In the face of an extensive legal system, entrepreneurs need to have a comprehensive knowledge of the law in order to avoid harsh consequences. The argument of a lack of awareness of responsibilities does not represent an effective defence against administrative penalties, which include financial sanctions and operating bans.
Areas where companies are particularly at risk of administrative penalties
- Illegal clauses (UOKiK)
The use of prohibited clauses in contracts or rules and regulations carries the risk of penalties imposed by UOKiK, even up to 10% of the company’s annual turnover. The register of such clauses has almost 8,000 entries, available on the UOKiK website.
- Violations of data protection regulations (RODO)
In the context of the growing importance of personal data protection, failing to follow the regulations of the RODO risks administrative penalties from the Office for the Protection of Personal Data (UODO). A legal audit identifies gaps in the data protection system and brings procedures into compliance.
- Employment irregularities (PIP)
Employment-related errors, such as failing to follow wage or hour regulations, can lead to penalties by the State Labour Inspectorate (PIP).
- AML — anti-money laundering (GIIF)
Companies covered by AML legislation must counter money laundering. A legal audit identifies and adjusts documentation as required.
What administrative penalties can be imposed on companies?
The imposition of administrative penalties on a company can significantly affect its financial situation, reputation, and relationships with customers and business partners. Therefore, ensuring compliance with applicable regulations and conducting regular legal audits are key elements in preventing administrative penalties.
Key penalties to which businesses may be exposed:
- UOKiK — prohibited clauses
Type of penalties: Financial penalties of up to 10% of the company’s annual turnover.
For what: Use of prohibited clauses in contracts, rules and regulations, leading to unfair treatment of consumers.
- UODO — personal data protection (RODO)
Type of penalties: Financial penalties of up to €20 million or up to 4% of the company’s annual worldwide turnover.
For what: Failure to comply with data protection legislation, illegal processing of information, or deficiencies in data security.
- PIP — labour inspection
Type of penalties: Financial penalties depending on the type of violations, sometimes linked to the employee’s annual salary.
For what: Irregularities in working conditions, wages, employment.
- GIIF — anti-money laundering
Type of Penalties: Financial penalties, prohibition from operating, loss of reputation.
For What: Deficiencies in anti-money laundering, inadequate AML procedures.
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