Charges against the accused and the basis for the proceedings
The HWW law firm acted in defense of our client – the chairman of the board of directors of a company that is a national payment institution – in criminal proceedings that ended in a final acquittal. The courts of both instances fully shared our reasoning, dismissing the charge of conducting payment activities without the required authorization.
The case involved a charge of committing an offense under Article 150(1) and (3) of the Payment Services Act of August 19, 2011, in conjunction with Article 65(1) of the Penal Code. The prosecutor’s office accused the defendant of being the chairman of the board of directors of a company authorized by the Financial Supervisory Commission to provide domestic payment services, conducting cross-border transactions on its behalf without first notifying the FSC of his intention to provide payment services in the territory of other member states. The total value of the charged transactions amounted to multimillion-dollar sums in several currencies, and the prosecutor’s position was that the accused had made this a permanent source of income for himself.
The proceedings took several years and were multifaceted, requiring an in-depth analysis of both national laws and European regulations on the single market for payment services.
Legal argumentation of the law firm
The defense focused on demonstrating that the defendant did not exhaust the “not being authorized” characteristic within the meaning of Article 150(1) of the Payment Services Act. The key element of the argument was to show that the FSC’s authorization granted to the company to provide payment services as a national payment institution was not territorially limited – its scope concerned the type of services provided, not the geographical area in which they were performed.
The defense showed that the provisions of Article 91 of the Payment Services Act explicitly grant a national payment institution the right to engage in cross-border activities within the scope of its authorization. The procedure provided for in Article 95 of the Act, which was in effect on the date of the act, was of a purely notification nature – it boiled down to informing the FSC of the intention to undertake cross-border activities, and the supervisory authority was only required to forward this notification to the competent supervisory authorities of the host member state. The procedure did not confer new powers on the payment institution, but was a confirmation of the powers it already had.
The defense also stressed that the wording of Article 95 of the Law in effect at the time – unlike Article 92, which governed the provision of services by a branch or agent – did not provide any formal requirements for filing a notice, did not specify the consequences of failing to meet them, nor did it make the possibility of undertaking cross-border activities conditional on obtaining a decision from the FSC or an entry in the register. It was therefore pointed out that the company’s procedural failure, if any, could only be considered within the scope of the FSC’s supervisory powers under Article 105 of the Act, and not as fulfillment of the elements of a crime. At the same time, it was emphasized that the scope of the company’s cross-border activities was fully consistent with the type of services covered by the FSC’s authorization.
Effects of actions and protection of customer interests
The District Court, in a judgment dated July 2, 2025, acquitted the defendant of the charge. The prosecutor’s office appealed, raising the charge of violating substantive law. The District Court of Warsaw upheld the appealed ruling, fully sharing the arguments adopted by the Court of First Instance and presented by the HWW law firm during the proceedings.
The appellate court unequivocally stated that while the company’s failure to comply with the passport procedure constituted a failure, it did not exhaust the elements of Article 150(1) of the Payment Services Law. It was pointed out that since the company had a license from the FSC and conducted payment services in accordance with its content, the defendant representing the company did not act “without being authorized” within the meaning of the aforementioned provision. The costs of the proceedings at both instances were charged to the State Treasury.
The importance of the case and its implications
The case is of momentous importance for the entire payment services sector in Poland. The rulings of both courts are an important voice in the discussion of the limits of criminal liability for procedural violations in regulated financial activities. The judgments confirm the fundamental principle that the elements of the offense under Article 150(1) of the Payment Services Act relate to the type of services provided, and not to the territorial scope of the payment institution’s activities. Failure to comply with notification obligations can at most lead to administrative-legal liability, not criminal liability.
The rulings send a clear signal to the market – regulators and the Prosecutor’s Office, when pursuing criminal liability of entities operating in the payment services market, are obliged to demonstrate precisely that there was an activity without the required authorization, and not just a violation of procedural requirements. Cases involving complex regulation of the financial sector require in-depth legal analysis, and hasty filing of criminal charges in situations that are the domain of administrative oversight can lead to unfounded criminal liability for those acting in good faith within the scope of their authorizations.
The law firm’s team responsible for handling the case
The HWW law firm’s litigation team, under the supervision of attorney Damian Wojnowski, LL.M. – Partner, was responsible for handling the case.
Frequently asked questions
Does conducting cross-border transactions by a domestic payment institution without prior notification to the Polish Financial Supervision Authority (KNF) constitute a crime?
No, such action does not fulfill the elements of the crime under Article 150 paragraph 1 of the Payment Services Act, provided that the company holds a valid KNF license for the type of services provided. The notification procedure is purely notificational in nature and does not grant new authorizations, but confirms those already held. Any procedural deficiencies may be considered solely within the framework of administrative supervision, not criminal.
What was the key argument of the defense in this case?
The defense demonstrated that the KNF license granted to the company was not territorially limited, which means that the president did not act without authorization. The key point was indicating that the regulations grant a domestic payment institution the right to conduct cross-border activities within the scope covered by the license. The court recognized that the lack of notification of the intention to provide services abroad does not change the fact of having proper authorization to conduct such activities.
What consequences are threatened for failure to fulfill the obligation to notify cross-border activities?
Failure to fulfill the notification obligation may result in administrative liability within the framework of KNF’s supervisory powers, but does not lead to criminal liability. Courts have confirmed that procedural deficiencies do not fulfill the elements of the crime of conducting activities without required authorization. The supervisory authority should respond to such violations through administrative measures, not criminal ones.
Does the case have significance for other payment institutions in Poland?
Yes, the rulings constitute an important voice in the discussion on the boundaries of criminal liability in the financial sector. They confirm the principle that the crime under Article 150 paragraph 1 concerns the type of services, not the territorial scope of activities. This signals to law enforcement authorities the necessity of precisely demonstrating lack of authorization, not just procedural violations.
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HWW Hewelt Wojnowski Lindner i Wspólnicy is a Warsaw law firm advising businesses and public entities. We combine experience in commercial law, energy, tax, data protection and litigation to deliver solutions tailored to our clients’ business realities.
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