EU sanctions framework – impact on Polish

A Warsaw-based trading company receives an urgent message from its German parent: a supplier on the approved vendor list has just appeared on the EU consolidated sanctions list. Payments are frozen. Goods sit in a Gdańsk warehouse. The board has 24 hours to decide whether continued performance constitutes a sanctions violation – and who bears personal liability if the answer is yes.

EU sanctions regulations are directly applicable in Poland without transposition into national law, meaning every Polish company must comply from the moment a new measure enters into force in the Official Journal of the European Union. Breaches are prosecuted under Polish criminal and administrative law, with penalties reaching up to PLN 20 million for legal entities and personal criminal liability for directors. The Ministry of Finance, the National Revenue Administration (Krajowa Administracja Skarbowa, KAS), and the Office of the General Inspector of Financial Information (Generalny Inspektor Informacji Finansowej, GIIF) are the principal enforcement bodies in Poland.

This page maps the full sanctions compliance challenge for Polish businesses: the regulatory instruments that apply, the most common operational pitfalls, cross-border dimensions that affect Polish exporters and investors, and a practical self-assessment checklist. Each section includes concrete figures and decision points drawn from live matters handled by our disputes and sanctions practice.

What is the EU sanctions framework and how does it apply in Poland?

EU sanctions are legally binding measures adopted by the Council of the European Union. They take effect as EU Regulations – directly binding on every natural and legal person in all member states, including Poland – or as Common Foreign and Security Policy (CFSP) Decisions that require national implementation. The current framework covers asset freezes, travel bans, trade restrictions, financial prohibitions, and sector-specific measures targeting Russia, Belarus, Iran, North Korea, Syria, and over 30 other jurisdictions.

Poland has no separate primary sanctions statute. Enforcement rests on three pillars. First, the Act on Counteracting Money Laundering and Terrorist Financing (ustawa o przeciwdziałaniu praniu pieniędzy oraz finansowaniu terroryzmu, AML Act) incorporates sanctions obligations for obliged entities. Second, the Penal Code (Kodeks karny, KK) criminalises wilful circumvention. Third, the Act on Responsibility of Collective Entities (ustawa o odpowiedzialności podmiotów zbiorowych) allows fines up to PLN 20 million against companies. The National Revenue Administration (KAS) conducts customs-related enforcement, while the Office of the General Inspector of Financial Information (GIIF) supervises financial institutions and designated non-financial businesses.

The pace of change is the defining challenge. Since February 2022, the EU has adopted fourteen packages of Russia-related sanctions. Each package amends existing regulations, adds new designations, and introduces new sector restrictions – sometimes with no transitional period. Polish businesses that relied on a compliance check performed six months ago may already be operating outside the law. This is the core complexity facing the market.

One concrete figure illustrates the scope: the EU consolidated list of persons, groups, and entities subject to financial sanctions currently contains over 2,000 entries for Russia alone. Screening against that list manually is no longer operationally viable for any company with more than a handful of counterparties.

Asset freeze – prohibition on making funds or economic resources available to designated persons
Trade restrictions – export and import bans on listed goods, including dual-use items
Financial prohibitions – restrictions on transactions with designated banks and state entities
Sector measures – caps on oil price, prohibitions on Russian sovereign debt, transport bans
Circumvention rules – prohibition on knowingly helping a designated person evade sanctions

For a Polish manufacturing company with supply chains stretching across the EU and into third countries, each of these categories requires a separate compliance process. Conflating them – or treating sanctions as purely a banking issue – is one of the most common and most costly mistakes we see.

Which Polish businesses face the highest sanctions exposure?

Sanctions exposure in Poland is not evenly distributed. Sector, ownership structure, and geographic footprint each determine how much regulatory risk a company carries. Understanding your exposure profile is the first step toward building a proportionate compliance programme – and toward knowing when to seek specialist legal advice before, not after, a transaction closes.

Financial institutions bear the broadest statutory obligations. Banks, payment institutions, and investment firms supervised by the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) must screen all clients and transactions in real time, freeze assets without court order, and report to GIIF within 24 hours of identifying a designated person. Failure to freeze triggers direct criminal liability for the compliance officer responsible, with custodial sentences of up to three years under the AML Act.

Trading and manufacturing companies face a different but equally serious risk. Export controls on dual-use goods – governed by EU Regulation 428/2009 as repeatedly amended – require exporters to obtain authorisation before shipping controlled items to third countries. The list of controlled goods includes electronics, precision machinery, chemicals, and software with potential military applications. Polish customs authorities at the National Revenue Administration (KAS) have significantly increased end-use checks since 2022. We secured a successful customs appeal for a manufacturing client in the Silesia region (spring 2025), reversing a goods detention that had blocked over PLN 3 million in inventory.

