Asset Seizure and Asset Protection: A Practical Guide
Poland has dramatically expanded its powers to freeze assets in criminal proceedings. What this means for those with wealth to protect—and where the legal boundaries lie.
In recent years, Polish criminal law has steadily broadened the state’s authority to seize assets during criminal proceedings. The reforms of 2017 and 2022 substantially enhanced law enforcement’s powers to “freeze” the property of individuals under criminal investigation—a development that reflects both the ambitions and the frustrations of a prosecutorial apparatus struggling to reclaim the proceeds of crime.
The impetus is not difficult to identify. According to a February 2020 report by the Supreme Audit Office, between 2014 and 2018, Polish authorities managed to secure criminal assets worth a mere 2.7 billion złoty—while the estimated profits from criminal activity during the same period ranged between 217 and 520 billion złoty. By this accounting, law enforcement recovered approximately one percent of the wealth generated by crime. The new seizure powers represent an attempt, however blunt, to narrow that gap.
The Expanded Scope of Asset Seizure
Current regulations permit authorities to freeze not only the assets of the accused but also, under specified circumstances, the property of third parties. This applies in cases where assets have been transferred to others and a presumption of criminal origin attaches to them. The law now also allows for the seizure of corporate assets and, in narrowly defined situations, the freezing of property before formal charges have been filed.
These mechanisms aim to prevent a familiar maneuver: the offloading of assets to relatives, business associates, or shell entities in order to frustrate eventual enforcement of court-ordered penalties.
Constitutional Limits on Interference with Property Rights
Asset seizure constitutes a significant intrusion upon the constitutionally protected right to property enshrined in Article 64 of the Polish Constitution. In a judgment of September 6, 2004 (SK 10/04), the Constitutional Tribunal held that the institution of asset seizure does not, in itself, violate the Constitution—but emphasized that any temporary hardship must serve the fundamental premise of a democratic state governed by law: the enforceability of judicial decisions.
The principle of proportionality, derived from Article 31(3) of the Constitution, is paramount. Any seizure must be commensurate with its stated objective and may not exceed what is strictly necessary to secure enforcement of an anticipated judgment.
The Presumption of Innocence
The presumption of innocence, articulated in Article 42(3) of the Constitution and Article 5 of the Code of Criminal Procedure, remains foundational. Asset seizure does not constitute a determination of guilt—that authority belongs exclusively to a court rendering a final judgment. Seizure is a provisional measure, properly invoked only when concrete circumstances give rise to a reasonable apprehension that future enforcement will be frustrated.
Critically, the burden of establishing the grounds for seizure rests with the prosecuting authority, not with the person whose assets are at stake. The state must demonstrate not only a high probability that an offense was committed but also specific circumstances warranting concern that, absent seizure, enforcement will be impossible or significantly impaired.
Seizure of Third-Party Assets: Legal Presumptions
Among the most controversial provisions is the authority to seize assets held by third parties on the presumption that such property actually belongs to the perpetrator of a crime. The statute provides that if assets were transferred to another person within the five years preceding the commission of an offense through the date of judgment, they are presumed to derive from criminal activity.
A third party whose assets have been seized may rebut this presumption by demonstrating that, given the circumstances of the acquisition, they could not have suspected—even indirectly—that the property originated from a prohibited act. In practice, this shifts the burden of proof onto the third party, who must establish both the legality of the acquisition and their own good faith.
This regime raises serious concerns regarding the protection of individuals who acquired property legitimately, in good faith, often years before any criminal proceeding was initiated against the person from whom—or through whom—the property was obtained.
Asset Planning in the Context of Seizure
Against the backdrop of expanded seizure authority, entrepreneurs and individuals managing substantial wealth increasingly contemplate legal structures designed to protect their assets from various risks—including the risk of seizure in criminal proceedings.
Lawful Protective Structures
Asset planning through legitimate legal structures is both permissible and commonplace, provided its purpose is not to obstruct criminal proceedings or conceal the proceeds of crime. Such structures may include:
Foreign Holding Companies — Housing real estate or other assets in entities registered in jurisdictions with stable legal systems, such as Cyprus, Malta, or Luxembourg. These arrangements are standard in international commerce and serve purposes including tax optimization, protection against unfounded claims, and succession planning.
