Polish Sanctions Act 2022 – obligations

A Kraków-based trading company receives an urgent email from its bank: a payment to a long-standing supplier has been frozen. The bank cites a name match on a sanctions list. The company's compliance officer has never heard of the Polish Sanctions Act 2022. Within 24 hours, the company must decide whether to freeze the funds, report to the General Inspector of Financial Information, or challenge the listing – and each path carries its own legal consequences.

Poland's Ustawa o szczególnych rozwiązaniach w zakresie przeciwdziałania wspieraniu agresji na Ukrainę oraz służących ochronie bezpieczeństwa narodowego (Act on Special Solutions to Counter Support for Aggression Against Ukraine and to Protect National Security, the Sanctions Act) entered into force in April 2022. It creates a domestic screening framework that runs parallel to EU restrictive measures. Entities covered by the Act must freeze assets, suspend business relationships, and report designated persons within 24 hours of identification – failure triggers fines of up to PLN 20 million per violation.

This guide walks through the Act's scope, the step-by-step compliance procedure, the penalty framework, and the most common mistakes made by Polish and foreign businesses. Three business scenarios – a manufacturing exporter, a technology platform, and a foreign investor – illustrate how obligations play out in practice. A checklist and FAQ close the guide.

Who does the Polish Sanctions Act 2022 cover?

The Act applies to a wide range of entities operating in Poland. The scope is deliberately broad: any natural person, legal entity, or organisational unit conducting economic activity in Poland falls within its reach. This includes Polish-registered companies, branches of foreign enterprises, and sole traders. The National Court Register (KRS) lists roughly 500,000 active commercial entities – all of them potentially subject to the Act's obligations.

Specific sectors face heightened obligations. Banks, payment institutions, insurance companies, investment firms, and real estate agents are all named as obligated institutions. The Polish Financial Supervision Authority (KNF) supervises the financial sector's compliance, while the General Inspector of Financial Information (GIIF) – operating within the Ministry of Finance – coordinates the broader reporting framework. The Central Register of Beneficial Owners (CRBR) is a key reference point: obligated entities must cross-check beneficial ownership data against the sanctions list before onboarding any client.

The territorial scope extends beyond Polish-registered entities. A foreign company providing services to Polish residents, or holding assets located in Poland, must also comply. This creates a practical challenge for groups with Polish subsidiaries: the parent may need to implement group-wide screening processes to avoid inadvertent breaches at the Polish level. Sanctions compliance programmes that work in Frankfurt or Amsterdam do not automatically satisfy Polish law requirements.

All entities conducting economic activity in Poland
Banks, payment institutions, and investment firms (KNF-supervised)
Real estate agents, notaries, and auditors
Foreign companies with Polish assets or Polish-resident counterparties
Branches and representative offices of foreign enterprises

One common misconception is that only companies with direct Russian or Belarusian counterparties need to worry. The Act covers any entity whose counterparty – at any tier in the supply chain – appears on the Polish or EU sanctions list. A dispute lawyer advising on contract termination should flag this immediately: the contractual consequences of a sanctions hit can be irreversible within days.

What are the step-by-step compliance obligations?

The compliance procedure under the Sanctions Act follows a clear sequence. Step one is screening: every obligated entity must check counterparties against the list of persons and entities designated under the Act, the EU consolidated list, and the UN sanctions list. The screening must happen before entering into a transaction and on an ongoing basis. The Ministry of Interior and Administration maintains the Polish domestic list, updated without a fixed schedule – meaning daily monitoring is the only safe approach.

Step two is freezing. If a match is identified, the entity must immediately freeze all funds and economic resources belonging to, owned by, or controlled by the designated person. "Immediately" means without prior notice to the counterparty. The freeze applies to assets already held and to any incoming transfers. A payment instruction already submitted to the bank does not excuse the receiving entity from its own freeze obligation.

Step three is reporting. The entity must notify the GIIF within 24 hours of identifying a potential match. The notification must include the name of the designated person, the nature of the assets frozen, and the estimated value. Failure to report within this window is itself a separate violation – distinct from any failure to freeze.

