AML/CFT: Notification Obligation for Suspicious Transactions

The Polish Financial Supervision Authority (General Inspector) has issued a warning regarding the obligation to notify suspicious transactions related to money laundering and terrorist financing.

Notification Obligation

As per Article 86(1)-(2) of the Act on Combating Money Laundering and Financing of Terrorism (AML/CFT), obligated institutions must notify the General Inspector in case they suspect that a specific transaction or assets are linked to money laundering or terrorism financing. The notification should include justification for the suspicion, detailing the information collected before and during the business relationship, including:

• Customer Information:
  • Customer’s profile
  • Frequency of transactions
  • Origin of assets
• Information Collected During Business Relationship:
  • Consistency with determined economic activity
  • Changes in ownership
  • Circumstances affecting attributed risk to the customer
• Due Diligence Measures and Results:
  • Applied customer due diligence measures
  • Analysis of transactions with selected contractors
  • Specific cases for further review
• Activities Undertaken After Determining Suspicious Circumstances:
  • Telephone contacts
  • Document requests
  • Results

Importance of Notification

The General Inspector emphasizes that notification is not a circumstance allowing for attributing lower risk or exempting the obligated institution from intensified monitoring or obligation to terminate business relationships.

Recurring Suspicious Circumstances

Recurring suspicious circumstances should be included in internal documentation and used when applying customer due diligence measures. For example, an obligated institution may need to update its risk assessment and procedure regarding the risk of money laundering and financing of terrorism for companies operating with foreign contractors in virtual offices.

Consequences of Non-Compliance

The General Inspector reminds that failure to fulfill obligations under AML/CFT, including preparing a risk assessment, applying customer due diligence measures, documenting applied measures, demonstrating application on request, forwarding information, submitting notifications, may result in administrative penalties.

Conclusion

In conclusion, obligated institutions must remain vigilant and promptly notify the General Inspector of any suspicious transactions or assets linked to money laundering or terrorism financing. The notification should include detailed justification for the suspicion, and recurrent suspicious circumstances should be documented and used when applying customer due diligence measures.