Financial Crime World

Order Halts Action Against Obligated Institution for Public Finance Issues

The Office of the Minister Responsible for Public Finance has issued an order halting certain actions taken by an obligated institution in relation to a violation of the Act. The institution had been ordered to:

  • Withdraw a concession or permit
  • Remove itself from the register of regulated activities
  • Impose fines on individuals responsible

Definition of Politically Exposed Person (PEP) in Poland

According to the Polish Anti-Money Laundering Law (AML Law), Politically Exposed Persons (PEPs) are defined as natural persons who hold significant public functions or occupy significant public positions. The circle of PEPs does not include individuals holding middle and lower level positions.

AML Procedures for PEP

Obligated institutions must apply measures to determine whether a customer or beneficial owner is a PEP, including:

  • Collecting statements from clients
  • Verifying information through commercial databases
  • Examination of publicly available records
  • Obtaining senior management approval to enter into or continue a business relationship with a PEP

Verification of PEP Family Members and Close Associates

Obligated institutions must also apply the same obligations to family members of PEPs and individuals known to be close associates, including:

  • Spouses
  • Children
  • Parents
  • Beneficial owners of legal persons, unincorporated organizational units or trusts jointly with a PEP
  • Individuals with other close business relations

UBO Verification in Poland

As of 2021, obligated institutions are required to identify and verify the beneficial owners of their clients. This includes:

  • Putting in place procedures for noting discrepancies between information collected in the Central Register of Beneficial Owners and established information about a customer’s beneficial owner
  • Planning a system for taking action to resolve such discrepancies

Process for Full Verification of the Beneficial Owner

Obligated institutions must take steps to properly verify the beneficial owner of their customers, including:

  • Identifying the beneficial owner
  • Establishing the structure of ownership and control
  • Identifying and recording discrepancies between information collected in the CRBR and established information about the customer’s beneficial owner
  • Taking actions to clarify the reasons for discrepancies
  • Confirming such discrepancies

The Office’s order halts the obligated institution’s actions pending a full investigation into the matter. The institution will be required to comply with the AML Law and its implementing regulations, including verifying the beneficial ownership of its customers and applying measures to determine whether PEPs are involved in business relationships.