EU sanctions framework – impact on Polish

A Warsaw-based trading company receives an order from a long-standing Central Asian partner. The goods are dual-use items. Three days before shipment, a compliance check reveals the buyer appears on the EU consolidated sanctions list. The contract is frozen, the advance payment is locked, and the company faces potential criminal exposure – all because no one mapped the sanctions framework against the supply chain at the outset.

The EU sanctions framework directly affects every Polish business that trades goods, provides services, or moves capital across borders. Regulations adopted by the Council of the European Union apply in Poland as directly binding law, without any implementing act. Violations carry penalties under Polish criminal and administrative law, including personal liability for directors and forfeiture of assets involved in the breach.

This guide walks through the core mechanics of EU sanctions as they apply in Poland: the legal sources, the screening obligations, the three most common business scenarios, and the steps a company should take when it discovers a potential breach. It also addresses the procedural side – derogations, asset freeze notifications, and the role of Polish authorities in enforcement.

How does the EU sanctions framework operate in Poland?

EU sanctions are Council regulations published in the Official Journal of the European Union. They take effect on the date of publication and bind all natural and legal persons within Poland's territory, all Polish nationals abroad, and all entities incorporated under Polish law. The Ministry of Finance (Ministerstwo Finansów) and the General Inspector of Financial Information (Generalny Inspektor Informacji Finansowej, GIIF) are the primary domestic enforcement authorities. The Office of Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów, UOKiK) plays a secondary role in market oversight.

The framework operates through three instruments. Asset freezes prohibit dealing with funds or economic resources owned or controlled by listed persons. Trade restrictions ban the export, import, or transit of specified goods and technologies. Service prohibitions cut off legal, financial, and advisory services to designated counterparties. Each instrument has its own scope, and the same transaction can trigger more than one simultaneously.

Polish businesses tend to underestimate the extraterritorial reach. A Polish entity providing consulting services to a foreign subsidiary of a listed group – even if the subsidiary itself is not listed – may still breach the prohibition on making economic resources available. The concept of "ownership or control" under EU sanctions law is wide: a 50 percent shareholding threshold applies, but indirect control through management influence can also suffice.

Screening obligations are not explicitly mandated by EU regulations for all businesses. However, the ustawa o przeciwdziałaniu praniu pieniędzy i finansowaniu terroryzmu (Anti-Money Laundering and Counter-Terrorism Financing Act, AML Act) imposes sanctions screening duties on obliged entities – banks, payment institutions, legal professionals, and others. For companies outside that list, screening is a risk management imperative rather than a statutory duty. Failure to screen does not, by itself, constitute a violation, but proceeding with a prohibited transaction does – regardless of intent.

What are the main compliance risks for Polish exporters and importers?

Polish exporters face the sharpest exposure. Dual-use goods – items that have both civilian and military applications – require an export licence from the Ministry of Development and Technology (Ministerstwo Rozwoju i Technologii) even when the end-user is not listed. Since 2022, the Russia-related sanctions packages have added hundreds of product categories to the restricted list, with a general threshold of EUR 1,000 per shipment for certain electronics. Exceeding that threshold without authorisation is a criminal offence under Polish customs and export control legislation, carrying imprisonment of up to three years.

Importers face a parallel risk. Goods originating in sanctioned territories – or goods that have been re-routed through third countries to obscure their origin – can trigger asset freeze violations if the underlying transaction funds flow to a designated person. Circumvention through intermediaries in Kazakhstan, Turkey, or the UAE is an active enforcement focus of the European Commission. Polish customs authorities, operating under the National Revenue Administration (Krajowa Administracja Skarbowa, KAS), are required to detain shipments where sanctions exposure is suspected.

Three scenarios illustrate the practical risk profile. First, a manufacturing company in Silesia sells machine parts to a distributor in a third country. The distributor re-exports to Russia. The Polish exporter did not know – but end-use clauses in the contract and due diligence on the distributor's customer base are now expected. Second, an IT firm in Warsaw provides software maintenance remotely to a client whose parent entity was listed six months after contract signature. The firm must suspend services immediately upon listing, even mid-contract. Third, a foreign investor acquiring a Polish company discovers the target has an outstanding receivable from a designated debtor. That receivable is a frozen asset under EU law and cannot be collected or assigned without a derogation.

We secured a full reversal of a customs detention order for a manufacturing client in Lower Silesia (autumn 2025), after demonstrating that the goods fell outside the restricted category through a technical classification review. The process took 47 days from detention to release.

How should a Polish company respond when it identifies a potential sanctions breach?

Speed matters. EU sanctions regulations require that any funds or economic resources belonging to a listed person be frozen immediately upon discovery. The GIIF must be notified within a short window – domestic guidance indicates notification should occur without undue delay, and Polish practice treats 24 hours as the expected standard for financial institutions. Non-financial companies are not subject to the same statutory deadline, but prompt notification is strongly advisable to establish good faith.

The response sequence should follow four steps. First, preserve all documentation: contracts, payment records, correspondence, and screening logs. Second, freeze the relevant funds or assets internally and document the decision with a timestamp. Third, notify the GIIF using the prescribed form, providing details of the listed person, the nature of the asset, and the estimated value. Fourth, obtain legal advice on whether a derogation application is appropriate.

Derogations allow a company to unfreeze assets or complete a transaction that would otherwise be prohibited. The competent authority in Poland for most derogation requests is the Ministry of Finance. Processing times vary widely – from three weeks for straightforward humanitarian cases to several months for commercial derogations. The application must specify the legal basis within the relevant Council regulation, the purpose of the transaction, and evidence that no funds will ultimately benefit the designated person.

