On 19 January 2021, the Polish Parliament (the Sejm) received a government draft amendment to the Act on Counteracting Money Laundering and Financing of Terrorism aimed at implementing changes in AML directives. What is about to change?
Changes to the Central Register of Ultimate Beneficial Owners (CRBR)
Extension of the catalogue of entities obliged to report information on ultimate beneficial owner (UBO):
- trusts whose trustees or their equivalents are Polish tax residents and trusts whose trustees or their equivalents enter into economic relations or acquire real estate in Poland,
- corporate and other legal entities, i.e. partnerships, companies, cooperatives, associations and foundations.
Extending the catalogue of obliged institutions
Extension of the catalogue of obliged entities, to include entrepreneurs:
- entities not being tax advisory firms but providing tax advice within their business activity,
- dealing in or storing works of art of acting as dealers in works of art, if the value of the transaction or a series of related transactions amounts to at least EUR 10k.
New CRBR data verification mechanisms... and new penalties
Legislator proposes to introduce a mechanism for verifying accuracy of information provided to the CRBR. Obliged institutions will be required to note discrepancies between information gathered in the CRBR and factual situation of customers, as determined by these institutions.
At the same time, obliged institutions will have to take appropriate actions to clarify discrepancies identified and, if discrepancies are confirmed, provide the registry authority with information on the discrepancies identified, along with justification. In addition, they will have to document the difficulties encountered in applying financial security measures involving identification of UBO's identity.
New regulations specify rules on application of financial security measures by obliged institutions, as well as activities undertaken by these institutions in connection with relations with high-risk third countries, by introducing, among others, obligation to obtain additional information on the customer, its actual beneficiary, or the reasons and circumstances of the intended or executed transactions.
In order to enforce new obligations, legislator expanded the catalog of administrative sanctions for non-compliance with certain duties by obligated institutions, to include, among others, establishing economic relations or conducting activities related to a high-risk third country.
Obligation to register virtual currency activities
Each entity interested in providing currency exchange services between virtual and fiduciary currencies is required to obtain entry into the register of virtual currency activities once all requirements specified in the draft bill are met. Such register will be maintained by the minister of public finance. Breach of the obligation to register will be punished with a fine of up to PLN 100k.
Change of UBO’s definition
According to proposed amendment, UBO shall be considered as any individual meeting criteria set forth in the Act. At the same time new regulations expand the definition of the beneficial owner with a group of persons in whose interest the trust was established or operates.
What is important, individual with rights or duties equivalent to those of a settlor, trustee, supervisor, and beneficiary of the trust or other person exercising control of the trust may be perceived as actual beneficiary of the trust.
We will keep you informed about further steps of works on the draft.
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