Sanctions, which are a strong weapon against the Russian Federation, have been introduced from the very beginning of the armed conflict. Their number and severity increase overnight.
They are an economic weapon, and their main task is to weaken Russia's economy, which is consequently intended to lead to a lack of sufficient financial resources to wage war in Ukraine.
Following the EU's sanctions packages, a law on specific solutions to counter violence against Ukraine and to protect national security was passed in Poland.
[1]
The Act provides for additional regulations to enforce the level of enforceability of the relevant orders and prohibitions on economic trade with Russia and Belarus, which have already been adopted at European Union level.
one of the most important provisions of the Sanctions Act is to create an official list of entities subject to sanctions. The list is headed by the Minister of the Interior and Administration. It aims to complement the circle of entities subject to sanctions.
The consequence of the presence on the list of sanctioning entities is, among others, freezing of assets and transactions, exclusion from public procurement procedures. The list can be read on the BIP of the Ministry of Interior and Administration[2].
The sanctions were further supplemented by an immediate ban on imports of coal from Russia and Belarus, and a statutory ban on the use, use or promotion of symbols or names in support of the Russian Federation's aggression into Ukraine has been established.
Penalties introduced by the Sanctions Act are very high and may be severe for any entity on which such penalties have been imposed.
Infringement of the findings of EU or national sanctions entails a risk of a financial penalty or imprisonment in the case of natural persons involved in transactions subject to sanctions or apparent transactions intended to circumvent the rules.
Administrative fines of up to 20,000,000 PLN may be imposed in the event of failure to comply with the obligation to freeze assets in relation to listed entities, breach of the ban on imports of coal from Russia and Belarus or apply for a public contract.
On the other hand, the prison sentence that may be imposed on individuals concerns a breach of the embargo on the purchase of coal originating in Russia or Belarus and possible measures to circumvent the sanctions.
In view of the severity of the financial penalties for breaching the criminal provisions on trade with Russia and Belarus, every effort must be made to ensure that there is no unintentional breach of the existing restrictions. In the event of cooperation with a new business partner, it is imperative to establish the beneficiaries of the entity. An additional guarantee may be provided by a properly prepared declaration from counterparties.
[1] Act dated 13 April 2022 on specific solutions to countering violence against Ukraine and to protect national security. (Journal of Laws of 2022, item 835)
[2] https://www.gov.pl/web/mswia/lista-osob-i-podmiotow-objetych-sankcjami
Author: Darya Bannaya
Younger tax consultant. Graduate of Law at the Faculty of Law and Administration of the University of Warsaw, graduate of Global Business, Finance and Management in Warsaw School of Economics. Winner of the Ministry of Finance competition “Tax to Leaders” 7. edition.
Conducting trainings and conferences for foreigners in tax aspects of conducting and establishing business in Poland. He specializes in tax law, advising clients on current matters relating primarily to income taxes. Author and co-author of a tax law publication.