Poland – Know Your Customer (KYC) Rules

 

 

Poland lies directly along one of the main routes used by narcotics traffickers and organized crime groups between the former Soviet Union republics and Western Europe. According to Polish government estimates, narcotics trafficking, organized crime activity, auto theft (declining), smuggling, extortion, counterfeiting, burglary, and other crimes generate criminal proceeds in the range of less than $2 billion each year.

According to the Government of Poland (GOP), evasion of customs duties and taxes is the largest source of illegal income. Fuel smuggling, by which local companies and organized crime groups seek to avoid excise taxes by forging gasoline delivery documents, is a major source of laundered proceeds. Money laundering through trade in scrap metal and recyclable material is a growing trend, as is the increasing activity of organized crime in the financial services area (internet banking, credit cards and electronic systems for money transfers). It is also believed that some money laundered in Poland originates in Russia or other countries of the former Soviet Union. There are a declining number of cases involving entities located in tax haven countries. This is the result of agreements being signed on avoidance of double taxation (e.g., such an agreement with Cyprus will take effect in 2012).

The GOP estimates the gray economy, used primarily for tax evasion, may exceed 15% of Poland‘s 2010 gross domestic product (GDP). The GOP estimates the black economy comprises only 1% of GDP. Poland is not considered a regional financial center, nor is it considered a particularly important international destination for money laundering. The GOP considers the nation‘s banks, insurance companies, brokerage houses, and casinos to be the primary venues of money laundering.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: NO

Poland – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Polish Law:

    • Banks
    • Financial leasing and factoring companies
    • Currency exchanges
    • Investment companies and funds
    • The National Depository for Securities
    • Gambling institutions
    • Insurance companies
    • The National Bank of Poland
    • The Polish Post
    • Foreign entities carrying out brokerage activities
    • Electronic money institutions
    • Credit unions
    • Notaries
    • Foundations
    • Auctioneers
    • Pawnshops
    • Dealers of high value goods and precious metals and stones

Poland – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 19,279 from January to October 2011

Number of CTRs received and time frame: Not applicable

The following is a list of STR covered entities covered by Polish Law:

    • Banks
    • Financial leasing and factoring companies
    • Currency exchanges
    • Investment companies and funds
    • The National Depository for Securities
    • Gambling institutions
    • Insurance companies
    • The National Bank of Poland
    • The Polish Post
    • Foreign entities carrying out brokerage activities
    • Electronic money institutions
    • Credit unions
    • Notaries
    • Foundations
    • Auctioneers
    • Pawnshops
    • Dealers of high value goods and precious metals and stones
    • New payment services entities/agents

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 131 from January to June 2011
Convictions: Three from January to June 2011

 

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Finance Ministry maintains the effectiveness of actions against money laundering involving transfer of money to tax havens is improving with the increase in the number of cooperation agreements concluded with counterparts in such countries. There is also good and improving cooperation with international law enforcement agencies, while domestic efforts are focused on upgrading analytical tools and instruments.

Over the last few years, the GOP has gone to great lengths to strengthen and harmonize its anti-money laundering/counter-terrorist financing (AML/CFT) legal and regulatory tools and institutions with international standards. In 2011, cooperation among relevant authorities and institutions increased. However, work remains to ensure effective implementation. Poland should ensure promulgated regulations are fully effective. The GOP should promote additional capacity building in the private sector and continue to improve communication and coordination among the FIU and relevant law enforcement agencies.

Police and customs authorities, in particular, should continue to receive training on recognizing money laundering and terrorist financing methodologies, including trade-based money laundering and informal value transfer systems. A new technique used by money launderers in Poland is to put laundered money on a new variety of cash card that can be bought in stores. These cards are not registered to anyone, meaning they can be thrown away without leaving a trace. Criminals often use them to make transactions online. The FIU is looking for ways to upgrade analytical tools in order to be able to process data more comprehensively and efficiently.