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Know Your Customer (KYC) Procedures in Poland: A Guide for Businesses

In recent years, Poland has strengthened its Anti-Money Laundering (AML) laws to combat financial crimes. As a result, businesses operating in Poland are required to implement Know Your Customer (KYC) procedures to verify the identity of their clients and assess the risk of money laundering and terrorist financing.

What is KYC?

KYC is a procedure that aims to obtain reliable and complete information about a customer, including their business profile, transactional history, and potential risks. The goal of KYC is to ensure that businesses operate in a secure environment, free from money laundering and terrorist financing activities.

Who Must Implement KYC Procedures?

All companies operating in Poland that fall under the AML Act are required to implement KYC procedures. These entities include:

  • Banks and credit institutions
  • National payment institutions and electronic money institutions
  • Investment firms
  • Insurance companies and insurance intermediaries
  • Accountancy firms

How to Implement KYC Procedures?

To implement KYC procedures, businesses must follow a risk-based approach. This involves identifying the customer and verifying their identity, assessing the purpose and nature of the business relationship, and ongoing monitoring of the client’s transactions.

Here are the steps that should be taken:

  1. Identify the Customer and Verify Their Identity: Obtain reliable and complete information about the customer.
  2. Determine the Beneficial Owner: Take reasonable steps to verify the identity and determine the ownership structure of the beneficial owner.
  3. Assess the Purpose and Nature of the Business Relationship: Understand the purpose and nature of the business relationship with the customer.
  4. Ongoing Monitoring of Transactions: Analyze the consistency of the client’s transactions with the institution’s knowledge of that client and the level of risk assumed.
  5. Investigate the Source of Assets: If justified by the circumstances, investigate the source of assets at the disposal of the client.

When to Trigger KYC Procedures?

KYC procedures should be triggered in the following situations:

  • Establishment of a business relationship
  • Carrying out an occasional transaction exceeding threshold amounts (15,000 euros or 1,000 euros for money transfer and virtual currency)
  • Betting on or receiving winnings of EUR 2 thousand or more
  • Suspicion of money laundering or terrorist financing
  • Doubts about the veracity or completeness of customer identification data obtained to date

Consequences of Not Implementing KYC Procedures

Failure to implement KYC procedures can result in severe sanctions, including a high fine imposed by the Financial Supervision Authority (FSA), revocation of a licence, permit or concession of a regulated activity, or even striking off the register.

Relaxed or Enhanced Application of KYC Measures?

Businesses may apply KYC measures in a standardised manner, relaxed manner or enhanced manner depending on the level of risk associated with the client. A lower risk of money laundering and terrorist financing is indicated by the fact that the counterparty is a resident of a Member State, a public finance sector entity or a state-owned enterprise.

AML/KYC Compliance

If your company is an obliged institution, it’s essential to properly design and apply KYC procedures to ensure compliance with AML regulations. Linke Kulicki Law Firm can help you navigate the complexities of AML compliance requirements and provide guidance on implementing effective KYC procedures.