Revolution in CRBR regulations. There will be high fines for mistakes

The Ministry of Finance is preparing an amendment to the provisions of the Act on Counteracting Money Laundering and Financing of Terrorism, thanks to which the Ministry will be able to punish entrepreneurs for, inter alia, reporting false data to the Central Register of Beneficial Owners (CRBR).

The CRBR is active, so far fines for failure to report

The Central Register of Beneficial Owners imposes a number of obligations on companies. The obligation to report the beneficiaries for companies registered in the National Court Register (KRS) before 13 October 2019 expired on July 17, 2020, and for other entities this deadline is 7 days from the date of their entry in the KRS. Moreover, companies must notify the CRBR of any change of KRS data.

The existing regulations provide for the possibility to impose a fine of up to PLN 1 million, but only on the entities which have not fulfilled the obligation to report the beneficiaries within the deadline indicated in the Act. However, this is to be changed soon. The Ministry of Finance has prepared an amendment to the provisions of the Polish AML Act, now under review of the Committee for European Affairs.

Read also: Central Register of Beneficial Owners – practical issues

Amendment to the provisions, i.e. new CRBR

Significant changes to the provisions regulating the operation of the CRBR are coming up, including the extension of the group of entities to be registered and the imposition of new obligations on beneficiaries. The prepared amendment will also make it possible to punish companies, not only for failure to report to the register.

One of the key changes to the provisions is the extension of art. 153 of the Act on Counteracting Money Laundering with the possibility to punish companies which have not fulfilled the obligation to update the information listed in art. 59 within the deadline indicated in the Act or have provided information inconsistent with the facts. The fine, as in the case of failure to report the beneficiaries, may reach even PLN 1 000 000.

Moreover, the amendment will impose a completely new obligation on companies (new point 10 and 11 to Article 50(2)). It will concern companies’ internal anti-money laundering procedure, which will define the rules:

• for recording discrepancies between the information collected in the CRBR and the information on the client’s real beneficiaries established for the application of the Act,
• for documenting the difficulties identified when verifying the identity of the real beneficiaries and the actions taken to identify the person holding a senior management position as the real beneficiary.

For the obliged entities, this means nothing else than the future necessity to verify the compliance of the information on real beneficiaries provided by the client with the data from the register, and in case of discrepancies, the obligation to report them to the minister in charge of public finance together with the verified information, justification and appropriate documentation.

The proposed amended regulations also provide for the extension of the group of entities obliged to obtain an entry in the register of the beneficiaries by:

• trusts whose trustees or persons holding equivalent positions:
• have their residence or registered office within the territory of the Republic of Poland or
• establish business relations or purchase real estate located in the territory of the Republic of Poland, in the name or on behalf of a trust,
• partnerships,
• European economic interest groups,
• European companies,
• cooperatives,
• European cooperatives,
• associations subject to registration in the National Court Register,

To conclude, the planned changes will significantly affect the activity of entrepreneurs. They will impose new requirements and obligations on some of the obliged institutions, on which the possibility of conducting their business operations will depend. Overall, the proposed amendment will ensure proper implementation of the EU Directive by clarifying the provisions of the national Anti-Money Laundering and Terrorist Financing Act.

The amended Act is to enter into force 14 days after the date of its publication in the Journal of Laws, and the provisions concerning, inter alia, mechanisms for the verification of the data gathered in the CRBR are to enter into force 6 months after the date of publication of the proposed Act, so as to provide entrepreneurs with sufficient time to familiarise themselves with the new regulations and prepare for the changes.

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