Poland Tightens the Screws on Banking Regulations to Combat Financial Crime
In a bid to strengthen its defenses against money laundering and terrorist financing, Poland has implemented new banking regulations aimed at combating financial crime. The country’s Anti-Money Laundering (AML) Act, which came into effect in 2018, imposes a series of obligations on obligated institutions, including banks, credit and financial institutions, investment firms, and other entities.
Who is Subject to the Obligations?
The AML Act applies to a wide range of entities, including:
- Entrepreneurs providing services related to registered offices, business addresses, or mailing addresses
- Accounting bookkeeping services
Even if an entity is not traditionally associated with anti-money laundering and counter-terrorist financing obligations, they may still be subject to the requirements.
Internal AML Documentation: Risk Assessment and Internal Procedure
The most crucial internal document in the field of anti-money laundering and counter-terrorist financing is the risk assessment related to money laundering and terrorist financing. This document determines all further actions taken by the obligated institution in this area. The risk assessment must include factors related to:
- Customers
- Countries or geographic areas
- Products and services offered
- Transactions carried out
Customer Verification and Identification
Obligated institutions must exercise due diligence when establishing and maintaining business relationships with their customers. This includes:
- Identifying and verifying customer identities
- Determining beneficial ownership
- Assessing business relationships
Reporting Violations to Competent Authorities
In specific situations, obligated institutions are required to report to the relevant state authorities about potential threats concerning money laundering and terrorist financing. This includes cases where a discrepancy is found between the information provided by the customer in the Central Register of Beneficial Owners and the information identified about the beneficial owner.
Penalties for Non-Compliance
Failure to comply with AML obligations can result in:
- Administrative penalties, including publication of information on the public government website, an order to cease specific actions, revocation of a concession or permit, and fines.
- Criminal sanctions for violations of the Act’s provisions.
Conclusion
The Polish banking regulations aimed at combating financial crime are complex and demanding. Obligated institutions must take proactive steps to ensure compliance with these requirements, including conducting risk assessments, verifying customer identities, and reporting potential threats to competent authorities. Failure to do so can result in severe penalties.