Professional services firms – lawyers, accountants, consultants, real estate agents – are designated non-financial businesses under the AML Act. They must screen clients against the EU list before accepting a mandate. A law firm that unknowingly advises a sanctioned beneficial owner on a Polish real estate transaction faces both administrative fines and reputational consequences that are effectively irreversible.

Three sectors with elevated exposure in Poland right now:

Energy – companies with legacy contracts involving Russian or Belarusian counterparties
Logistics and transport – carriers moving goods through Belarus or Russia face asset seizure risk
IT and software – export of technology with dual-use classification requires case-by-case licensing

Ownership structure adds a further layer. A Polish company with a beneficial owner who is a national of a sanctioned country – even if the owner is not personally designated – may face enhanced due diligence requirements and, in some cases, de facto exclusion from banking relationships. This dynamic is particularly acute for Polish subsidiaries of companies registered in jurisdictions that are themselves under sectoral measures.

For a tailored strategy on sanctions exposure mapping, reach out to info@kordeckipartners.com.

The complexity of sanctions compliance is not a reason to delay action. It is a reason to act now. Voluntary disclosure to GIIF before an enforcement action begins is treated as a significant mitigating factor under Polish administrative practice – but that window closes the moment an investigation is opened.

What are the most common operational pitfalls in sanctions compliance?

Most sanctions breaches by Polish companies are not deliberate. They result from process gaps: outdated screening databases, incomplete beneficial ownership information, misunderstood derogations, or a failure to re-screen counterparties after a new designation package is published. Each of these gaps can produce the same legal outcome as intentional evasion – personal liability for directors and fines for the entity.

The most frequent pitfall is static screening. A company screens a counterparty at contract signature and never rescreens. Designations happen after contracts are signed. The Russia sanctions packages have added hundreds of entities mid-contract. A Polish exporter that continued shipping goods under a pre-existing contract to a counterparty designated in a later package has no automatic legal defence. The EU sanctions regulations contain no grandfather clause for existing contracts unless a specific derogation has been granted by the competent national authority.

The second major pitfall involves beneficial ownership. EU sanctions target designated individuals and their controlled entities. Control is defined broadly – direct or indirect ownership of more than 50 percent, or the ability to exercise decisive influence. A Polish company dealing with a Russian-owned trading vehicle registered in Cyprus or the UAE may be transacting with a sanctioned person without knowing it. The obligation to look through ownership structures sits with the Polish company, not with the foreign counterparty.

Derogations are misunderstood almost universally. The EU framework provides for specific derogations – for example, authorising payments to frozen accounts for pre-existing obligations, or permitting transactions necessary for humanitarian purposes. These derogations do not apply automatically. They require a formal application to the competent Polish authority (typically the Ministry of Finance or GIIF, depending on the measure), and approval must be obtained before the transaction is executed. Acting on an assumed derogation without formal authorisation is itself a breach.

We obtained interim legal protection for a logistics client in the Mazowieckie region (autumn 2024) whose bank had frozen accounts citing sanctions concerns. The freeze was based on an incorrect beneficial ownership determination. We challenged the freeze before the Regional Administrative Court (Wojewódzki Sąd Administracyjny, WSA) and secured an unfreezing order within 30 days – preventing what would otherwise have been an irreversible loss of the client's operating liquidity.

A checklist of what to prepare before any high-risk transaction:

Current extract from the EU consolidated sanctions list (dated within 48 hours of transaction)
Beneficial ownership register extract from the National Court Register (KRS) or equivalent foreign registry
End-use certificate from the buyer where dual-use goods are involved
Written legal opinion confirming no derogation application is required
Board resolution documenting the compliance decision and the persons responsible

The documentation point is underappreciated. In an enforcement investigation, the company that can produce a contemporaneous board resolution showing a genuine compliance process will almost always receive more favourable treatment than one that cannot. The record does not need to be long. It needs to exist.

How do cross-border structures affect sanctions risk for Polish companies?

Poland sits at the intersection of EU and non-EU trade flows. Polish companies frequently act as intermediaries – buying from Asian suppliers and selling to EU buyers, or providing logistics and warehousing services for goods moving between the EU and third countries. This intermediary role creates layered sanctions exposure that purely domestic companies do not face.

The circumvention risk is the most serious. EU Regulation 833/2014, as amended by successive Russia packages, prohibits any person within the EU from knowingly participating in arrangements designed to circumvent sanctions. The word "knowingly" has been interpreted broadly by the European Commission's guidance documents. A Polish trading company that structures a transaction through a third-country entity – even without direct contact with a sanctioned party – may be caught by the circumvention prohibition if it had reason to suspect the end destination of the goods.

For Polish companies with subsidiaries or affiliates in non-EU jurisdictions, an additional layer of risk arises from extraterritorial sanctions. The United States Office of Foreign Assets Control (OFAC) and the UK Office of Financial Sanctions Implementation (OFSI) each maintain their own lists and prohibitions. A Polish subsidiary of a US-headquartered group may be subject to US primary sanctions even for transactions conducted entirely within Poland. This is not a theoretical risk – it is a live compliance challenge for every Polish company with a US shareholder or a USD-denominated credit facility.

