Provisions allowing the president of URE to punish non-constitutional entrepreneurs

The essence of the problem

The provisions of PrEnergy supply for the work to submit to the president of the ERO appropriate monthly reports on the types and quantities of liquid fuels produced, imported and exported and intended. This work is incumbent on energy undertakings licensed to produce liquid fuels or to trade liquid fuels abroad and on importing operators, i.e. those which import liquid fuels themselves or through another operator within the territory of the country as part of intra-Community acquisition or import.

The list of liquid fuels whose imports affect reporting obligations to the president of the ERO results from the Regulation of the Minister of State Act of 27.11.2019 on the detailed list of liquid fuels whose production, retention or handling, transmission or distribution, trading, including abroad trade, requires concessions and whose import requires entry in the registry of importing entities (Journal of Laws of 2021 item 2336). The applicable legislative delegation to issue the Regulation is set out in Article 32(6) of PrEnergy.

In practice, ‘liquid fuels’ may be substances that have no connection with the production or processing of energy or that have a constant concentration state within the standard temperature scope (e.g. lubricants or oils utilized in the production process). The catalogue of specified fuels contained in the Regulation is defined by CN codes, regardless of their physicochemical properties or their actual use.

Therefore, the work to study frequently affects unaware entrepreneurs outside the energy manufacture (as importing operators). We reported this in 1 of the earlier entries (Derogation from the administrative punishment for late submission of reports on imports of liquid fuels).

Where specified operators find out of existing obligations and apply voluntarily for entry in the registry of importing operators and for late reports, The president of the ERO, pursuant to Article 56(1)(12b) in Article 56(2)h(4) PrEnergy, imposes administrative penalties of PLN 10,000 for each period of non-reporting. At the same time, the PrEnergy rules supply for a rigid punishment and do not give emergence to a average penalty. Given that entrepreneurs frequently deficiency cognition about reporting obligations for respective or respective months, the full sum of penalties imposed on them by the president of ERO goes into hundreds of thousands of zlotys.

This in turn leads to completely absurd situations. An entrepreneur not operating at all in the energy sector, knowing – most frequently by pure chance – that it is regulated by PrEnergy, fulfils the breached obligations and submits outstanding reports. Despite this commendable attitude, he is then punished by the president of URE. This means – no little than – that an entrepreneur who has “reported on himself” is being punished to the exact same degree as an entity who is deliberately violating duties and is caught in a “hot act”.

Unfortunately, the erstwhile case law of the general courts and the ultimate Court was not uniform. While any courts were not deaf to the arguments of convicted traders and were not sanctioned on the basis of Article 56(6)a of PrEnergy, there was besides a crucial number of opposing decisions. The position presented in them was to conclude that since there was a breach, there must be punishment. Nothing else matters, and the voluntary submission of outstanding reports does not in itself constitute grounds for waiving sanctions.

In 1 of the cases – initiated by the appeal of a penal entrepreneur – the Court of Appeal in Warsaw noticed the problem and decided to mention the applicable legal question to the Constitutional Court. In the opinion of the court asking the question, in the event that the legislature determines a fine for an administrative decision of only 1 amount, the examination of appeals against the decision of the president of ERO would be of a façade nature only.

Constitutional Court takes the side of entrepreneurs

By judgement of 17.10.2024, P 3/23, the Constitutional Court ruled that Article 56(2)h(4) in conjunction with Article 56(1)(12b) of the PrEnergy, in so far as it precludes the general court from measuring the monetary punishment for the submission of a study after the deadline referred to in Article 43d(1) of the PrEnergy, is incompatible with Article 2 in conjunction with Article 10(1) and (2) and Article 175(1) of the Constitution of Poland.

At the same time, the Constitutional Court stressed in its justification that, with PrEnergy's government so shaped, the control of the activities of the public authority as to the adequacy of the punishment would only be illusory. The appearance of judicial review would so contradict both the law of the court (Article 45(1) of the Constitution of the Republic of Poland) and the monopoly of courts for the exercise of justice (Article 175(1) of the Constitution of the Republic of Poland). The binding of a digitally marked administrative punishment to prevent the court from carrying out an overall examination of the case would restrict the right to a court and the courts' monopoly on the exercise of justice. specified a solution would besides be unfair, as it would bring together those who act in bad and good faith, guilty and innocent. In this case, the nature of the administrative sanction would prevent the court from examining the individual situation of each individual being punished, the full assessment of his or her activities and the state, as well as the degree of guilt or the real socio-economic consequences that will affect him or her.

Effects of the ruling

The entrepreneurs who have already received final decisions dismissing their appeals should consider the anticipation of reopening judicial proceedings in their cases with mention to the Constitutional Court's stated ruling.

The problem is, however, that the judgement of the Constitutional Tribunal has not yet been published in the authoritative diary of the Laws and it is not known whether this will happen in the close future. In view of the doubts expressed as to the composition of the Constitutional Court, its ruling is not presently published. This is so an crucial formal obstacle to the possible resumption of proceedings, as the Court ruling only enters into force on the date of publication in the authoritative body in which the normative act was declared (Article 190(2) and (3) of the Constitution of the Republic of Poland). In another words, this judgement of the Constitutional Court requires publication in the authoritative diary of the Laws to enter into force. In turn, an action for reopening pursuant to Article 407(2) of the Constitutional Tribunal shall be brought within 3 months of the entry into force of the Constitutional Court ruling. However, the situation in which, despite the favourable judgement of the Constitutional Court, judicial proceedings cannot be resumed seems highly injurious from the position of the entrepreneurs being punished.

The Constitutional Court’s ruling should, on the another hand, affect the pending cases and the way in which they are settled by the courts (no substance the problem identified with the deficiency of publication). It is hard to imagine that the court could dismiss the appeal of an entrepreneur, without even considering the found unconstitutionality of the basis for ruling.