The Act of March 1, 2018 on counteracting money laundering and financing of terrorism (entering into force on 13 July 2018) is to increase the efficiency of action in this area yet triggers important changes for entrepreneurs operating in Poland.
The new act defines a larger number of entities than before that will be obliged to comply with its provisions. They will be, among others: banks, investment companies, insurance companies, foreign legal entities, which perform their brokerage activities on the territory of the Republic of Poland and Polish and foreign lawyers, tax advisors, entrepreneurs who make/accept payments with a minimum amount of 10,000 euro.
On the other hand, some entities have been exempted from fulfilling their obligations regarding money laundering. Such entities include, for example: antique shops, auction houses, and commissioned merchants. However, they will have to comply with the provisions of the Act only if they settle cash transaction in excess of 10,000 Euro.
The responsibilities of the entities in the area of anti-money laundering procedures will be increased. Entrepreneurs will have to assess the risk of money laundering and apply financial security measures, among others in case of establishing economic relations and transactions from 15,000 euro, in one or several operations. In special cases the act imposes an obligation to inform about such operations from the value of 1,000 euro. Entrepreneurs also have to strengthen financial security measures towards customers coming from a high-risk third country or established in it.
There will be an increased amount of penalties under the new law for its non-compliance. The upper limit of the penalty is to be EUR 5 million or up to 10% of the annual turnover. Penalties are also foreseen for board members who are responsible for implementing the amended provisions into the operation of the business entity they represent.
The changes will also affect the Know Your Customer (KYC) procedure. The new risk management process (risk-based approach) will take into account the most important factors from the perspective of a specific customer. Additionally, in the above-mentioned institutions, there will be introduced whistleblowing procedures. The latter will consist in providing employees with anonymous reports of suspected violations of the provisions of the new act.
From October 13, 2019, the Central Registry of Real Beneficiaries will operate openly and will be publicly available. Enterprises will be obliged to provide information about their beneficiaries within 7 days from the date of the entry into the National Court Register.
Additional obligations to counter money laundering will be imposed on capital groups. They will be required to develop and implement internal procedures aimed at anti-money laundering activities.
Transparency and greater access to information about entrepreneurs and their activities will serve to protect market participants.
Interestingly, the changes will also affect the concept of a Politically Exposed Person (PEP). This status will be granted to every person, regardless of whether he or she will have a place of residence outside Poland. This means that people who have their place of residence in Poland will also be able to receive this status. The only condition will be the fulfilment of the statutory prerequisites.
The new law will also introduce legal definitions of the terms “virtual currency” and “trust”.