Recommendations for influencers regarding the marking of advertisements in Poland
The popular problems of the top brands of the influencing industry in the USA show, in a nutshell, the direction in which the legal status of counteracting unfair practices in the field of advertising labeling by influencers will certainly evolve in Poland as well. Current American press titles draw attention to – as it turns out – quite restrictive approach of regulators to the phenomenon of promoting the most modern financial and investment services by people known but not related to the “crypto, CFD and PRIIP market”, which is more and more frequent also in Poland and common in the USA based on high risk and modern virtual access to the capital and virtual market. This is because we are talking about promoting trading platforms, created with the possibilities of distributed protocol technology in the Fintech sector in mind. Thanks to the wide reach of well-known people, the influencers’ promotion of such services is aimed at reaching the mass circle of end users who, by definition, do not have specialist knowledge about the principles of risk and the potential threats of investing in not only the well-known so-called cryptocurrency, but also in financial derivatives with the help of CFDs, leverage and methods of leveraging investment potential as part of a massive number of distributed maps of individual investors.
The case of “Kim Kardashian” and the legality of influencer promotion of financial and virtual market instruments
The Polish General Inspector of Financial Information (GIFI) is the main element of the Polish system of counteracting money laundering and financing of terrorism. In the performance of its statutory tasks, the GIFI is assisted by the Polish Financial Information Department of the Ministry of Finance. The GIFI, together with the Department, is considered a financial intelligence unit as defined in the regulations of the European Union.
The Polish General Inspector of Financial Information accepts reports of actual or potential violations of the provisions on counteracting money laundering and terrorist financing from employees, former employees of obligated institutions or other persons who perform or performed activities for the obligated institutions on a basis other than an employment relationship.
From the beginning of 2023, products containing herbs or dried hemp intended for vaporization will be subject to excise duty in Poland. The same applies to glycerin or glycol solutions, which are apparently sold as fireplace inserts or air fresheners, although they are used in e-cigarettes.
The changes are envisaged in the already published draft amendment to the Excise Duty Act and certain other acts. The amendments assume, inter alia, entry into force of the obligation to keep electronic excise records and documentation a year later than planned, i.e. on January 1, 2024. Changes to the definition of e-cigarette fluid and innovative products were not announced in the list of legislative works.
Definition of cryptocurrency in Polish regulatory law (DIGITAL VALUE IMAGE)
According to the key legal definition of the Polish Anti-Money Laundering and Terrorist Financing Act of March 1, 2018, a virtual currency in Polish regulatory law is understood as a digital representation of a value that is not:
a) legal tender issued by the National Bank of Poland, foreign central banks or other public administration bodies,
b) an international unit of account established by an international organization and accepted by individual countries belonging to this organization or cooperating with it,
c) electronic money within the meaning of the Polish Act of August 19, 2011 on payment services,
d) a financial instrument within the meaning of the Act of July 29, 2005 on Trading in Financial Instruments,
e) a bill or a check.
The above legal definition of virtual money in Poland, in addition to the so-called negative list (that is, an indication on the list of those securities that are not electronic money) also includes the second condition. It is a digital representation of value that is exchangeable in business transactions for legal tender and accepted as a medium of exchange, as well as a digital representation of value that can be electronically stored or transferred or can be the subject of electronic commerce.
AML 6 Directive – the new European Supervisory Authority of the future (AMLA)
Leverage is a tool by which an investor increases the chance of gaining profits in the short term, using foreign capital. The potential profits are sizable especially when compared to the capital outlay required for such an operation. The investor obtains external financing by which he reduces his own costs. The financing entity may be a bank granting the loan. The interest on the loan will be treated as an expense, which is an opportunity to reduce the tax burden on the income from the operation. Here it should be noted that, like any market activity, the use of leverage involves some risk. Failure will involve repayment of financing and, in the case of a bank, also high interest rates. In short, leverage is investing with borrowed money. Profits versus losses can be calculated in a simple way. The amount that the investor lays out of his own funds is at the same time collateral for the entire investment. It can be 100 or 1000 PLN; the financing entity determines the level of leverage – in Poland it is a maximum of 100:1. Using such a conversion rate, an investor who actually has PLN 100 can invest PLN 10,000. If the investment goes well, the costs that the investor will incur will be the return of the borrowed amount plus interest. The change in the instrument that was purchased by the investor is done not in relation to his equity, but to the total amount based on leverage. A change of 1% in the wrong direction in the example above will result in the loss of the security amount and the discontinuation of the investment. Larger changes will result in additional losses for the investor. It is possible to protect against such a situation with a broker who finances investments. Negative balance protection guarantees that after a loss in the amount of the invested own amount, the position will close automatically and the investor will not be left with a debit.