Financial Crime World

Know Your Customer Policy in Poland: A Guide for Financial Institutions

The Know Your Customer (KYC) policy has become a crucial aspect of financial regulations in Poland, particularly since the implementation of the Anti-Money Laundering and Countering the Financing of Terrorism Act (Ustawa o przeciwdzialaniu praniu pieniedzy oraz finansowaniu terroryzmu) on March 1, 2018.

The Importance of KYC in Poland

Under the AML Act, financial information authorities in Poland are responsible for preventing the introduction of property values derived from illegal or undisclosed sources into financial trading. The minister authorized to conduct matters relating to financial institutions and the General Inspector of Financial Information play a crucial role in enforcing these regulations.

Conducting a Thorough KYC Process

Financial institutions operating in Poland must conduct a thorough KYC process before establishing a business relationship with a customer. This involves:

  • Identifying the customer’s identity, suitability, and risks involved with maintaining the relationship
  • Gathering information about the customer, including:
    • First and last name
    • Nationality
    • Universal Electronic System for Population Registration (PESEL) number or date of birth
    • Country of birth
    • Address of residence

Verifying the Identity of the Beneficial Owner

In addition to identifying the customer, financial institutions must also verify the identity of the beneficial owner, which is defined as a person who exercises control over the customer. This includes gathering information about the beneficial owner’s:

  • Name
  • Nationality
  • PESEL number or date of birth
  • Country of birth
  • Address of residence

Outsourcing KYC Processes

Financial institutions may rely on third-party providers to conduct some aspects of the KYC process, provided that the provider is also obligated by law to comply with AML regulations. However, this does not relieve the financial institution of its responsibility to apply financial security measures.

  • Financial institutions may outsource the execution of financial security measures and ongoing transaction analysis to a third party
  • The outsourced entity must be treated as part of the financial institution under a written agreement
  • Any mistakes made by the third party will burden the financial institution with administrative liability under the AML Act

Due Diligence when Outsourcing KYC Processes

The lack of a license or registration requirement for third-party providers underscores the importance of due diligence when outsourcing KYC processes. Financial institutions must ensure that they are working with reputable providers that can meet the same standards as outlined in the AML Act.

Conclusion

In conclusion, the Know Your Customer policy in Poland is a critical aspect of financial regulations designed to prevent illegal activities and maintain the integrity of the financial system. Financial institutions operating in Poland must be aware of their obligations under the AML Act and take necessary steps to comply with these regulations.