Concession control - what is its scope?
Conducting business activity may sometimes require obtaining an appropriate permit or license. If the entrepreneur meets the specific conditions, he can easily obtain the relevant document - however, this does not mean that he can provide his services without restrictions from now on. Concessions are subject to control. The article will describe how concessions are controlled.
What is a concession?
Some types of economic activity may be top-down limited by the state. In practice, the possibility of performing them will most often be associated with obtaining a permit or license - a document authorizing the sale of designated goods (most often drugs, tobacco and alcohol products) or the provision of specific services (e.g. gambling).
Pursuant to Art. 37 Rights of entrepreneurs, the pursuit of economic activity in areas of particular importance for the security of the state or citizens or other important public interest requires a license to be obtained only if this activity cannot be performed as free or after obtaining an entry in the register of regulated activity or a permit.
Granting, refusing to grant, changing, suspending and revoking a license or limiting its scope in relation to the application for granting a license is made by way of a decision of the minister competent with regard to the subject of business activity requiring a license, unless separate regulations provide otherwise.
Judgment of the SA in Warsaw of April 19, 2018 (file reference number VII Aga 1285/18)
The bankruptcy of an entrepreneur makes it impossible to grant him a concession for business activity, because bankruptcy means the end of the economic process, and granting a concession in this situation would conflict with the idea of business activity, assuming certainty and durability of trading, and thus would violate an important public interest.
Activities requiring a license
Obtaining a license is required primarily as part of business activities in the field of:
aviation law - concerns mainly the carriage of passengers by airlines;
public collective transport;
production of explosives, weapons, ammunition and products and technologies for military or police purposes;
geological and mining law - concerns mainly the extraction of minerals and earth deposits;
protection of people and property;
Each activity, the scope of which corresponds to the above catalog, must have an appropriate license issued by a competent state authority. If the entrepreneur does not obtain such a permit, and nevertheless continues his activity, he is exposed not only to financial penalties, but also to criminal liability. The sanctions for the lack of a license are really high - we often count them in millions of Polish zlotys, the legislator also provides for imprisonment up to 5 years.
Once obtained, the license does not mean that the entrepreneur will use it for life. In the course of the business, it is possible to verify the correctness of its use - of course, it is about controlling the concession.
Control activities are aimed at checking the correctness of the services provided by the entrepreneur and whether the concession is not abused. Pursuant to Art. 40 Entrepreneurs' rights, the concession authority is entitled to control economic activity in the scope of:
compliance of the activities performed with the granted concession;
compliance with the conditions for conducting business activity;
state defense or security, protection of the security or personal rights of citizens.
The inspection may be carried out by persons authorized by the relevant licensing authority. Due to the strict nature of the license, the inspectors have special powers in the performance of their activities.
Concession control - scope
Persons authorized by the concession authority to carry out inspections are entitled in particular to:
enter the real estate, facility, premises or part thereof, where the economic activity covered by the concession is performed, on the days and hours when this activity is performed or should be performed;
request oral or written explanations, presentation of documents or other information carriers and access to data related to the subject of the inspection.
If deficiencies are found during the inspection, the concession authority may request the entrepreneur to remedy them within the prescribed period. Such a request requires, however, that the controlling authority, and in fact the persons performing inspection activities on behalf of the concession authority, have previously demonstrated the fact of violation of the granted concession and the scope of irregularities (the degree and nature of the violations found).
Importantly, if the breaches of the entrepreneur are very gross, the concession authority has the right in such a situation to immediately withdraw the granted concession, without first calling for explanations or remedying the deficiencies. However, it depends mainly on irregularities in the scope of the concession used and the type of activity conducted - for example, the regulations on concessions for the production of explosives are stricter than the legal regulations covering the licensed property protection activity.
Concession control - powers of the controller
Control activities may only be undertaken with respect to the concession used. In other words, the auditors are not allowed to check the activities of a given company that do not have to be licensed. Moreover, the control cannot be directed in any way to the private issues of the entrepreneur and people working with him - it must be of a purely professional nature.
Before commencing his activities, each inspector should present an identity card, authorization from the concession authority and a valid decision on the initiation and scope of inspections at the premises of a given workplace. It is also necessary to provide information about the date of the planned activities.
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Concession control - effects
Control activities can end in two different ways:
a statement that the concession is performed correctly and that there were no shortcomings in this respect;
stating that there has been an irregularity in the use of the granted concession, and then its withdrawal (in the case of gross abuses) or the undertaking's obligation to provide explanations and remedy the defective actions (in the case of minor abuses).
If the control body finds that there has been an abuse in the performance of the concession, it is obliged to issue an appropriate post-control decision, which must be combined with a detailed post-control protocol. The entrepreneur must be informed about the right to appeal within the prescribed period (usually 14 days from the receipt of the relevant decision).If, in the entrepreneur's opinion, there were deficiencies during the inspection or its effect is not true, it will be necessary to file an appropriate appeal and further clarify the whole matter. It is true that the Code of Administrative Procedure does not require the appeal to contain any justification (it is sufficient for the appellant to be dissatisfied with the decision issued), but it is a good idea to collect evidence that will convince the inspection body of the validity of the statements contained in the appeal.
In practice, it is often enough for the entrepreneur to remedy minor shortcomings so that he can continue to use the concession granted to him without any problems. However, if the violations are too serious, the authority will withdraw the permit to conduct a specific activity and impose a fine, and in extreme cases also a penalty of imprisonment on the entrepreneur. As a rule, the loss of the license is not permanent, so it is possible to apply for it again in the future.
Concession control - summary
The audit of the granted concession is aimed at verifying the correctness of the business activity which, due to its nature, requires an appropriate permit. Control activities are undertaken by persons appointed by the authority that granted the concession. The inspection may end with a call to remedy the deficiencies, and in extreme cases with the immediate withdrawal of the concession (then a financial penalty is also imposed on the entrepreneur, and sometimes also imprisonment). In such situations, however, it is possible to appeal against an administrative decision imposing sanctions for misuse of the concession.