Compliance

New legal regulations can lead to new obligations in relation to contractors and suppliers, and may also result in tighter requirements in production, logistics or corporate matters.

In addition to changes of a legislative nature, another area of risk in terms of legal compliance is the interpretation of the law: both at the stage of determining interpretation within the proceedings conducted by state authorities and changing the established lines of interpretation, for example as a result of case law or the issuance, in areas where this is possible, of a legal interpretation by an authority, which will change the interpretation practice in the relevant respect. Further, a failure to timely implement EU laws may lead to difficulties in interpreting legal regulations.

Being aware of the existence of risk areas with regard to law compliance, the Capital Group has taken measures to counteract the materialisation of these risks and limit their negative impact on the organisation. In 2022, a decision was made to centralise tasks and establish the Compliance Department within the Central Area of Grupa KĘTY. The key task of the Compliance Department is to ensure that the organisation’s activities comply with the changing legal environment, which is carried out through 3 main processes:

1. monitoring of the regulatory environment, focused on identifying new legal regulations in Poland and the EU which may have a direct or indirect impact on the operations of the Capital Group;
2. compliance management, which assesses the compliance of the Capital Group activities with legal regulations and verifies the completeness of internal regulations and the manner of complying with them;
3. irregularities management, which has several levels/channels of reporting for persons identifying breaches of regulations, with one of the channels in place ensuring anonymity of the person reporting.

Such structured processes and the centralisation of the compliance function make it possible to react to the emerging legal changes in advance, enabling the Capital Group to adapt to the new regulations.

Below presented are the selected Polish and European legal regulations that came into force in 2022 and have or may have effect on the operations of the Capital group.

a) New legislation in 2022:

• Act of 9 February 2022 on amending the Act – the Code of Commercial Companies and Some other Acts (Journal of Laws of 2022, item 807), introducing the term of a group of companies, as well as a series of principles regarding the accountability of management and supervisory boards, and modifies relations between the management board and supervisory board.
• New Deal 2.0 and Further PIT Changes, which introduced significant changes in PIT settlement.
• The Act of 7 October 2022 on Amendment of the Act on Corporate Income tax and Some Other Acts (Journal of Laws of 2000, item 2180), which introduced changes in CIT, particularly with regard to preparing transfer pricing files for indirect ‘tax haven’ transactions.
• The Act of 22 July 2022 on the Amendment of Some Acts in Order to Prevent Environmental Offences (Journal of Laws of 2022, item 1726), which changed the principles of accountability for environmental offences, for example by modifying the Act on Accountability of Collective Entities in that regard.
• Act on Special Measures to Counteract the Supporting of Aggression on Ukraine and Improving National Security (Journal of Laws of 2022, item 835) as well as adequate regulations in Polish implementation regulations and EU Regulations, introducing sanctions with regard to Russian aggression on Ukraine.
• German Act on Packaging (Verpackungsgesetz), amending the principles of marketing packaging in Germany.
• COMMISSION REGULATION (EU) 2022/1616 of 15 September 2022 on recycled plastic materials and articles intended to come into contact with foods, and repealing Regulation (EC) No 282/2008, in the scope in which it refers to manufacturing food packaging.

b) Regulations that were subject to legislative works in 2022 and will enter into force at a later date:

• Legislation covering the National e-Invoice System [KSeF], in relation to the required changes to the ERP system.
• Fit For 55, including with regard to emission limitations and manufacturing of plastic packaging with recycled materials.
• Package of proposals for Labour Law changes, referring, among other things, to remote work, drug and alcohol tests, or implementation of the Work-Life Balance Directive, with regard to changes in the rights and duties of employers and employees.
• Draft legislative changes with regard to the Whistleblower Protection Directive implementation, in order to ensure a new channel for law violations reporting by employees.
• German Act on Due Diligence in Supply Chain, which introduces a series of new expectations on the part of German contractors.
• Legislative projects in the European Union, regarding changes in taxonomy and scope of climate reporting. 
• Legislative project in the European Union regarding Corporate Sustainability Due Diligence Directive, as regards to the impact on the Group’s relations with contractors and suppliers, and development of more accurate customer verification systems and the whole supply chain.