Financial Crime World

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AML/CFT Regulations: Institutions Must Provide Detailed Justification for Suspicious Activity Notifications

Warsaw, Poland - New Guidance on Justification Requirements for Suspicious Activity Notifications

The General Inspector has issued a new guidance on the requirements for obligated institutions to provide justification for notifications related to suspected money laundering or terrorism financing activities.

According to Article 74(3)(8) and Article 86(2) of the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Act, institutions must include a detailed justification when submitting notifications regarding suspicious activity. This includes:

  • Information on customer due diligence measures taken before and during the business relationship
  • Any subsequent activities undertaken

Enhanced Customer Due Diligence Measures Still Required

The General Inspector emphasized that the submission of these notifications does not exempt institutions from applying enhanced customer due diligence measures or ongoing monitoring of high-risk customers. Institutions must also:

  • Conduct thorough risk assessments
  • Update their internal procedures accordingly

Scrutiny of Companies Established in Poland by Foreigners

In a notable case, the General Inspector highlighted the importance of scrutinizing companies established in Poland by foreigners with no fixed address in the country. In such cases, institutions are advised to request additional information about:

  • The company’s connections to Poland
  • Its employees, contractors, and other relevant details

Consequences of Non-Compliance

The General Inspector also reminded obligated institutions that failure to comply with AML/CFT regulations can result in administrative penalties, as specified in Article 147 of the Act. This includes:

  • The obligation to prepare risk assessments
  • Apply customer due diligence measures
  • Document transactions
  • Provide information on request from authorities or the General Inspector

Strengthening Efforts Against Money Laundering and Terrorism Financing

The new guidance aims to strengthen Poland’s efforts against money laundering and terrorism financing by ensuring that obligated institutions are equipped with the necessary tools and procedures to identify and report suspicious activity promptly and effectively.