the definition adopted in the case law.

A perp who chose to reveal details of criminal cooperation on the ground Article 60 K.k. bears, in principle, a milder penalty.

However, Article 60 kk does not apply to the institution of the forfeiture, and therefore the prospect of ruling the forfeiture of a huge amount which the perpetrator has never achieved as a result of the crimes committed by him gives rise to a temptation to conceal essential facts from law enforcement authorities and undermines the sense of the institution in question.

5. Summary

Loss of property benefit is an institution that was introduced into the Polish legal order with a penal code with 1997

Previously, there was an institution for confiscation of property which should not be identified with the forfeiture of the property benefit, since the confiscation constituted a stand-alone penalty, and was also ruled against any crime regardless of its value.

The forfeiture of the property benefit is a sanction independent of penalties or criminal measures, which is why it is included in a separate chapter of K.K. This institution shall apply where the perpetrator has obtained, at least indirectly, an asset advantage.

Furthermore, in its ruling, the accounting possibility of deducting the expenses incurred by the perpetrator does not apply. However, it should be considered on a case-by-case basis whether property benefits should not be treated as income, taking into account in particular the legal costs incurred and documented. Such a position is rational and meets the requirements of social justice.

__________________________________________________