Due to the need to implement Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2018 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (in short Directive V AML), on 19 January 2021 the Government draft act amending the Act on counteracting money laundering and terrorism financing and certain other acts was submitted to the Sejm (File No. 909).
The submitted project provides for many key changes and new obligations for entrepreneurs.
1. Supplementing the catalogue of obligated institutions.
The proposed change 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;
- 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.
A significant change is the clarification of the definition of beneficial owner. According to the proposed definition, a beneficial owner will be considered to be "any natural person" who meets the conditions specified in the Act.
As stated in the justification for the bill, a decision was also made to amend the definition of beneficial owner by removing phrases linking the beneficial owner to the concept of "customer," due to the possibility of adopting an interpretation that a given entity does not have a beneficial owner until it uses the services of an obligated institution. According to the authors of the bill, changing the definition of beneficial owner will better align Polish law with the 5th AML Directive, which does not use the term "customer."
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 draft amending act stipulates that the group of entities required to obtain an entry in the register of beneficiaries, in addition to 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.
It is worth emphasizing, as stated in the justification for the project, that in addition to the above-mentioned obligation, the obligated institution will also have to take appropriate actions to clarify the identified discrepancies, and if the discrepancies are confirmed, it will be obliged to provide the competent authority with information on the identified discrepancies together with the justification.
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 obligations arising from the provisions of the AML Act.
Finally, it's worth noting that the deadline for implementing Directive V AML/CFT Directive expired on January 10, 2020, which provides reasonable grounds to assume that the legislative process will be relatively short. For businesses, this means there will be little time to implement the new obligations. Therefore, they should begin work on implementing internal documentation today to adapt to such extensive changes.
