Amendments to the Anti Money Laundering Act | In Principle

On 25 February 2021, the Polish Parliament adopted amendments to the Anti Money Laundering and Counter Terrorism Financing Act of 1 March 2018. They concern both obligated institutions and reporting of information on beneficial owners to the Central Register of Beneficial Owners. Below we present some of the changes that will have a significant impact on the performance of duties by obligated institutions and entities required to make notifications to the register.

Changes concerning obligated institutions

The following were added to the group of obligated institutions:

• Companies providing services in the field of bookkeeping and preparation of tax declarations
• Companies dealing in and storing works of art, collectors’ items and antiques

for transactions with a value of EUR 10,000 or more.

The amending act clarifies that obligated institutions should apply financial security measures in relation to clients with whom they maintain business relations, in particular when:

• There has been a change in the previously established nature or circumstances of the economic relationship
• There has been a change in the previously established data regarding the client or beneficial owner
• The institution was obliged by law during the calendar year in question to contact the client in order to verify the information concerning beneficial owners, in particular when such an obligation resulted from the Act on Exchange of Tax Information with Other Countries of 9 March 2017.

The limit for non-cash payment transactions which allows for waiver of application of financial security measures has been raised from EUR 50 to EUR 150.

The catalogue of circumstances triggering enhanced financial security measures has been extended to situations where there is a link between economic relations or an occasional transaction and:

• Petroleum, weapons, precious metals, tobacco products, cultural artefacts, ivory, protected species or other objects of archaeological, historical, cultural and religious interest or of special scientific value
• A client who is a third-country national and who is seeking residence or citizenship in a member state in return for capital transfers, the acquisition of property or government bonds or investment in corporate entities in kind in the member state.

In the case of business relationships or transactions involving a high-risk third country, the obligated institutions identified by the European Commission will need to obtain additional information about the client and the transaction and obtain approval from senior management to establish or continue a business relationship.

Obligated institutions will also need to verify if data in the Central Register of Beneficial Owners (CRBR) are accurate, and record discrepancies between the information collected in the register and the client’s self-identified beneficial owner information, as well as take steps to explain the reasons for these discrepancies. If any discrepancies are identified, it will be necessary to provide CRBR with verified information, including a justification and appropriate documentation.

New obligation to register activities for companies and trusts and in the field of virtual currencies

Activities involving:

• Provision of services consisting in creating a legal entity
• Performing the function of a board member (or similar)
• Providing a registered office or address for such entity
• Acting as a trustee, or
• Acting as a person exercising rights under stock or shares for the benefit of another entity (except for listed companies)

will be a regulated activity entered in the register kept by the minister for public finance. This obligation does not apply to attorneys-at-law and adwokaci.

The amendment also includes new provisions on virtual currency activity. It will be possible to perform such activity after obtaining an entry in the register of virtual currency activity. This register will be kept by the minister for public finance. Failure to comply with the obligation to obtain an entry will be subject to a fine of up to PLN 100,000. Entities conducting this activity will need to meet additional requirements, including having knowledge or experience related to the virtual currency business (complete training or a course covering legal and practical issues related to virtual currency activity) or, for at least one year, perform activities in the field of the virtual currency business, which must be evidenced by appropriate documents.

The provisions on registration of the above activities will come into force 6 months after entry into force of the amending act.

Changes in notifications to the Central Register of Beneficial Owners

1. Changes regarding notification of information

A duty to report beneficial owner information has been imposed on:

• Trusts whose trustees or persons in equivalent positions (i) reside or have their registered office in the territory of Poland or (ii) enter into business relations or acquire real estate in the territory of Poland for and on behalf of the trust
• Partnerships
• European economic interest groupings
• European companies
• Cooperatives and European cooperatives
• Associations subject to entry in the National Court Register, and
• Foundations.

The definition of a beneficial owner has been extended to include “every” person who meets the statutory requirements. This clarification is intended to eliminate doubts as to whether it is sufficient to identify a single beneficial owner in order to comply with the statutory obligation to report information to the register.

An obligation to provide information on any nationality held by a beneficial owner has been introduced. Companies that have already filed notifications will have 6 months after the amended law enters into force to add the missing information about citizenship.

An obligation has been introduced to keep a register of activities by documenting all impediments resulting in the inability to establish the identify the beneficial owner, or doubts as to the identity of the beneficial owner, and all difficulties related to reasonable actions taken to verify the identity of the beneficial owner.

When identifying the beneficial owner, obligated entities will not be able to rely solely on the information contained in the Central Register of Beneficial Owners or similar registers of other member states. They will have to carry out verification in accordance with the act and based on a risk assessment.

The powers to impose penalties for failure to comply with the obligation to notify or update information on beneficial owners have been extended to cover obligated entities and trustees or persons in equivalent positions having their place of residence or registered office in Poland or establishing business relations or acquiring real estate in Poland for the benefit of the trust.

An obligation has been introduced to record discrepancies between information collected by an obligated institution and the information available in the register. Obligated institutions will have to explain all discrepancies, and if confirmed, report them to the minister for public finance. The minister will be able to initiate verification proceedings and issue a decision to correct the information.

2. Changes relating to trusts

The definition of the beneficial owner of a trust has been amended as follows:

• Adding the condition of having the status of a person in whose main interest a trust was established or operates, if it is not possible to identify the natural persons benefiting from it. As an example, there are trusts the benefits of which are paid to the adult children of the founder of the trust—then, until they reach the age of majority, and taking into account the possibility of birth of other children or death of some of them, the group of persons in whose interest the trust was created should be designated as the beneficial owners.
• Allowing the recognition as beneficial owners of trusts persons meeting the condition of owning more than 25% of the shares, exercising control over the trust through possession of powers specified in the Accounting Act, or holding higher management positions, in case of documented impossibility to identify persons meeting other prerequisites. This change is intended to eliminate the inability to designate beneficial owners when there is no trustee in the trust.

A 7-day deadline for submitting information has been indicated, counted from the date of:

• Creation of a trust
• Transfer of the registered office or place of residence of the trustee or a person holding an equivalent position to the territory of Poland
• Establishment of business relations or acquisition of real estate in the territory of Poland, for or on behalf of a trust by a trustee or a person holding an equivalent position.

The information should be updated within 7 days after the information changes.

3. Further changes

Beneficial owners are obliged to provide the information necessary to make a notification or update it in the registry. Failure to fulfil this obligation may result in a fine of PLN 50,000, also if, as a result, the obligated entity reports information inconsistent with the facts.

A fine of PLN 1 million will also be imposed for providing data inconsistent with the facts.

The information will be kept in the register for 10 years after deletion of the information on the obligated entity from the National Court Register, or after the obligation to notify or update the data ceased to apply in the case of trusts.

Danuta Pajewska, attorney-at-law, Daria Goliszewska, M&A and Corporate practice, Wardyński & Partners