Immigration law /

New Act on counteracting money laundering and terrorist financing

On 28th of May 2018, the President of the Republic of Poland signed a new Act on counteracting money laundering and terrorist financing (Journal of Laws 2018, item 723, Parliamentary print no. 2233), which introduced significant changes to the existing regulations. The implementation of the new act is a result of the obligation to implement Directive 2015/849 of the European Parliament and of the Council of 20th of May 2015.

Obliged entity

Act of 1st of March 2018 on counteracting money laundering and terrorist financing (hereinafter referred to as AML act), imposes on obliged institutions certain specific obligations arising from mechanisms designed to prevent money laundering. First of all, it should be pointed out that the list of entities falling within the scope of the definition of the obliged institution has been changed. According to the AML act obliged entity is inter alia:

  1. national payment institutions,
  2. loan institutions within the meaning of the Consumer Credit Act,
  3. entrepreneurs providing services in the matter of:
  • formation of a legal person or an organizational entity without legal personality (the so-called sellers of ready-made companies),
  • providing a registered office, business address or correspondence address and other related services for a legal person or an organizational entity without legal personality (virtual office services).

Obligation related to appointing personnel

New provisions of AML act imposed on obliged institutions an obligation to appoint a senior management personnel responsible for performing obligations specified in the act and in the case of obliged entity has a management board or other management body, a person should be appointed from among the members of that body to be responsible for implementing those obligations. Obliged entities are also supposed to appoint an employee (holding a management position), which will be responsible for ensuring compliance of the activities of the entity and its employees (and activities of other persons performing on behalf of the entity) with the provisions of the AML. In the case of sole proprietorship, the above duties shall be performed by the person conducting the activity. The scope of information provided by the entities is contained in Chapter 7 of the AML Act, in particular in Articles 72, 74, 86 and 89.

Risk assessment

Another obligation of the obliged entities is to periodically assess the risks of money laundering and terrorist financing. This assessment shall cover risks related to the activities of the obliged entity, including risks related to clients, countries/geographical areas, products, services, transactions, and channels of their supply. The risk assessment shall be in paper or electronic form and shall be updated at least every two years. The General Inspector of Financial Information shall have the right to request the entity to provide such risk assessment.

Application of Financial Security Measures (CDD)

The new law is based on the current terminology and consistently uses the term „financial security measures” to describe „customer due diligence measures”(Know your customer). The following CDD measures can be distinguished:

  1. identification of the customer and verification of his identity;
  2. identification of the actual beneficiary and undertaking justified activities,
  3. evaluation of economic relations and, where appropriate, obtaining information on their purpose and intended nature,
  4. current monitoring of customer business relations.

In the scope of the new regulations on the protection of natural persons with regard to the processing of personal data (GDPR), it is worth pointing out that AML act directly indicates that the obliged entities may process data contained in the customer’s identity document and may make copies thereof. The AML act also provides for the possibility to entrust the use of CDD measures to other entities.

Politically exposed persons (PEP)

The AML act also extended the list of politically exposed persons. The analysis in the scope of PEP concerns both customers and actual beneficiaries. In order to comply with the act, the obliged entity will have to collect a statement from the client „I am / I am not PEP” together with information on criminal liability for making false statements. This statement may be made in writing or in a documentary form. In order to maintain the documentary form of a legal act, it is sufficient to submit a statement of will in the form of a document, in a manner enabling the identification of the person delivering the statement.

Obligation to keep the documents

The obliged entities shall keep documents for 5 years period, starting from the first day of the year following the year in which the business relationship with the customer ends or in which occasional transactions were carried out. In addition, the obliged entity shall keep the results of the analyses of the transactions carried out (Article 34 section 3 of the AML act) for a period of 5 years from the first day of the year following the year in which they were carried out.

Internal procedures

The internal procedure is supposed to be an internal act of the obliged entity, in which entity will specify the rules of conduct implemented by the entity in order to properly fulfil the obligations imposed on it in the field of counteracting money laundering and terrorism financing. The definition of those rules should take into account not only the purpose for which they are implemented, namely the proper limitation and management of the identified risks of money laundering and terrorism financing, but also the nature, type and extent of the business of the obliged entity.

Obligation to provide training

Obligated entities shall ensure that persons performing duties in the matter of counteracting money laundering and terrorism financing participate in training courses related to those duties. The AML act provides penalties for failure in providing training courses.

The Act enters into force on 13th of July 2018.

Author team leader DKP Legal Piotr Putyra
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