Pending criminal proceedings involve risks not only for the potential perpetrator, but also for their counterparties. This is due, on the one hand, to the possibility of questioning them, demanding the release of documents and, on the other, to the risk of losing money. How is this possible? The basis in such cases are the provisions of the Criminal Code on extended confiscation. In view of the serious consequences, every entrepreneur, board member or other person managing a business entity should be familiar with them.
What is extended confiscation?
The authorities may verify to whom the perpetrator transferred the property during the five years prior to the offence up to the moment of even a non-final judgment. Thereafter, if the person or company fails to show that it did not know or could not have supposed that the property, even if indirectly, originated from a criminal act, the court may order forfeiture or restitution from its assets. It does not matter in the least whether the person acting on behalf of the entity committed the criminal act or in any way assisted in its commission. All that matters is whether he or she received funds from the perpetrator of the offence in good faith.
Practical problems
This is a convenient tool for the judiciary, but an onerous one for the subject to whom the funds have been seized – the burden of proof is on them. This means that they have to show – with appropriate evidence – that at the time the funds were accepted, they could not have suspected that the funds were the proceeds of crime. This is particularly difficult given that the entity whose property has been seized does not have party status in the proceedings. Its ability to shape the outcome of the trial is therefore significantly limited.
The subject can only lodge a complaint against the decision to block or secure the funds. However, they do not have the possibility of requesting specific evidence, asking questions of witnesses or filing an appeal or cassation complaint against judgments. The legislator has only provided for the possibility of taking civil action and filing a lawsuit that the seized property is not subject to forfeiture.
That is why it is wise to take preventive measures such as implimenting KYC (Know Your Customer) procedure. Looking out for some red flags when it comes to new customers can save money and time in the future.
Full article is available in Polish here.
