The implementation of AML directives into Polish law has imposed new obligations on economic operators related to money laundering and terrorist financing. Under the AML Act, obligated institutions (including banks and other business entities) are required to develop and implement internal procedures to effectively mitigate the risks associated with money laundering and terrorist financing.
As part of the implemented procedures, obligated institutions are obligated to apply customer due diligence measures, known as financial security measures. These measures are required to prevent the risk of money laundering and terrorist financing. They constitute mandatory actions by institutions, which should result in preventing the use of financial transactions to commit crimes.
Financial security measures include:
- customer identification and verification of his identity;
- identifying the beneficial owner and taking reasonable steps to:
a) verification of his identity,
b) determining the ownership and control structure – in the case of a client who is a legal person, an organizational unit without legal personality or a trust;
- assessing business relationships and, where appropriate, obtaining information about their purpose and intended nature;
- ongoing monitoring of the client's economic relations, including:
a) analysis of transactions carried out within the framework of business relations in order to ensure that these transactions are consistent with the obligated institution’s knowledge of the client, the type and scope of the client’s business activity and the risk of money laundering and terrorist financing associated with that client,
b) examination of the source of the property values at the client’s disposal – in cases justified by the circumstances,
c) ensuring that the documents, data or information held regarding business relationships are kept up to date.
The scope of financial due diligence measures applied in a given case depends on the level of identified money laundering or terrorist financing risk associated with specific business relationships or occasional transactions. The use of a risk-based approach, in accordance with the risk-based approach, aims to effectively and proportionately reduce the risk of the offered services and products being used for money laundering and terrorist financing purposes.
Conducting an appropriate analysis allows the obligated institution to determine the scope of security measures that should be implemented for a specific client. Obligated institutions have the right to apply simplified or enhanced financial security measures, depending on the determined risk level.
Obliged institutions are obliged to document the financial security measures applied and the results of the ongoing risk analysis, as well as to demonstrate, upon request of the relevant authorities, the application of these measures.
In practice, money laundering and terrorism financing risk assessments are based on information collected and analyzed under the "Know Your Customer" (KYC) program. Conducting a risk assessment by businesses and implementing appropriate financial security measures under the KYC program is crucial in their relationships with the banks with which they have entered into bank account agreements.
Banks are entitled to conclude a bank account agreement provided that, before executing the transaction, they apply financial security measures related to the identification and verification of the identity of the client and the beneficial owner.
If the bank determines that a transaction conducted through a bank account constitutes a potential risk related to the use of the financial institution's activities to commit money laundering or terrorism financing, the bank is obliged to take the following actions:
- determining circumstances that may indicate a suspicion of money laundering or terrorist financing;
- applying enhanced financial security measures, which may include suspending transactions and blocking a bank account, as well as intensifying ongoing monitoring of the client’s economic relations by taking at least one of the following actions: conducting an examination of the sources of origin of asset values (e.g. asking the client to submit explanations or documents regarding the source of funds) and determining the purpose and circumstances of payments to selected recipients (e.g. asking the client to provide documents related to the transactions being carried out).
Depending on the results of the actions taken, if the situation is effectively and clearly clarified, the bank may continue its relationship with the client and complete the transaction without notifying the General Inspector of Financial Information. If the client fails to provide the requested information and documents (e.g., avoids contacting the institution, refuses to disclose the source of assets, or fails to submit required transaction-related documents), or if the information provided proves insufficient or unreliable, the bank should immediately notify the General Inspector of Financial Information.
To summarize the above, blocking a bank account under AML regulations is one of the enhanced financial security measures implemented by banks when they detect the use or attempted use of a financial institution's operations for purposes related to money laundering or terrorist financing. Although blocking a bank account may be burdensome for customers, especially those conducting business, the bank is obligated to take such action based on its internal procedures aimed at counteracting money laundering and terrorism financing. To minimize the risk of blocking a bank account containing funds or to ensure the account is unblocked as quickly as possible, the following steps should be taken:
- avoid suspicious transactions, especially high-value ones;
- document the source of income and be ready to provide appropriate explanations to the bank;
- regularly update bank data, including information on the company’s beneficial owners;
- monitor financial transactions and do not ignore the bank's requests for additional information in this regard.
Taking action by business owners to verify their contractors under the Know Your Customer program in light of the provisions of the AML Act is extremely important in relations with banks, because failure to clarify the circumstances of a suspicious transaction may lead to serious consequences, including reporting the incident to the Inspector General for Financial Information, who then requests the bank to further block the bank account and immediately notifies the relevant prosecutor of the suspicion of committing a money laundering or terrorism financing offense.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of March 11, 2025
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