At the end of February 2021, in the article entitled "The most important changes in the AML Act related to the implementation of Directive V AML", we informed about work on amending the Act on Counteracting Money Laundering and Terrorist Financing (hereinafter: the AML Act) in connection with the obligation to implement Directive (EU) 2018/843 of the European Parliament and of the Council (so-called Directive V AML).

The amendment was adopted on March 30, 2021. It comes into force on May 15, 2021.

The Act is essentially the same as the draft, which we discussed in detail in our last publication on this topic (we'll summarize the key changes introduced by the Act later in this text). The only modifications stem from the Senate's amendments and include five changes, only the first two of which are substantive. The remaining Senate amendments concerned technical changes.

Thus, in accordance with the Senate amendments, the following changes were introduced to the bill:

1. Real estate agents were included among the obligated institutions, while at the same time excluding from this institution intermediaries performing real estate intermediation activities aimed at concluding a lease agreement for real estate or part thereof, in which the monthly rent was set at an amount lower than the equivalent of EUR 10,000.
2. After Article 198e, Article 198f has been added, reading as follows:
   "Article 198f. Whoever conducts real estate brokerage business in violation of the condition referred to in Article 180a, shall be subject to a fine in the amount of two to five times the average monthly remuneration in the national economy in the year preceding the year in which the violation was found, announced by the President of the Central Statistical Office on the basis of Article 20 item 1 letter a of the Act of 17 December 1998 on pensions and disability pensions from the Social Insurance Fund. The provisions of Article 198c paragraphs 2-8 shall apply accordingly."
   The Senate thus reduced the maximum amount of the penalty proposed by the Sejm, while increasing its minimum value. In its original wording, the fine was to be "up to PLN 50,000", but after the Senate's amendment - from two to five times the average monthly salary, i.e. for 2021, these amounts range from PLN 10,334.94 to PLN 25,837.35.
3. Article 1, point 44 indicates the paragraph to which the proposed amendment to Article 72 of the Act on Counteracting Money Laundering and Terrorist Financing and certain other acts applies by;
4. in Article 1, point 57, in Article 129f, paragraph 1, point 2, in Article 129h, point 3 and in Article 129r, paragraph 1, point 2, the words “tax identification number (NIP)” are replaced by the word “NIP”;
5. in Article 1, point 57, in Article 129j and in Article 129v, the words "register of entrepreneurs of the National Court Register" are replaced by the words "register of entrepreneurs in the National Court Register"

Key changes resulting from the implementation of the AML V Directive

The introduced changes concern in particular:

1. Extension of the scope of the Act to include the conditions for conducting business activities by certain obligated institutions.

The amendment expands the catalogue of obligated institutions to include:

• entrepreneurs whose core business activity is the provision of services consisting in preparing declarations, keeping tax books, providing advice, opinions or explanations in the field of tax or customs law, and who are not other obligated institutions;
• real estate agents, excluding real estate agency activities aimed at concluding a lease or tenancy agreement for real estate or part thereof, in which the monthly rent was set at less than the equivalent of EUR 10,000;
• entrepreneurs conducting business involving trade or intermediation in trade in works of art, collectors' items and antiques, including when such activity is conducted, among others, in art galleries or auction houses, as well as entrepreneurs conducting business involving the storage of works of art and collectors' items – in the scope of transactions with a value equal to or exceeding the equivalent of EUR 10,000, regardless of whether the transaction is carried out as a single operation or several operations that appear to be related to each other.

2. Changing the definition of the beneficial owner.

An important change is the clarification of the definition of beneficial owner. According to the proposed definition, a beneficial owner will be "any natural person" who meets the conditions specified in the Act.

3. Changing the definition of politically exposed persons.

As part of the amendment, a decision was also made to change the definition of a politically exposed person by excluding from this catalogue persons holding middle and lower-level positions, including directors general in the offices of supreme and central state bodies, directors general of voivodeship offices, and heads of local offices of government special administration bodies.

4. Expanding the catalogue of entities obliged to register their beneficial owners in the Central Register of Beneficial Owners (hereinafter referred to as "CRBR") and to update them.

The group of entities required to obtain an entry in the register of beneficiaries, apart from commercial law companies, will include, among others, trusts, partnerships, European economic interest groupings, European companies, cooperatives, European cooperatives, foundations and associations subject to entry in the National Court Register.

5. Increasing the threshold for the maximum amount stored electronically from €50 to €150.

The amendment assumes raising the threshold for electronic money, up to which an institution will not be obliged to carry out the customer identification and verification process (of course, there are exceptions).

6. Prohibition of maintaining anonymous accounts, savings books and safe deposit boxes by credit and financial institutions.

7. Expanding the list of circumstances that justify the application of enhanced financial security measures due to an increased risk of money laundering or terrorist financing.

This modification provides for the extension of the list of situations indicating a higher AML risk, including circumstances such as:

• linking transactions with oil, weapons, precious metals, tobacco, cultural artifacts, ivory, protected species
• linking a transaction with a customer who is a third-country national and applies for residence or citizenship in a Member State, in exchange for, among other things, the purchase of real estate or government bonds.

8. Imposing on obligated institutions the obligation to record any discrepancies between the factual circumstances concerning the client, established by that institution, and the data available in the central register of beneficial owners.

9. Expanding the scope of statistics collected by the General Inspector of Financial Information (GIIF).

10. Clarification of the rules for storing documents and information obtained as a result of applying financial security measures by obligated institutions.

11. Obligation to register "entities providing currency exchange services between virtual and fiat currencies", "providers of virtual currency accounts", as well as "entities providing services to companies and trusts".

12. Expanding the catalogue of sanctions that may be imposed on obligated institutions for violating the obligations arising from the provisions of the AML Act.

13. Extension of the Act to include provisions protecting employees or associates of an obligated institution who anonymously report violations of anti-money laundering and terrorism financing regulations.

The changes introduced by the amendment under review should be of interest not only to entities that are "new obligated institutions," but also to those already covered by the AML Act. Even a cursory analysis of the changes suggests that obligated institutions face a number of new obligations and challenges in adapting their daily operations to the new legal requirements.

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