Family Foundations — Since 2023, Polish law has recognized the family foundation as a vehicle for long-term management and protection of family wealth. Subject to Polish law and oversight, the family foundation affords a defined level of asset protection against claims.
Trusts and Private Foundations & Offshore Foundations — Certain jurisdictions (Liechtenstein, Switzerland, Malta, among others) offer legal structures that permit the segregation of assets from the person of the founder while preserving specified mechanisms of control and benefit.
Change of Tax Residency — For individuals conducting international business, a change of tax residency may be justified on commercial, fiscal, or personal grounds. Polish law imposes a so-called exit tax—a levy on unrealized capital gains—payable upon the transfer of tax residency abroad.
The Boundaries of Legality
It is essential to understand that asset planning must remain lawful and cannot be undertaken with the purpose of obstructing criminal proceedings. Transferring assets after the commission of an offense, or during criminal proceedings, with the intent to frustrate seizure or enforcement may serve as grounds for:
- Extension of the seizure to third-party assets
- Treatment as an aggravating circumstance in sentencing
- In extreme cases, additional criminal charges for money laundering
Asset planning should be conducted preventively, in the ordinary course of business or private wealth management—not as a response to the initiation of criminal proceedings.
The Limits of Foreign Enforcement
A significant consideration in holding assets abroad is the limited reach of Polish enforcement in other countries. A Polish bailiff has no direct authority to execute against property located outside Poland. Under Article 1110⁴ § 1 of the Code of Civil Procedure, enforcement matters fall within exclusive domestic jurisdiction when execution is to be commenced or conducted in Poland.
The European Account Preservation Order, introduced by EU Regulation No. 655/2014, permits the freezing of funds in bank accounts across EU member states but does not confer direct enforcement authority. Actual execution requires the initiation of separate proceedings in the country where the assets are located, utilizing mutual legal assistance procedures.
These procedures are time-consuming, highly formalized, and do not invariably succeed. According to Ministry of Justice data, the success rate of bailiff enforcement in Poland hovers around eighteen to twenty percent—indicative of systemic difficulties in collecting even domestic claims. Cross-border enforcement is more cumbersome still, and less effective.
International Transparency: CRS and DAC6
Those contemplating international asset structures should be aware of the growing regime of international transparency. Poland participates in automatic tax information exchange under:
Common Reporting Standard (CRS) — Automatic exchange of financial account information among more than one hundred countries. Data on bank accounts, investments, and other financial assets is transmitted automatically to the beneficiary’s country of tax residence.
DAC6 Directive — An obligation for tax advisors to report cross-border tax arrangements meeting specified criteria, aimed at combating aggressive tax optimization.
Register of Beneficial Owners — EU member states maintain registers disclosing the beneficial owners of companies and other legal structures.
This means that foreign structures in jurisdictions participating in these mechanisms no longer afford the degree of confidentiality they once did.
A Balanced Approach to Asset Protection
Protection of assets against unwarranted seizure in criminal proceedings should rest, above all, on:
Transparency and Documentation — Meticulous documentation of the lawful origin of assets, income sources, and business transactions. In the event of a seizure, one must be prepared to present comprehensive records establishing the legitimacy of one’s property.
Proper Ongoing Planning — Legal structures for asset management and succession should be established in the ordinary course of affairs, not as a reaction to legal difficulties.
Professional Advice — Decisions concerning international asset structures should be made with the guidance of experienced legal and tax advisors who can ensure compliance with the laws of all relevant jurisdictions.
Compliance with the Law — No legal structure will shield one from the consequences of committing a crime. The surest protection of wealth is the conduct of lawful business and adherence to the law.
Conclusion
The expansion of asset seizure powers in Polish criminal law is a settled fact. On one hand, it serves to enhance the effectiveness of criminal prosecution and the recovery of proceeds from unlawful activity. On the other, it constitutes a serious incursion upon constitutionally protected property rights and gives rise to legitimate concerns about the potential for abuse.
Those managing significant wealth should be cognizant of these regulations and—acting within the bounds of the law—consider legitimate protective structures. At the same time, it is essential to understand that transferring assets abroad after the commission of an offense, or during criminal proceedings, will not only fail to resolve the problem but may worsen one’s legal position.
The most reliable protection of wealth remains the conduct of transparent, lawful activity, scrupulous documentation of all transactions, and—when necessary—vigorous defense of one’s rights in asset seizure proceedings with the assistance of experienced counsel.
Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.