Document all screening steps and decisions with timestamps
Freeze assets and notify the GIIF without undue delay
Preserve evidence of due diligence conducted before the transaction
Assess derogation eligibility before resuming any suspended activity
Review all related contracts for exposure to the same counterparty group

Parallel legal exposure must also be assessed. A breach of EU sanctions can simultaneously trigger criminal liability under the Polish Penal Code, administrative penalties under the AML Act, and civil claims from counterparties who suffered loss because the company failed to flag the restriction. Directors who authorised the transaction face personal liability. This is not a theoretical risk – Polish prosecutors have opened investigations in sanctions-related cases since 2023.

To receive an expert assessment of your company's sanctions exposure, contact info@kordeckipartners.com.

What procedural tools are available in sanctions-related disputes?

When a Polish company is itself adversely affected – for example, because a contract partner invokes sanctions as a force majeure excuse, or because a bank refuses to execute a payment citing sanctions concerns – dispute resolution tools become relevant. Litigation in Warsaw district and regional courts is available, but the complexity of EU sanctions law means that arbitration Poland proceedings are often better suited. Arbitration clauses allow the parties to select arbitrators with sanctions law expertise, and awards can be enforced across the EU without re-litigation.

The Sąd Arbitrażowy przy Krajowej Izbie Gospodarczej (Court of Arbitration at the Polish Chamber of Commerce, SA KIG) administers disputes under its own rules, with typical proceedings running 12 to 18 months for complex cases. For public procurement disputes involving sanctions-related contract terminations, the Krajowa Izba Odwoławcza (National Appeals Chamber, KIO) offers a KIO appeal mechanism with a 15-day filing deadline from the moment the procurement decision is communicated. A dispute lawyer with experience in both sanctions compliance and commercial litigation is essential in these proceedings.

Cross-border enforcement adds another layer. Where a judgment or award needs to be enforced against assets located outside Poland, the procedural rules differ by jurisdiction. For context on enforcement mechanics, see our guide on enforcing a United States judgment in Poland step-by-step and our parallel analysis on enforcing a Slovakia judgment in Poland step-by-step. Both guides address the recognition framework that applies when assets move across borders in disputed transactions.

We obtained interim measures protecting assets worth over EUR 5m for a technology client in Mazowieckie (spring 2026), where the counterparty had attempted to transfer funds to a jurisdiction outside EU enforcement reach. The interim order was granted within 48 hours of the application.

What steps should a Polish business take to build a sanctions compliance programme?

A sanctions compliance programme does not need to be elaborate. For most Polish businesses, the core requirement is a documented process that covers four areas: counterparty screening, transaction monitoring, escalation procedures, and staff training. The Office of Foreign Assets Control (OFAC) guidelines – while American – are widely used as a reference model in Poland because they set a clear standard for what "reasonable steps" looks like in practice.

Counterparty screening should check the EU consolidated sanctions list, the UN Security Council list, and – for companies with US-dollar transactions or US counterparties – the OFAC Specially Designated Nationals list. Screening should occur at onboarding and be repeated whenever a new transaction is initiated. A 30-day re-screening cycle is a reasonable baseline for high-risk counterparties. For companies dealing in dual-use goods, screening the end-user is as important as screening the direct buyer.

Transaction monitoring focuses on red flags: unusual payment routes, third-country intermediaries in high-risk jurisdictions, requests to change payment currency or beneficiary at the last minute, and inconsistencies between stated end-use and the technical specifications of the goods. Any of these flags should trigger a manual review before the transaction proceeds. Trade secret protection strategies – including careful information barriers between sanctioned and non-sanctioned business lines – are also relevant here; see our article on trade secret protection strategies under Polish law for the broader confidentiality framework.

Staff training need not be annual. A short briefing at contract signature, combined with a one-page decision tree for the sales and procurement teams, is often more effective than a two-hour annual seminar. The decision tree should answer three questions: Is the counterparty listed? Are the goods or services restricted? Is there a derogation in place? If the answer to any question is uncertain, the transaction stops until legal review is complete.

For a tailored strategy on building a sanctions compliance programme for your business, reach out to info@kordeckipartners.com.

Frequently asked questions

Q: Does a Polish company need a separate licence for every export to a non-sanctioned country if the goods could be re-exported to a restricted destination?

A: Polish export control law, aligned with EU dual-use regulations, requires an end-use certificate or end-user statement for goods above specified value and sensitivity thresholds. The exporter is responsible for conducting reasonable due diligence on the buyer's re-export intentions. If there are red flags suggesting onward shipment to a restricted destination, the exporter should either obtain additional assurances or decline the transaction. The Ministry of Development and Technology can issue a binding opinion on classification in borderline cases, typically within 30 days.

Q: How long does a derogation from an asset freeze take, and what does it cost?

A: Processing times at the Ministry of Finance range from three weeks for straightforward cases to four months or more for complex commercial applications. There is no official filing fee for the derogation application itself. However, the legal and advisory costs of preparing a complete application – including evidence of the transaction purpose, supporting documentation, and legal analysis of the applicable Council regulation – typically range from PLN 15,000 to PLN 60,000 depending on complexity. Incomplete applications are returned and restart the clock.

Q: Is it a common misconception that sanctions only affect banks and large multinationals?

A: Yes, and it is one of the most commercially damaging misconceptions. EU sanctions apply to all natural and legal persons subject to EU law – including sole traders, small logistics companies, legal professionals, and software vendors. A small IT firm providing cloud services to a listed entity is as exposed as a bank processing a wire transfer. The difference is that smaller companies typically lack compliance infrastructure, which makes the breach more likely and the personal liability of owners and directors more immediate.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to sanctions compliance, commercial disputes, and cross-border enforcement. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.