CBAM – Publication of the draft Polish legislation
On August 30, 2024, the draft Law amending the law on the management system for greenhouse gas emissions and other substances, as well as certain other laws, appeared on the website of the Government Legislative Center. The purpose of the proposed law is to:
- ensure the proper functioning of the CBAM mechanism within the Polish legal framework during the transitional period from October 1, 2023, to December 31, 2025, and
- define the rules for granting, refusing, and revoking the status of an authorized CBAM declarant – to be in effect from December 31, 2024. This status pertains to the definitive CBAM period starting January 1, 2026.
Authorities responsible for CBAM in Poland
One of the key points of the draft law is the designation of authorities responsible for CBAM. Primarily, the entity responsible for the CBAM mechanism will be the National Center for Emissions Management (KOBiZE). Its duties will primarily include:
- Verifying quarterly CBAM reports during the transitional period;
- Making adjustments in cases where the CBAM report is not submitted on time or is submitted incorrectly;
- Imposing administrative fines on entities that fail to submit the CBAM report on time or do so incorrectly.
The authority that will assist KOBiZE in CBAM-related tasks will be the National Revenue Administration. When processing applications or providing explanations, KOBiZE will need to seek the opinion of the Head of the National Revenue Administration. This opinion must be issued within 14 days of receiving the application. It should be noted that KOBiZE may refrain from seeking an opinion if:
- An opinion has already been issued in a similar or identical case;
- The interpretation of the provisions does not raise significant doubts.
It is worth mentioning that the provisions regarding individual ruling requests, as provided for in Article 34 of the Entrepreneurs’ Law, will not apply to CBAM. According to the justification for the draft law, this is because CBAM, from a legal standpoint, does not constitute a tax, fee, or other public levy.
The Director of the Tax Administration Chamber will be responsible for granting the status of an authorized CBAM declarant. It should also be noted that the Head of the Third Revenue Office in Szczecin will be responsible for enforcement proceedings and acting as a creditor concerning the penalties provided for in the draft law.
PUESC as a CBAM management platform
The Electronic Tax and Customs Services Portal (PUESC) is intended to function as a system for managing both the rights and identity of users subject to the CBAM mechanism. To gain access to the CBAM transitional registry, authentication and verification on the PUESC platform will be necessary – without this, it will be impossible to carry out activities within the registry.
Fines and due diligence
The draft law also addresses the issue of fines – whose rules are defined in the CBAM implementing regulation. In cases where a fine is imposed on an importer by administrative decision (concerning the CBAM transitional period), it will be calculated based on the product of the number of tons of unreported emissions and the fine rate – ranging from 10 to 50 euros per ton. Since the provisions of the Code of Administrative Procedure will not apply here, the authority to which an appeal against the fine may be lodged will be the Minister of Climate.
If the importer demonstrates that necessary actions were taken to submit or correct the CBAM report, the proceedings concerning the imposition of the fine will not be initiated or will be discontinued if they have already started.
According to the justification for the law, the criterion of taking necessary actions should be understood as similar to due diligence – demonstrating that, despite following an established action plan, it was not possible to avoid a situation that constitutes a violation of the law.
Due to the above, it is crucial to introduce appropriate internal procedures concerning CBAM. If such procedures already exist, it is worth reviewing the current processes. This is particularly important now, in the context of:
- the obligation to submit a quarterly CBAM report using actual data, which may not be available or cannot be verified for accuracy;
- the prospect of introducing Polish CBAM regulations.
Having a well-organized CBAM process, reflected in an internal procedure, will undoubtedly reduce the risk of fines in the event of errors or omissions in the quarterly CBAM report. Repeated violations of CBAM provisions may prevent from obtaining the status of an authorized declarant, which would result in the inability to import goods subject to CBAM.
Status of an authorized CBAM declarant
According to the current draft law, the Director of the Tax Administration Chamber will be the appropriate authority for both granting and potentially revoking the status of an authorized CBAM declarant. The Director, as part of the decision to grant or revoke the status of an authorized CBAM declarant, will be obliged to inform the Financial Supervision Authority and KOBiZE about the decision.
Obtaining the status of an authorized CBAM declarant requires meeting specific criteria related to the financial and operational capacity of the applicant. Importers must meet the following criteria to obtain the status of an authorized CBAM declarant:
- the applicant has not committed serious or repeated violations of customs, tax, market abuse regulations, the CBAM regulation, or delegated and implementing acts adopted under the CBAM regulation, and in particular, has not been recorded for serious offenses related to their business activities within the five years preceding the application year;
- the applicant demonstrates financial and operational capacity to meet the obligations under the CBAM regulation – in accordance with Article 5(5)(f) of Regulation 2023/956, this criterion may be verified with documents such as profit and loss statements and balance sheets for up to the last three fiscal years for which accounts were closed;
- the applicant is established in the Member State where the application is submitted;
- the applicant has been assigned an EORI number in accordance with Article 9 of the Union Customs Code.
Due to the number and type of criteria, the process of obtaining status may be time-consuming – it is worth considering early preparation.
In cases of violations of the provisions by entities holding the status of an authorized declarant, KOBiZE will forward the information to the Director of the Tax Administration Chamber.
The anticipated period for the law to come into effect is November 2024.
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