AML procedure and PEP identification – new GIFI notice

Obligated Institutions (e.g. domestic payment institutions, small payment institutions, lending institutions) in Poland are required to determine whether a client or beneficial owner of a client is a politically exposed person (PEP). The General Inspector of Financial Information (GIFI) has issued a new notice providing guidance on the definition of PEP and collecting relevant statements from customers.

Politically exposed person

Under the Polish Act on Counteracting Money Laundering and Terrorist Financing (“AML Act”), a Politically Exposed Person (PEP) is defined as a natural person who performs significant public functions or occupies a significant public position. The PEP circle does not include persons holding middle and lower-level positions. A detailed catalog of PEPs is provided in Article 2.2.11 of the AML Act. It should be remembered that this is an open catalog.

If an obliged institution determines that its customer or the customer’s beneficial owner is a PEP, additional obligations arise on its side in respect of the applied financial security measures.

Summary of the GIFI’s notice:

The General Inspector of Financial Information emphasizes that:

1. the status of a PEP (including family members of such a person and persons known to be close associates of a PEP) does not depend on the person’s place of residence, citizenship, nationality, the country, or international organization in which the person holds office or position. Neither the EU regulations nor the Polish AML Act distinguishes between “domestic PEPs” and “foreign PEPs,
2. Each member state is required to compile and publish a national list of politically exposed persons. In Poland, this obligation has been fulfilled by the issuance by the Minister of Finance of Funds and Regional Policy of the Regulation of 27 July 2021 on the list of national public positions and functions that are politically exposed positions,
3. institutions covered by the AML Act are required to implement risk-based procedures to identify customers or their beneficial owners as PEPs. Article 46 of the Polish AML Act does not contain a catalog of actions allowing to determine whether a client or his beneficial owner is a PEP, although it should be noted that in practice the basic method used by most obliged institutions is to collect from clients statements as to their status, submitted under pain of criminal liability for making a false statement. Institutions may accept such declarations both in writing (a handwritten signature is required on the declaration) and in a documentary form (in the form of a document, in a way allowing to identify the person making the declaration). The GIFI indicates that to keep a document form, it is sufficient to submit a declaration in a form of an e-mail, SMS message, or fax,
4. the GIFI informs that when introducing internal procedures, obliged institutions should take into account the list referred to in Article 20a (3) of Directive 2015/849 added by Article 1(13) of Directive 2018/843, the list of national public positions and functions that are politically exposed positions referred to in the aforementioned Regulation of the Minister of Finance of Funds and Regional Policy, external databases, as well as information from other reliable sources,
5. it should be indicated that the obliged institution, in the period from the date on which a person ceases to occupy a politically exposed position until the date on which it is determined that no higher risk is associated with that person, but for no less than 12 months, shall apply to such person measures taking into account this risk.

Questions or concerns – contact our law firm

Should you have any questions or doubts, we encourage you to contact our Law Firm. Our lawyers from the AML law practice team will be happy to answer your questions. Inquiries can be directed to: [email protected]