Step four is suspension of the business relationship. While the freeze is in place, the entity must suspend any ongoing contractual performance with the designated counterparty. This includes delivery of goods, provision of services, and payment of contractual sums. The suspension is not a termination: the contract remains in place, but performance is paused pending regulatory clearance.

Screen counterparties before each transaction and continuously
Freeze assets immediately upon identification – no prior notice required
Report to GIIF within 24 hours
Suspend – do not terminate – the business relationship

We secured a reversal of an administrative freeze decision for a manufacturing client in the Mazowieckie region (autumn 2025). The key was documenting the screening process precisely: the company had followed every procedural step, and the freeze had resulted from a false positive on a name-matching algorithm. Proper process records made the difference.

For companies engaged in arbitration Poland proceedings, a sanctions hit mid-arbitration raises acute procedural questions. Can the arbitral tribunal continue? Can the respondent pay an award? These issues must be flagged to the tribunal immediately – delay forfeits the ability to seek procedural protection.

What penalties apply for non-compliance?

The penalty framework is tiered and operates on a per-violation basis. The Act empowers the Minister of Interior and Administration to impose an administrative fine of up to PLN 20 million for each breach. A single failure to freeze, a single missed report, and a single continued business relationship each constitute separate violations. A company that misses three obligations in one incident can face fines totalling PLN 60 million.

Personal liability of management is a distinct risk. Board members and executives who authorised or permitted the non-compliant conduct face individual fines of up to PLN 5 million. This mirrors the approach taken in fiscal criminal proceedings – a point developed in our guide on fiscal criminal defence strategy for board members. Personal exposure creates an irreversible reputational consequence that survives any corporate restructuring.

Criminal liability sits alongside administrative penalties. The Act criminalises wilful circumvention of sanctions obligations. A conviction can result in imprisonment of up to 15 years for the most serious cases involving large-scale asset concealment. The public prosecutor's office may open proceedings independently of any administrative investigation. Both tracks can run simultaneously.

Repeat violations attract enhanced scrutiny. The supervisory authority may impose a temporary ban on conducting regulated activity – effectively a licence suspension. For banks and payment institutions supervised by the KNF, this consequence is existential. Even a temporary suspension triggers immediate notification obligations to counterparties and may accelerate insolvency proceedings.

One practical point: the Act does not provide a de minimis threshold. A frozen payment of PLN 500 triggers the same reporting obligation as a frozen transfer of PLN 50 million. Litigation Warsaw practitioners regularly see companies that assumed small amounts fell below the radar – they do not.

How do the three business scenarios play out?

Understanding abstract obligations is easier when mapped to concrete situations. Three scenarios illustrate the practical reach of the Act: a manufacturing exporter, a technology platform, and a foreign investor entering Poland.

Scenario one – manufacturing exporter. A Silesian steel producer sells components to a distributor in a third country. The distributor's ultimate beneficial owner appears on the Polish domestic list. The producer is obligated to screen beneficial ownership, not just the direct counterparty. Failure to identify the UBO and freeze the proceeds of the sale exposes the producer to a PLN 20 million fine. The producer should cross-reference CRBR data and request beneficial ownership declarations at onboarding and annually.

Scenario two – technology platform. A Warsaw-based SaaS company provides subscription services to thousands of business clients across the EU. One client – a Latvian holding company – has a shareholder on the EU consolidated list. The SaaS company's terms of service do not include a sanctions termination clause. It must suspend access immediately upon identification, report to GIIF within 24 hours, and review all active contracts for similar exposure. A KIO appeal mechanism is not available here: the obligation is statutory, not contractual.

Scenario three – foreign investor. A German private equity fund acquires a majority stake in a Polish logistics company. Post-closing due diligence reveals that a minority shareholder in one of the portfolio company's suppliers is a designated person. The fund must notify the GIIF, freeze any distributions attributable to that supplier relationship, and document its remediation steps. Enforcing a judgment against the supplier in a separate dispute – see our guide on enforcing a United Kingdom judgment in Poland – may be stayed pending sanctions clearance.

