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Big AML changes ahead

Another version of the draft of February 27, 2020, the Act amending the Act on counteracting money laundering and terrorist financing and some other acts appeared on the website of the Government Legislation Center. The amendment implements Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on preventing the use of the financial system for money laundering or terrorist financing and amending Directive 2009/138 / EC and 2013/36 / EU.

The directive must be implemented into the national legal order soon, by December 3, 2020. Meanwhile, the current bill raises questions about the sense of some regulations, and imposes rather inconvenient additional obligations on obliged entities.

For example, art. 35 of the AML Act, which will henceforth require financial security measures („FSM„) also in the situation of “data changes” i.e. changes to previously agreed customer or beneficial owner data. „Data changes” are not defined. Therefore, it should be assumed that even cosmetic changes, such as address changes (or removal of obvious typing mistakes) will make it necessary to re-verify the client or beneficial owner. The answer to the question about what kind of change of data justifies re-verification, unfortunately, is absent in the justification of the bill.

What is more, art. 43 paragraph 4 in the new wording, will require institutions to intensify FSM and inspect the circumstances, including in the event of „disclosure” of „complex” transactions. Unfortunately, it is not known what transactions, according to the legislator, are „complicated” and what their „disclosure” is to involve. Considering that the obligated institutions themselves determine the scale of the transaction risk, a state of uncertainty will arise as to how much depends on them and what results from the provisions.

Further difficulties will arise in connection with the new Art. 44a of the Act. This provision will impose on the obligated institution additional obligations related to transactions carried out with the participation of entities established in a third country. From now on, it will not be enough to use the enhanced FSM referred to in art. 44 paragraph 1. In addition, it will be necessary to: take additional steps as part of the increased FSM; implement intensified obligations related to the provision of information or transaction reporting or limit the scope of economic relations.

The change in art. 50 of the Act, paragraph 1 involves adding second sentence which requires ongoing verification and – if necessary – updating the internal AML procedure of the obligated institution. Until now, this onerous obligation had to be dealt with once a year. At present, institutions will have to have constantly finger on the pulse of updating procedures.

Reluctantly accepted changes will probably include point 10 added to art. 50 paragraph 2. The provision will introduce the obligation to record discrepancies between the information gathered in the CRBO (Central Register of Beneficial Owners) and information obtained about the beneficial owner from the client itself. In practice, this will come down to verifying whether clients have entered correct data in CRBR. It is impossible to avoid the impression that this is an attempt to transfer the obligation to verify CRBR from the State to economic participants. It is worth pointing out that the rules for monitoring these discrepancies (as well as the rules for documenting obstacles identified in connection with the verification of the identity of the beneficial owner and actions taken in relation to the identification as the beneficial owner of a person in a senior management position) will have to be included in the adopted and updated procedures.

Important changes in the context of the functioning of the CRBR include also those made in art. 58 point 5 of the Act, expanding the catalogue of entities obliged to submit information to the register by: some trusts, partner companies, European economic interest groups, European companies, cooperatives, European cooperatives, associations subject to entry in the National Court Register, foundations. Article 60a will also impose on the beneficial owners themselves the obligation to provide documents and information necessary for correct notification.

Finally, it is worth noting that the amendment extends the period of storage of personal data in CRBO to 10 years.

The amendment raises many questions about the transparency of regulations and the burden on obligated institutions. As always with such comprehensive changes, there will be doubts about the practice of applying the rules and enforcing them by regulatory bodies. There are also natural fears whether the amendment is so comprehensive that it will lead to compliance with the new directive at once, or whether we will be dealing with subsequent changes. The latter entrepreneurs certainly would like to avoid.

Author team leader DKP Legal Piotr Glapiński
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