Day 1 March 2018 The Sejm passed with the amendments a government law on anti-money laundering and terrorist financing. It introduces as first in the system of Polish law, the definition of virtual currency and the obligation to determine the risk of money laundering by cryptocurrency stockholders.
Under the law, virtual currency is a ‘digital value mapping’ that ‘is tradeable to legal means of payment and accepted as a means of exchange, and can be electronically stored or transferred or can be traded electronically’.
Input definition of a virtual currency that covers both cryptocurrency and and centralised virtual currencies, is largely based on the definition used by the Financial Action Task Force (FATF) – an intergovernmental entity formed in 1989, which sets and promotes appropriate standards in the fight against money laundering, and on the definition used in the draft amendment Directive 2015/849. Thanks to the new rules, the trade in bitcoins and other virtual currencies is to be more secure.
one with more distinctive amendments adopted by the Sejm, refers to the conditions which the candidate for the General Financial Information Inspector is required to fulfil. According to it, the General Inspector may be a person who ‘has not served professionally or worked in the security authorities of the State listed under Article 2 Act (...) on disclosure of documents of state security authorities from years 1944–1990 and the content of those documents (...), nor was they co-operating.”
Designation of obliged institutions
The new anti-money laundering and terrorist financing Act defines government administrations as competent in anti-money laundering and terrorist financing. They will be the Minister of Finance and the General Inspector of Financial Information (GIIF), in the rank of Deputy Minister at the Ministry of Finance.
Following the provisions of the GIIF Act, it is to be given additional powers to draw up a national assessment of the risk of money laundering and terrorist financing, as well as to decide on the list of persons and entities to which specific restrictive methods apply.
The provisions of the Act redefine the so-called institutions required to comply with the Act. They will be required to assess the risk of money laundering and terrorist financing and to apply financial security measures. The Act also gives the status of institutions obliged to various categories of entities, such as banks, loan institutions, as well as tax advisors or notaries.
The new law also grants the status of an organisation which is obliged to ‘entities engaged in economic activity, consisting in the provision of services to:
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- exchange between virtual currencies (in particular cryptocurrency) and legal means of payment and between individual virtual currencies;
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- the exchange of virtual currencies;
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- keeping accounts for customers of the so-called "hot wallets"/"online wallets".
GIIF powers under the new law
In view of the above, virtual currency exchanges (kiptowalut) and entities that manage the portfolios of these currencies will be required to apply financial security measures to customers, as other obliged institutions do.
This is intended to improve the monitoring of transactions to detect suspicious operations that may be linked to money laundering and terrorist financing.
The implementation of these provisions will be subject to review by the GIIF, obliged to notify the GIIF of circumstances that indicate suspected money laundering or terrorist financing.
The new law implements the principle of an approach based on the risk assessment of money laundering and terrorist financing by the obliged institutions.
The project describes several levels of risk assessment: at the level of the Commission of the European Union (all EU countries), at national level, the data of the obliged institutions and at the level of the individual client.
In order to prepare or update the national risk assessment, the GIIF will be able to require institutions to submit risk assessments and other information that may influence the above-mentioned assessment.
The scope, composition and functioning of the Financial Security Committee (KBF) has also been increased to support GIIF in its activities and to be its opinion and advisory body. The CBF is expected to become a platform for exchanging anti-money laundering and terrorist financing experiences and information in the future and will replace the existing Interministerial Financial Security Committee.
Under the Act, the so-called Central Register of Real Beneficiaries (CRBR) will also be created, which will be open to the protection of economic participants by providing them with access to information about potential counterparties. However, its main objective will be to combat money laundering and terrorist financing.
The CRBR will take the form of an IT system to process information about the beneficial owners of selected corporate entities. The CRBR is to be held by the Minister responsible for Finance.
The new law also introduces methods of blocking accounts or stopping transactions in case of suspected money laundering or terrorist financing. In addition, it assumes that the payment institution will be obliged to inform about transactions, in accordance with the procedures enshrined in the EU Directive and the draft law (from 1,000 EUR and more).
Regulations also lay down, more specifically than before, the basis for the cooperation of GIIF with foreign financial analysts and Europol and the rules relating to the control of the obliged institutions. They also provide for fines that may be imposed on obliged institutions that fail to comply with the new law.
Key amendments adopted by the Sejm
one with more distinctive amendments adopted by the Sejm, refers to the conditions which the candidate for the General Financial Information Inspector is required to fulfil. According to it, the General Inspector may be a person who ‘has not served professionally or worked in the security authorities of the State listed under Article 2 Act (...) on disclosure of documents of state security authorities from years 1944–1990 and the content of these documents (...), nor was they co-operating’
On the other hand, the amendment tabled by the opposition, which would extend the period of vacatio legis for the new legislation from three to six months. Such a postulate was reported, among others, by representatives of banking organizations and local governments.
The bill was prepared in connection with the obligation of EU countries to implement the provisions Directive 2015/849 dated 20 May 2015 on the prevention of the use of the financial system for money laundering or terrorist financing, amending Regulation (EU) 648/2012 and repealing Directive 2005/60 and the Commission Directive Directive 2006/70.The new law is intended to replace a similar law coming from 2000.
Day 2 March 2018 The bill was passed to the President and Marshal of the Senate.
Author:
Ilona Żukiel
With Chancellery Russell Bedford tied since April 2016, where it handles economic operators in international tax planning. Previously, she gained her professional experience in Warsaw law firms, where she participated in projects in the fields of economic, commercial and civil law.
She graduated from the Faculty of Law and Administration of the University of Warsaw and from the Postgraduate Tax and Tax Study at the University of Warsaw.