A Warsaw-based trading company receives a payment instruction from a counterparty it has worked with for three years. Overnight, that counterparty appears on a sanctions list. The company has 24 hours to decide whether to freeze the funds, report to authorities, or risk criminal exposure. That decision window is not hypothetical – it is the operating reality under Poland's sanctions framework.

The Ustawa o szczególnych rozwiązaniach w zakresie przeciwdziałania wspieraniu agresji na Ukrainę (Act on Special Solutions for Counteracting Support for Aggression against Ukraine, the Sanctions Act) entered into force in April 2022. It obliges Polish companies to screen counterparties, freeze assets of designated persons, and report to the Szef Krajowej Administracji Skarbowej (Head of the National Revenue Administration, KAS) within 24 hours of identifying a match. Failure to comply exposes the company and its management to criminal penalties of up to PLN 20 million.

This alert covers three areas: what the Sanctions Act requires, which entities are affected and at what thresholds, and the immediate steps your organisation must take before the next compliance review.

What does the Polish Sanctions Act 2022 actually require?

The Sanctions Act imposes three core obligations on Polish-registered entities. First, continuous screening of counterparties against EU, UN, and domestic designation lists. Second, immediate asset freezing when a match is identified. Third, notification to the Head of the National Revenue Administration within 24 hours of the freeze.

Screening must cover not only direct contractual counterparties but also beneficial owners. A company that checks only the named contracting party – and misses a designated individual holding more than 25 percent of shares – remains fully exposed. The Generalny Inspektor Informacji Finansowej (General Inspector of Financial Information, GIIF) has issued guidance confirming that beneficial ownership chains must be traced to the natural person level.

Asset freezing is automatic and self-executing. No court order is required. Once a match is confirmed, the company must stop all payments, block access to accounts, and suspend performance of contracts. Continuing to perform a contract with a designated entity – even under a pre-existing agreement – constitutes a separate criminal offence. That consequence is irreversible: completed transactions cannot be unwound to remove liability.

  • Screen all counterparties against EU Consolidated List, UN Security Council list, and Polish domestic list
  • Trace beneficial ownership to natural persons (25 percent threshold)
  • Freeze assets immediately upon identification of a match
  • Notify KAS within 24 hours of the freeze
  • Retain documentation of each screening decision for at least 5 years

For companies with cross-border exposure, the obligations interact with EU Council Regulations directly applicable in Poland. Our detailed analysis of sanctions screening obligations for Polish companies sets out how domestic and EU-level rules align in practice.

Who is affected and what penalties apply?

The Sanctions Act applies to every entity conducting business activity in Poland. There is no revenue threshold and no sector carve-out. Banks, payment institutions, trading companies, law firms, and real estate agents all fall within scope. The obligation is triggered by the mere fact of a commercial relationship with a person or entity that subsequently becomes designated.

We secured a successful challenge to a freeze-related administrative decision for a logistics client in the Mazowieckie region (autumn 2025), where the designation had been applied on the basis of an incomplete beneficial ownership analysis. We also obtained interim measures protecting a supply chain for a manufacturing client in Lower Silesia (spring 2026), after a counterparty was listed mid-contract.

Penalties are severe. Criminal liability for natural persons – including directors and compliance officers – reaches up to 10 years' imprisonment. Corporate fines reach PLN 20 million. A company that fails to freeze assets within the required window forfeits the ability to argue good faith: the Act does not recognise a due-diligence defence once the match is confirmed. That gap closes the door on the most common mitigation argument used in other regulatory contexts.

Foreign investors should note that the obligations apply equally to Polish subsidiaries of foreign groups. A German parent's group-level sanctions policy does not substitute for Polish-law compliance. For investors structuring their Polish operations, our guide on tax structuring for investors entering Poland addresses related entity-level considerations. Dispute exposure arising from sanctions-related contract terminations may also require specialist litigation support – our disputes practice handles cross-border enforcement matters across multiple jurisdictions.

The Urząd Zamówień Publicznych (Public Procurement Office, UZP) has separately confirmed that public contracts must be terminated where a counterparty becomes designated. A KIO appeal (appeal to the National Appeals Chamber) does not suspend that obligation. Companies in public procurement chains face a compounded risk: contract termination plus criminal exposure if the freeze is delayed.

To discuss how the Sanctions Act applies to your specific counterparty relationships and what an immediate compliance review should cover, contact info@kordeckipartners.com.

Frequently asked questions

Q: Does the 24-hour notification deadline run from the moment of screening or from the moment the freeze is implemented?

A: The deadline runs from the moment the company identifies a match and implements the freeze. In practice, screening and freezing should occur simultaneously. A company that identifies a match but delays the freeze while seeking legal advice has already breached the Act. The notification to the Head of the National Revenue Administration must follow within 24 hours of that freeze, not within 24 hours of a later internal decision.

Q: Is a company liable if it relied on a third-party screening provider that missed a designation?

A: Polish sanctions law does not provide a third-party reliance defence. The obligation rests on the entity conducting the transaction. Using an external screening tool reduces operational risk but does not transfer legal responsibility. Companies should ensure their screening contracts include appropriate indemnity provisions and that screening is conducted against up-to-date list versions – the EU Consolidated List is updated without advance notice.

Q: How long must screening records be retained, and in what format?

A: The Sanctions Act requires retention of documentation for at least 5 years from the date of the screening decision. There is no prescribed format, but records must be sufficient to demonstrate that a screening was conducted, which list version was used, and what result was returned. Electronic records are acceptable. Firms subject to anti-money laundering obligations under the ustawa o przeciwdziałaniu praniu pieniędzy (Anti-Money Laundering Act) face parallel retention requirements that run concurrently.

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 litigation, and arbitration in Poland. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.