Increased Liability for Breaching AML Obligations
Written By
Of Counsel
Poland
As an Of Counsel in the Finance & Financial Regulation team in Warsaw, I specialise in banking and insurance matters, including compliance and corporate governance, as well as restructuring.
On 30 November 2019, another amendment to the Act of 1 March 2018 on Anti-Money Laundering and Combating Terrorist Financing (the "AML Act") entered into force. The amendment is primarily aimed at a more complete adjustment of Polish law to the IV AML Directive.
From the entrepreneurs' perspective, the most significant change is the expansion of the group of persons liable for violations of statutory obligations by the obliged institution (administrative torts referred to in Articles 147, 148 and 151 (1) of the AML Act).
After the amendment, an administrative fine of up to PLN 1,000,000 (one million Polish zlotys) can be imposed not only on the member of the Management Board of the obliged institution responsible for performing duties in the field of AML, but also on senior management or an employee holding a managerial position responsible for compliance of the obliged institution's activities and its employees with AML regulations (MLRO - Money Laundering Reporting Officer).
The legislator introduced the possibility of imposing a very high financial penalty on an individual, without indicating any directives regarding the amount of the penalty. The General Inspector of Financial Information will therefore have unrestricted freedom to impose fines on natural persons.
The changes to the Act mostly apply to real estate agents and entrepreneurs creating or managing so-called special purpose vehicles (SPVs), i.e. entrepreneurs referred to in Article 2 clause 1 items 16 and 18 of the AML Act.
The amendment extends the group of natural persons who must comply with the requirement of no criminal record for intentional offence or intentional tax offense. After the amendment enters into force, such requirement will have to be met by natural persons:
a. being Beneficial Owners or partners, including shareholders, in entities dealing in real estate brokerage and creating or managing SPVs;
b. operating in the scope indicated in point a) above;
c. holding managerial positions in obliged institutions referred to in point a) above.
In addition, the legislator has introduced an additional requirement to possess relevant knowledge or experience towards persons who are Beneficial Owners or hold managerial positions in an entity creating or managing SPVs (Article 129 (1a) of the AML Act). This requirement will be deemed met if the training or course covers legal or practical issues related to the provision of real estate services, the creation and management of SPV companies or the performance of activities related to the provision of services for at least one year.
The above requirements must be met no later than within three months from the date of entry into force of this Act (i.e., before 30 February 2020).
Persons who fail to comply with the obligation to submit a criminal record or confirming compliance with the condition of having appropriate knowledge or experience face possible fines of up to PLN 10,000 (ten thousand Polish zlotys).
Should you have any further questions regarding adapting your organisation's activities to the obligations introduced by the amendment described above, or registering your company to the Central Register of Beneficial Owners, or related to the AML Act, please contact us.