The arbitration dimension of cross-border sanctions disputes is increasingly relevant. Contracts interrupted by sanctions – where one party claims force majeure and the other claims breach – are ending up in arbitration proceedings before the Court of Arbitration at the Polish Chamber of Commerce (Sąd Arbitrażowy przy Krajowej Izbie Gospodarczej, SA KIG) and before international tribunals. The legal question of whether sanctions constitute force majeure under Polish law – governed by the Civil Code (Kodeks cywilny) – is currently unsettled. Courts and arbitral panels have reached different conclusions depending on the foreseeability of the specific measure at the time of contracting.

Polish companies entering new contracts should consider three structural protections: a sanctions clause defining the consequences of a future designation, a material adverse change clause covering regulatory risk, and a choice of arbitration over state court litigation for disputes involving non-EU counterparties. For context on enforcing foreign judgments and awards in Poland, see our guides on enforcing a Slovakia judgment in Poland and enforcing a France judgment in Poland.

To receive an expert assessment of your cross-border sanctions exposure, contact info@kordeckipartners.com.

What does a proportionate sanctions compliance programme look like for a Polish company?

There is no single prescribed format for a sanctions compliance programme under Polish or EU law. The proportionality principle applies: a small trading company with 20 counterparties needs a different programme from a bank with 200,000 clients. What is not proportionate – for any company with material trade flows – is having no programme at all.

A minimum viable programme for a mid-sized Polish company has five components. First, a screening policy that defines which databases are used (at minimum the EU consolidated list, the UN list, and relevant bilateral lists), how frequently rescreening occurs (at minimum monthly, and within 24 hours of any new designation package), and who is responsible. Second, a beneficial ownership procedure that requires counterparties to disclose their ultimate beneficial owners before any transaction above a defined threshold – typically EUR 10,000 for financial institutions, but recommended for trading companies at EUR 15,000 or more. Third, a derogation procedure documenting how the company identifies situations requiring authorisation and who applies for it. Fourth, a training programme ensuring that commercial, finance, and legal staff understand the basic prohibitions. Fifth, an escalation path to external legal counsel for transactions above a defined risk threshold.

The threshold question matters. Many Polish companies set a monetary threshold for compliance review – for example, any transaction above EUR 50,000 is reviewed by the compliance function. The problem is that sanctions restrictions have no monetary floor. A EUR 500 payment to a designated person is as much a breach as a EUR 500,000 payment. Thresholds are useful for allocating internal resources, but they cannot substitute for automated screening of all counterparties.

KIO appeals – proceedings before the National Appeals Chamber (Krajowa Izba Odwoławcza, KIO) – are a specific procedural tool available when a public procurement contracting authority wrongly excludes a tenderer on sanctions grounds. The KIO has a 15-day decision deadline. Polish companies that are incorrectly flagged as sanctions-exposed by a public body have a narrow but real procedural window to challenge that determination. Missing the KIO appeal deadline forfeits this remedy entirely, making it one of the most time-sensitive steps in the sanctions dispute toolkit.

For businesses managing restructuring alongside sanctions exposure, our guide on pre-pack sale in Poland addresses how asset transfers interact with frozen-asset prohibitions.

Frequently asked questions

Q: Does a Polish company need to screen its clients if it is not a financial institution?

A: Yes. The EU sanctions regulations apply to all natural and legal persons operating within the EU, regardless of sector. Non-financial companies are prohibited from making funds or economic resources available to designated persons. Professional service firms – including lawyers, accountants, and real estate agents – are additionally subject to client screening obligations under the AML Act. Failure to screen is not a defence to a sanctions breach; it is an independent basis for administrative liability.

Q: How long does it take to obtain a derogation from the Ministry of Finance?

A: Processing times vary significantly. Simple derogations for humanitarian payments have been processed in under two weeks. Complex derogations involving asset freezes or sector restrictions can take two to six months, depending on the nature of the measure and the completeness of the application. There is no statutory deadline binding the Ministry. Companies should not execute a transaction in anticipation of a derogation being granted – the authorisation must be in hand first. Planning ahead by at least 60 days for any transaction requiring derogation is the minimum prudent approach.

Q: Is it a common misconception that sanctions only affect Russian-owned companies?

A: It is one of the most widespread misconceptions in the market. EU sanctions apply to any person or entity – regardless of nationality – that deals with a designated party. A Polish company with no Russian ownership, no Russian employees, and no Russian contracts can still breach sanctions by, for example, providing logistics services for goods that are ultimately destined for a sanctioned entity, or by accepting payment routed through a designated bank. The nationality of the Polish company is irrelevant to the analysis. What matters is the identity of the counterparty and the nature of the transaction.

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 navigating EU regulatory frameworks. To discuss your situation, contact info@kordeckipartners.com.