Controversy around the Financial Shield: PFR is massively calling on entrepreneurs to return subsidies from anti-Covid shields.

Due to the COVID-19 pandemic in 2020, the Polish Development Fund (hereinafter: PFR) created aid programs for entrepreneurs, which were aimed at protecting against bankruptcy or liquidation due to the threat to the national economy.

Support was offered primarily under the so-called Financial Shield of the Polish Development Fund for Small and Medium-sized Enterprises and Financial Shield 2.0 of the PFR for Micro, Small and Medium-sized Enterprises, which allowed entrepreneurs to obtain financial support if certain conditions were met.

The Financial Shield of the Polish Development Fund for Small and Medium-sized Enterprises was intended for entities whose annual revenues do not exceed EUR 50 million. The PFR Financial Shield 2.0 for Micro, Small and Medium-sized Enterprises took into account, among others: employment and revenue decline calculated per employee.

In 2023, PFR began publishing the first announcements indicating the need to verify the correctness of granting government aid programs. The Central Anticorruption Bureau was involved in these activities and, according to the assumptions, was obliged to take actions aimed at reducing the risk of irregularities or abuses. Moreover, PFR has established a specialist team to carry out the so-called anti-fraud analysis, which involves detecting beneficiaries who do not meet the program conditions of the Financial Shield, including: in terms of the size of the enterprise, the number of employees and the amount of turnover.

The irregularities requiring the return of all financial support received include:
• submitting applications to large entrepreneurs not covered by the programs,
• lack of information about connections between sole proprietors and civil partnerships also applying for aid,
• adjustment of sales revenues after the date of receipt of government support.
PFR indicated that in the event of a negative verification result, the beneficiaries will be obliged to return all or part of the support granted (depending on the circumstances of the specific case). If the beneficiary does not return the support within the specified period, PFR will pursue claims through court proceedings.

According to current information shared on social media, more and more entrepreneurs are being asked to return the subsidies received. Information about receiving the PFR decision regarding the obligation to return received financial subsidies was provided by, among others: Esotiq & Henderson S.A. and Prymus S.A.

However, PFR did not specify in any way the abuses recorded in relation to the beneficiaries, pointing only to “suspicion of any type of abuse”.

Subsidies were largely non-refundable if companies managed to stay on the market and did not lay off employees. Entrepreneurs do not find any specific basis in the decisions received from PFR and clearly oppose the allegations related to providing false data or concealing it.

It should be noted here that the first interventions regarding the return of subsidies were undertaken by the Ombudsman for Small and Medium-sized Entrepreneurs, who emphasized the purpose of government assistance programs, i.e. financial stabilization of entrepreneurs and protection of jobs.

Entrepreneurs who have benefited from government support must be sure that their activities are assessed fairly and on the basis of clear, unchanging rules. In the face of economic uncertainty, trust in public institutions and clear communication regarding the requirements and consequences of using aid programs are crucial.

In the coming months, we will monitor the development of the situation and further actions of PFR and the institutions involved in the verification of subsidies.

If your company has also been affected by the situation described in the article, please contact our office.

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