Criminal law in a Polish subsidiary

One doesn’t like to talk about delinquency within their own company. However, every year this damage affects companies in the region of several million PLN. This involves both thefts in the company itself as well as criminal offences, which are closely connected with the participation of the enterprise in economic activity. In particular crimes of fraudmisappropriationembezzlementcorruption (e.g. bribery and corruption in the course of trade) as well as tax offences (such as issuing fictitious invoices) and violations of the fair competition. In addition, there are more and more cases of so-called cyber-crime, which means crimes committed by taking advantage of modern information technology in particular through the Internet.

The subject of economic crime does not spare Polish subsidiaries of German and international companies. Yet this is not a phenomenon of the Polish market, but an international problem. The difference between the subsidiaries acting in Poland and the parent companies abroad, is however the question of dealing with the issue of crime in their own company. While in Germany the internationally active corporations, as well as the larger medium-sized companies have already had to deal with this issue for a number of years, this topic has been picked up so far in Poland mainly by Global Players in their local, Polish companies. The statistics of recent years show though that even in Poland economic crime is increasing.

The confrontation with this specific area of crime should however not be left only to the relevant government authorities. Especially in the area of prevention, much can be done already within their own company, before the relevant offenses are being committed. If irregularities in the company are discovered by accident or as a result of internal controls, the milk had been already spilt.

It has emerged in the past that in the most cases of economic crimes as discussed herein, the perpetrators are own employees. This concerns the simple workers and employees, as well as the superior managers and managing directors or the members of other corporate bodies. As a result of these considerations, it makes sense that the parent company considers how preventive measures could look like in the Polish subsidiary. An increasing importance within this frame is given to the so-called compliance management.

Compliance in a Polish subsidiary

The English term compliance stands for observation of certain regulations. In the area of corporate governance, this means compliance with corporate policies aimed at preventing crimes in connection with the exercise of a commercial activity. The experiences of the past years show that where a company tailored compliance system has been introduced and is being “lived” by the managers and the employees, it significantly decreases the number of offences in the company. The positive consequences for the company are clear: reduced financial loss for the company, as well as a significantly lower risk of loss of company image, as well as the brand under which the company sells its products or services on the market.

When establishing a Compliance-System, one should always consider the characteristics of the local market. The involvement of own employees of the Polish subsidiary is one of the most important conditions for success of the measures implemented in the area of compliance in Poland. It is not only a matter of explaining the in-house guidelines to the employees. More important is the question of where and to whom shall the employees, who have become witnesses of irregularities, report this information to in a protected manner. Even 25 years following the end of the communist era, in particular older employees tend to relate a disclosure of sensitive information about other employees or even the supervisor with the denunciation being common in the communist period.

It is therefore important to develop awareness among the employees that economic crimes committed within the own company are on the one hand no peccadilloes, and on the other hand that a culture of compliance “lived” by every employee significantly minimizes the risk of image losses and financial damages for the company. This in turn is benefitting for all employees of the company.

How can we help you?

We gladly advise you on the establishment of a compliance system tailored to the needs of your subsidiary. This starts with an analysis of the current condition of your company. The results of this assessment are then incorporated into the in-house guidelines to be established, relating both to your employees and executives, but also to the handling of your suppliers and business partners. We attach particular importance to the implementation of the developed compliance system involving your employees. In this context we will also gladly be at your disposal as an external part of a whistleblower system (Ombudsman).

In a whistleblower system, the task of the Ombudsman is to receive information from whistleblowers as external contact and verify whether it is in fact an issue that could constitute a criminal offence. If this is the case, then after having received proper authorization of the whistleblower, the Ombudsman may report this information to an appointed compliance panel at the Polish subsidiary or the parent company. The Compliance Department analyzes the facts and decides on the measures to be taken.


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