Banking & Fintech

Does a Polish branch of EU e-money institution has AML obligations in Poland?

Under art. 8 of AML Act the branch must designate an employee holding a managerial function responsible for ensuring the compliance of activity of the branch as well and its employees and persons acting for its benefit. The responsible employee submits notifications under AML Act to the General Inspector of Financial Information (“GIIF”).

Furthermore, pursuant to art. 27 of AML Act the branch shall identify and assess the risk connected with money laundering and terrorist financing related to its operations. In the process of assessment the branch shall take into account the statutory guidelines including national risk assessment and the report of the European Commission referred to in art. 6(1)-(3) of Directive 2015/849. The assessment must be made in writing or electronic form and needs to be updated at least once every 2 years as well as it must be presented to GIIF upon its demand.

The branch must also apply the financial security measures taking into account all the factors enlisted in the applicable provisions of the AML Act. These measures may be simplified or enhanced should the statutory requirements for applying such procedure are met as to the given transaction. The standard procedure involves applying regular financial security measures when establishing of business relationships; conducting an occasional transaction jointly amounting to EUR 15,000 or transfer of funds exceeding EUR 1,000; suspicion of money laundering of terrorist financing; doubts as regards the accuracy or completeness of the customer identification particulars obtained so far. The analysis must be ongoing and the measures shall be applied also in the event of changes in business relations with partners would so far were not subject to such scrutiny.

On some occasions the branch may waive some of these measures with respect to the electronic money transactions.

On the other hand if the branch is unable to apply any of the required financial security measures, it must cease actions related to a given partner or transaction.

Also, the branch must obtain statements regarding persons politically exposed within the structures of its clients.

Another obligation involves five-year long period of mandatory storage of the documents and evidence after the transaction was made or relationship ended.

One of the essential obligations of the branch is an independent application of an internal procedure as regards combating money laundering and terrorist financing, setting out rules of notifying GIIF of transactions and offence suspicions. The whistleblowing procedure enabling protected anonymous notifications from the employees of irregularities within the structure of the branch must be regulated in such procedure. The applicable provisions of art. 54 of AML Act ensure the secrecy of the notifications to GIIF which are explicitly excluded as regards the entities within the capital group (subsidiaries, branches etc.).

Last but not least, the essential reporting obligations apply to the branch as well. Under art. 77 of AML Act the branch submits electronically institution’s identification form to GIIF. The branch also notifies GIIF of the transactions to which the financial safety measures are applied within 7 days from the dates indicated in art. 72 (5) of AML Act. The branch also submits electronic reports to GIIF on the suspicions of money laundering or terrorist financing offence within two days of their confirmation. The branch is also obliged to duly cooperate with GIIF and other supervisory bodies, if applicable. Moreover the branch should notify GIIF of suspicious transactions and may be obliged to trigger a blockade of funds from 24 to the maximum of 96 upon authority’s demand.

The branch is also obliged to notify the prosecutor of crime suspicion whenever the property values may be proceeds of some other offence than money laundering or terrorist financing or a fiscal offence.

In some cases as regards persons indicated in art. 118 and 119 of AML Act, the branch must apply restrictive financial safety measures specified therein inclusive of freezing funds or making them unavailable on the conditions set out therein.

The final and essential obligation of the branch is the submission to the control carried out under AML Act by authorised supervisory bodies.

To summarize, the obligations under AML Act as a rule also concern branches of EU e-money institutions (and branches of EU payment institutions as well) with reservations made towards nature of its operations

Author team leader DKP Legal Piotr Glapiński
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