Seizure of Company Assets Without a Court Judgment
The Constitution of the Republic of Poland guarantees that forfeiture of property may occur only on the basis of a final court judgment. Meanwhile, Polish law provides for a range of mechanisms enabling the effective seizure of company assets without a judgment — as security for future claims or within proceedings concerning anti-money laundering. Understanding these mechanisms is fundamental to effective protection of a business.
What Is Seizure of Company Assets Without a Judgment
Seizure of company assets without a judgment is a temporary restriction on an entrepreneur’s right to dispose of assets, which occurs before a final resolution of the case. It may take the form of:
- property security in criminal proceedings (Article 291 of the Code of Criminal Procedure)
- security for tax liabilities (Article 33 of the Tax Ordinance)
- account blocking under anti-money laundering regulations
- blocking of funds in an account as “physical evidence” / Order recognising funds as physical evidence
Each of these mechanisms serves a different purpose, but the effect on the entrepreneur is often similar: loss of access to funds necessary for conducting business (Further reading: Criminal Asset Forfeiture and Extended Confiscation).
Property Security in Criminal Proceedings
Legal Basis and Prerequisites
Under Article 291 § 1 of the Code of Criminal Procedure, property security may be applied when the accused is charged with an offence punishable by a fine, forfeiture, monetary payment, or compensatory measure. The condition is a justified concern that without security, enforcement of the future judgment will be impossible or significantly impeded.
The Constitutional Tribunal in its judgment of 6 September 2004 (SK 10/04) confirmed the constitutionality of this institution, indicating that:
- security is temporary in nature,
- it serves to guarantee the enforceability of court judgments,
- it does not violate the essence of property rights.
Time Limits
Property security may be applied from the moment charges are brought until the judgment concluding the proceedings becomes final. This is crucial information for entrepreneurs: a property security order is not equivalent to conviction and is subject to appeal.
Security for Tax Liabilities
How It Works
Article 33 of the Tax Ordinance allows for security of a tax liability before the payment deadline if there is a justified concern that it will not be met. The prerequisites include in particular:
- persistent failure to pay due public law liabilities,
- undertaking activities involving disposal of assets that may impede enforcement.
Security may also extend to the joint property of spouses — pursuant to Article 29 § 2 of the Tax Ordinance.
Security over Third-Party Assets
Article 33b of the Tax Ordinance extends the possibility of security to the assets of:
- payers and collectors,
- management board members of limited companies (Article 116 of the Tax Ordinance),
- partners of partnerships (Article 115 of the Tax Ordinance),
- VAT taxpayers jointly and severally liable for contractors’ arrears.
This means that seizure of company assets without a judgment may affect not only the entrepreneur himself but also persons connected with the business.
Account Blocking in Connection with Suspected Money Laundering
Legal Basis
The Act of 1 March 2018 on Counteracting Money Laundering and Terrorism Financing authorises the suspension of transactions or blocking of an account for a period of up to 6 months in case of suspicion of connection with money laundering or terrorism financing.
Time Limits
Under Article 89(7) of the Act, the block lapses if a property security order or an order concerning physical evidence is not issued within 6 months. This provision constitutes an important procedural safeguard — the authority cannot indefinitely hold an entrepreneur’s funds without taking further procedural steps.
Means of Defence Against Seizure of Company Assets Without a Judgment
Appeal Against the Order
A property security order may be appealed to the court. Judicial review covers:
- the validity of the decision (existence of prerequisites),
- the scope of evidence used by the authority,
- the proportionality of the measure applied.
Application to Lift Security
Article 291 § 4 of the Code of Criminal Procedure requires security to be lifted immediately in whole or in part when the reasons for its application cease to exist. The entrepreneur should actively monitor the course of proceedings and file applications for lifting as soon as grounds arise.
Opposition to Enforcement
Where security is converted into enforcement, an action under Article 840 of the Code of Civil Procedure is available, allowing the enforcement title itself to be challenged.
Asset Protection Against Seizure — A Strategic Perspective
Time as a Critical Variable
The brilliant military strategist Helmuth von Moltke maintained that mistakes made at the stage of strategic deployment cannot be corrected during the campaign. In asset protection, this principle applies with full force.
Protective structures must be established before a threat materialises. A transfer of assets made in the face of proceedings may be challenged as action to the detriment of creditors. A foundation established the day before a security order will protect nothing.
Multi-Layered Architecture
Effective protection against seizure of company assets without a judgment requires a systematic approach:
First layer: Proper corporate structure separating business risk from personal assets — limited companies, transformations.
Second layer: Diversification of assets across jurisdictions, with full tax transparency.
Third layer: Legal instruments — family foundations, investment policies, holding structures.