We obtained interim measures protecting assets worth over EUR 3m for a foreign investor's subsidiary in Lower Silesia (spring 2026). The investor had identified a sanctions exposure in a target company before closing and sought court protection to preserve the asset position while the administrative procedure ran its course.

What are the most common mistakes – and how to avoid them?

The most frequent error is treating sanctions screening as a one-time onboarding check. The Polish domestic list is updated irregularly – new designations can appear without advance notice. A counterparty that was clean at onboarding may be designated six months later. Continuous monitoring, not point-in-time screening, is the legal standard. Companies relying solely on annual KYC refresh cycles are exposed.

The second common mistake is conflating EU sanctions compliance with Polish Act compliance. The two frameworks overlap but are not identical. The Polish domestic list includes persons designated under national security grounds that do not appear on the EU consolidated list. A company with a fully EU-compliant programme may still breach the Act if it does not screen against the domestic list. Polish law requires screening of both lists independently.

Third: companies often suspend the business relationship but fail to report to GIIF. They assume that freezing the assets satisfies the obligation. It does not. The reporting duty is independent. A company that freezes correctly but misses the 24-hour notification window faces a separate fine of up to PLN 20 million. The two obligations must be tracked separately in any compliance workflow.

Fourth: inadequate documentation. When the supervisory authority investigates, it will request evidence of the screening process, the date and time of identification, the content of the GIIF notification, and the steps taken to freeze assets. Companies that cannot produce this evidence face a presumption of non-compliance. A dispute lawyer handling the administrative appeal will need contemporaneous records – not reconstructed ones.

Enforcement against foreign judgments in connected proceedings adds another layer of complexity. Where a creditor holds a French court judgment against a sanctioned debtor, the enforcement procedure in Poland intersects with the freeze obligation – as discussed in our analysis of enforcing a France judgment in Poland. The interaction between enforcement and sanctions law is not yet settled in Polish case law.

What to prepare before a sanctions inspection:

Screening logs with timestamps for each counterparty check
Copies of GIIF notifications sent within the 24-hour window
Internal procedures documenting the freeze and suspension workflow
Beneficial ownership records cross-referenced against the domestic list
Training records showing staff awareness of the Act's obligations

The specific situation of each company requires individual assessment. Gaps in compliance documentation can produce irreversible consequences – including fines that survive any subsequent remediation effort.

To receive an expert assessment of your sanctions compliance programme, contact info@kordeckipartners.com.

Frequently asked questions

Q: Does the Polish Sanctions Act 2022 apply to our company if we have no Russian or Belarusian counterparties?

A: Yes. The Act's scope is not limited to counterparties from specific countries. Any person or entity designated under the Act – regardless of nationality – triggers compliance obligations. A company with no direct Russian or Belarusian exposure may still have a sanctions-linked counterparty further up the supply chain. Screening must cover all counterparties, not only those from sanctioned jurisdictions.

Q: How long does the freeze obligation last, and what is the process for unfreezing assets?

A: The freeze continues until the designated person is removed from the list or until the competent authority issues a specific authorisation to release the assets. There is no automatic sunset period. The entity holding the frozen assets may apply to the Minister of Interior and Administration for a release authorisation in exceptional circumstances – for example, to cover basic living expenses of a natural person. The application process typically takes several weeks, and there is no guaranteed timeline.

Q: Can a company face both administrative and criminal penalties for the same non-compliance?

A: Yes. The administrative and criminal tracks are independent. The administrative fine of up to PLN 20 million per violation is imposed by the Minister of Interior and Administration. Criminal proceedings are conducted by the public prosecutor's office under the general criminal procedure code. A conviction for wilful circumvention of sanctions can result in imprisonment of up to 15 years. Both procedures can run simultaneously, and a finding in one does not preclude a finding in the other. Companies facing investigation should obtain separate legal representation for each track from the outset.

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.