Due to the development of modern payments methods, the legislator has been forced to implement security measures related to this type of transaction. The framework for financial security system is set out in the AML Act. Find out all necessary details in the article below.
Table of Contents
- What is the Polish AML Act and what does it cover?
- Financial information authorities specified in the Polish AML Act
- The role of obligated institutions in the Polish AML Act
- National risk assessment in the Polish AML Act
- Financial security measures from the Polish AML Act
- Sanctions from the Polish AML Act
- Polish AML Act – Summary
What is the Polish AML Act and what does it cover?
The Act of 1 March 2018, on preventing money laundering and terrorist financing (the AML Act), defines:
- principles and procedures for preventing money laundering and terrorist financing,
- conditions for conducting business activities by certain obligated institutions,
- entities and authorities operating within the financial security system. It also specifies their rights and obligations.
The regulation aims to end the phenomenon of laundering dirty money. This means stopping the implementation of money obtained from illegal sources or intended for financing illegal activities into legal circulation.
Financial information authorities specified in the Polish AML Act
At the forefront of the Polish system to prevent money laundering and terrorist financing are:
- the minister responsible for public finance as the supreme financial information authority;
- General Inspector of Financial Information (GIFI).
Among the GIFI’s duties are:
- analyzing information about asset values that the Inspector General suspected was related to the crime of money laundering or terrorism financing;
- conducting procedures to suspend transactions or block accounts;
- requesting information about transactions and making them available;
- providing authorities with information and documents justifying the suspicion of committing a crime.
The Financial Security Committee operates under the GIFI. It performs an opinion-giving and advisory function. The tasks of the Financial Security Committee include:
- reviewing the national risk assessment of money laundering and terrorist financing;
- issuing recommendations for applying special restrictive measures against individuals or entities;
- analyzing and assessing legal solutions related to preventing money laundering and terrorist financing;
- expressing views on changing laws to prevent money laundering and terrorist financing.
The role of obligated institutions in the Polish AML Act
Obligated institutions are entities obligated under the Polish AML Act to apply specific measures and tools to prevent money laundering and terrorist financing. These include:
- domestic banks, branches of foreign banks, branches of credit institutions, financial institutions having their registered office in Poland, and branches of financial institutions not having their registered office in Poland,
- savings and credit unions and the National Savings and Credit Union,
- domestic payment institutions, domestic electronic money institutions, branches of European Union payment institutions, branches of European Union and foreign electronic money institutions, small payment institutions, payment service offices, and paying agents,
- investment firms, custodian banks, and branches of foreign investment firms conducting activity in Poland,
- foreign legal persons conducting brokerage activity within the territory of Poland. This includes branches and commodity brokerage houses engaging in such activities,
- Companies operating a regulated market within the auction platform’s operation.
The duties of obligated institutions include, among others:
- recognizing and assessing the risk of money laundering and terrorist financing related to business relationships with customers or occasional transactions. This is based on implementing appropriate financial security measures,
- notifying GIFI of circumstances that may indicate suspicion of money laundering or terrorist financing. In case of a reasonable suspicion, informing that a specific transaction or specific assets may be linked to either of the aforementioned crimes,
- providing GIFI with information on so-called high-value transactions. There are exceptions specified in the Act.
GIFI monitors the actions of obligated institutions in fulfilling their statutory obligations. Other authorities, can also control obligated institutions according to separate regulations. These authorities include president of the National Bank of Poland, the KNF and head of the Tax Office.
National risk assessment in the Polish AML Act
GIFI, in cooperation with the Committee, collaborating units, and obligated institutions, develops the national risk assessment. Its relevance is verified. The GIFI prepares a new evaluation at least every two years.
The national risk assessment includes, among other things:
- description of the methodology of the national risk evaluation,
- description of phenomena related to money laundering and terrorist financing,
- applicable regulations regarding money laundering and terrorist financing,
- determining the risk level of money laundering and terrorism financing in Poland with justification,
The minister of public finance approves the national risk assessment.
Financial security measures from the Polish AML Act
The Polish AML Act imposes on obligated institutions the obligation to apply financial security measures. They aim to protect against the risk of money laundering or terrorist financing. Financial security measures include:
- customer identification and verification of his/her identity;
- identification of the beneficial owner. Also, taking justified actions to verify his identity, ownership and control structure;
- evaluation of business relationships;
- ongoing monitoring of the customer’s business relationships. This includes the analysis of transactions conducted within business relationships and examination of the source of assets of the customer. It applies to cases justified by specific circumstances.
In what situations do obligated institutions apply financial security measures? Here are a few examples:
- establishing business relationships,
- conducting occasional transactions:
- conducting a cash transaction equivalent to 10,000 euros or more,
- suspicion of money laundering or terrorist financing.
Sanctions from the Polish AML Act
Violation of the terms of the Polish AML Act may result, among other things, in:
- the publication of information on the obliged institution and the scope of the breach of the provisions of the Act committed by it in the Public Information Bulletin on the website of the office providing services to the minister responsible for public finance;
- an order that the obliged institution stop undertaking certain activities,
- the withdrawal of a licence or permit, or deletion from a regulated activity register,
- a prohibition on performing obligations in a managerial position for the person responsible for the breach of the Act committed by the obliged institution. It applies for a period not longer than 1 year;
- imposing a financial penalty.
Polish AML Act – Summary
The Polish AML Act introduces a range of solutions for payment transactions. This serves to ensure security of payment system and certainty of economic transactions.
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