Fourth layer: Procedural knowledge — familiarity with means of defence and deadlines for filing them.
Limits of Asset Protection
There is a fundamental difference between legal asset protection and hiding assets from legitimate claims. Crossing this line leads to criminal liability under Article 300 of the Criminal Code (fleeing with assets from creditors) or Article 299 of the Criminal Code (money laundering).
The Absolute Boundary: Assets Derived from Crime
Regardless of how sophisticated the protective structures an entrepreneur builds, there exists a boundary that no legal construction can cross: no “asset protection” will work if the assets derive from criminal activity.
The provisions on extended confiscation (Article 45 § 2 of the Criminal Code) introduce a presumption that property acquired by the perpetrator within five years before commission of the offense constitutes proceeds of that offense—unless the perpetrator or another person demonstrates its lawful origin. This presumption pierces all holding structures, foundations, and international transfers.
Moreover, Article 45 § 3 of the Criminal Code permits forfeiture of property transferred to third parties—if, based on circumstances surrounding the acquisition, one could have suspected that the property derived from a prohibited act. This means that even foundation beneficiaries or shareholders in special-purpose vehicles may be stripped of assets if their source was criminal activity.
Article 44a of the Criminal Code goes further still: upon conviction for an offense yielding substantial financial gain, the court may order forfeiture of an entire enterprise—if it served to commit the crime or conceal the proceeds. This provision applies even to enterprises not owned by the perpetrator, provided the owner acquiesced to the firm’s use for criminal purposes.
The conclusion is unequivocal: asset protection is an instrument for those who conduct business lawfully and wish to guard against business risks or overreach by authorities. It is not—and never will be—a tool for concealing the proceeds of crime. He who builds protective structures on foundations of illegal income builds on sand.
Summary
Seizure of company assets without a judgment constitutes a significant interference with property rights, which nevertheless finds justification in the need to secure future claims of the state or aggrieved parties. An entrepreneur should:
- Know the legal basis and prerequisites for applying security measures.
- Build protective structures in advance, at a time when no threat yet exists.
- Actively use means of appeal.
- Remember the limits of legality in protective actions.
Sun Tzu wrote: “The supreme art of war is to subdue the enemy without fighting.” In the context of asset protection, this means that the most effective defence against seizure is legal architecture built before anyone knocks on the door.
Related Topics:
Disputes with the tax authorities
Every stage of a tax procedure closes off arguments that were available at the previous one, and the clock runs whether or not the file is ready. We act in disputes with the tax authorities at both administrative instances and before the administrative courts, as well as in the matters that run alongside the main dispute, from limitation periods and defective service to payment relief.
Robert Nogacki is a Polish attorney at law (radca prawny), the founder and managing partner of Kancelaria Prawna Skarbiec (Skarbiec Law Firm), which has operated continuously since 2006.
The law is equal for everyone, but the parties rarely are: on one side stands an organization with time, money, and lawyers, on the other a person with one business, one nest egg, and one life.
Clients rarely come to him with a legal problem. They come with a problem that also has a legal side: an audit that began with a single invoice, money entrusted to someone who has disappeared, a company that has to be passed on before it is too late. Most such matters are decided long before the first letter is written, in decisions made without asking and in deadlines nobody remembered. So he begins by asking how the client got here, not what the client should have done.
He advises entrepreneurs and families from more than a dozen countries, including those whose accounts the tax office has just seized and who do not know what to do tomorrow morning. He defends them in tax audits, customs and fiscal inspections, disputes with the tax authorities, and criminal tax proceedings. He represents victims of investment fraud and Ponzi schemes. He helps families set up family foundations and plan succession, so that a life’s work outlasts a single generation.
Not every case can be won. Every case can be run so that the client knows where they stand. Since 2006 he has represented the victims in the WGI case (Warszawska Grupa Inwestycyjna, the Warsaw Investment Group), one of the longest criminal cases in the history of the Polish financial market, because some things must not be left half finished, even when they take two decades. In the case of the collapsed cryptocurrency exchange Zonda (Zondacrypto, operated by BB Trade Estonia OÜ), he represents several hundred victims in the criminal investigation conducted by Poland’s National Prosecutor’s Office and in the Estonian bankruptcy proceedings.
Kancelaria Prawna Skarbiec is listed in the rankings of Poland’s largest tax advisory firms published by Dziennik Gazeta Prawna and Rzeczpospolita, and it is a four-time recipient (2015 to 2018) of the European Medal awarded by the Business Centre Club and the European Economic and Social Committee. Robert Nogacki publishes regularly, in the press and on the firm’s website, for people who have a problem rather than a law degree, because a legal opinion the client cannot understand protects only the lawyer.
He believes that the best legal advice is the kind that means the client never has to appear in court.
