31 October 2021 was the effective date of the last part of the regulations on counteracting money laundering and terrorism financing which adjust Polish regulations to the EU AML Directive. Which companies are subject to the new obligations and when do they have to comply with them?
The act amending the Act on Counteracting Money Laundering and Terrorism Financing was published on 30 April 2021. The amendments are aimed, in particular, at increasing transparency of information about ultimate beneficial owners and improving access of authorities appointed to combat money laundering to information kept by obliged institutions. Obliged institutions have additional obligations imposed on them in respect of applying security measures and identifying ultimate beneficial owners.
Some of the new regulations started to apply on 15 May 2021, other on 31 July 2021 and the last part of the amendments – discussed in the article below – came into effect on 31 October 2021.
AML Act – major changes from 31 October 2021:
The act introduces two new registers: “Register of activities for companies or trusts” and “Register of virtual currency activities”. Below you will find a short description of each of the registers.
The amendment imposes an obligation of meeting certain requirements and obtaining entry in the relevant register kept by the Head of the Fiscal Administration Chamber in Katowice, i.e. the “Register of activities for companies or trusts”, for entities carrying out regulated activities.
Entry in the new register is made for entrepreneurs carrying out the so-called “activities for companies or trusts”, consisting in:
The obligation to obtain entry in the register of activities for companies or trusts does not apply to attorneys-at-law, advocates and the so-called legal companies (spółka prawnicza) referred to in Article 8 of the Act on Attorneys-at-Law and Article 4a of the Law on Advocate’s Profession.
Entry is made electronically at a request, within 14 days of the date of filing of the request to the Head of the Fiscal Administration Chamber in Katowice. The request has to have enclosed to it a statement on fulfillment of the conditions legally required to carry out activities for companies or trusts or a clean criminal record statement.
Register of virtual currency activities is a new register for entrepreneurs carrying out the so-called “virtual currency activities” (kept by the Head of the Fiscal Administration Chamber in Katowice, as well) which consist in:
Additionally, the amendment to the AML Act imposes the following requirements on entrepreneurs carrying out activities for companies and trusts and entrepreneurs carrying out virtual currency activities:
The above requirements apply to natural persons carrying out regulated activities, as well as members of governing bodies, persons managing performance of actions related to carrying out regulated activities and ultimate beneficial owners of legal entities or organisational units carrying out regulated activities, as well as shareholders of such entities, if such shareholders have been entrusted with running the company’s affairs or are authorised to represent the company.
Carrying out regulated activities without entry in the relevant register is subject to a financial penalty of up to PLN 100 000.
Important: The deadline for making an entry in the register of activities for companies or trusts by an entrepreneur who carried out such activities before 31 October 2021 expires on 30 April 2022, i.e. 6 months after the effective date of the provisions of the act.
On the other hand, entities which plan to commence such activities from 31 October 2021 or later on should obtain entry in the relevant register before actual commencement of such activities.
The amendment to the AML Act introduces substantial changes in this respect. First of all, the list of entities obliged to report and update information in CRBO will be extended by:
Important: The deadline for reporting existing entities to the CRBO is 3 months of the effective date of this provision, i.e. until 31 January 2022.
As regards the scope of information reported to the CRBO:
Important: An update in the above respect should be made until 30 April 2022.
31 October 2021 was the effective date of the regulations obliging ultimate beneficial owners to provide the entity obliged to report information about beneficial owners or the trustee (or a person holding an equivalent position in trusts) with all information and documents necessary to report information to the CRBO.
Before the change all required data had to be determined by the person responsible for reporting information to the CRBO.
If the ultimate beneficial owner fails to perform their obligation to provide data required for registration, which will result in it being impossible to report information or update data by the statutory deadline, or provides data not complying with the facts, they will be subject to a financial penalty of up to PLN 50 000.
Important: The deadline for providing all information is 7 days of the date of entry of the entity in the National Court Register and introduction of changes or entry of the changes in the National Court Register (in the case of changes which require such entry in order to be effective).
The key change introduced as part of the amendment to the AML Act is implementation of a mechanism for verifying the correctness and genuineness of information included in the CRBO. When examining its client, each obliged institution (e.g. a bank, notary, real estate agent, accounting firm) will have an obligation to analyse the CRBO data. If as part of such an analysis any discrepancies are found between the information collected in the CRBO and information about the client’s ultimate beneficial owner established by the obliged entity, then the obliged entity will have to explain the reasons for such discrepancies. If the discrepancies are confirmed, the obliged institution will provide information about the discrepancies to the relevant authority with the use of an ICT system with justification and documentation concerning the discrepancies. Additionally, the so-called cooperating units (central administration, local government authorities and other state organizational units, as well as the Polish Financial Supervision Authority, Supreme Audit Office, National Bank of Poland) will also be able to inform the authority competent for the CRBO about the discrepancies they identified. This authority will take actions aimed at clarifying the discrepancies. Moreover, the authority will be able to commence an action in order to explain if the information collected in the CRBO is correct and up-to-date. A suitable note on the commencement and conclusion of the explanatory procedure will be shown in the CRBO. The authority may also issue a decision on rectification of data in the CRBO.
Though the amendment to the AML Act does not provide for any sanctions for the obliged institutions for failure to perform the verification and reporting obligation as to the discrepancies in the CRBO, it nonetheless extends the list of sanctions imposed on the entities subject to obligatory entry in the CRBO by a financial penalty of up to PLN 1 000 000 for provision of information not complying with the facts. This is a significant change, since previously these entities were responsible for timeliness of the reports only rather than for correctness of reported information – in this respect potential liability (criminal for a false statement and civil for any damage) is on the part of the reporting individuals.
The amendment to the act is aimed at tightening the AML system and making the procedure for establishing identity of ultimate beneficial owners more effective. If you need any support in relation to making changes in the CRBO due to the amendment to the AML Act, please contact us.
Director of the Company Law Department
TGC Corporate Lawyers
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