Money laundering is generally associated with financial institutions, especially banks. This fact is not surprising, because from a historical perspective and still even today, banks comprise the main channel through which funds originated from illegal sources are introduced into official circulation. Nonetheless, inter alia due to more stringent regulation of the banking sector and improved internal control within banks, activities associated with money laundering seem to have moved to the non-banking financial sector or non-finance businesses over the recent years.
The following obliged institutions are subject to the Act on counteracting money laundering and terrorist financing (except for banks) in Poland today:
- insurance companies;
- investment funds;
- electronic money institutions;
- cooperative savings and loan unions (the so-called SKOKs);
- entities carrying out business activity relating to games of chance, bets as well as gambling machines;
- post operators;
- notaries, statutory auditors, tax advisers;
- entities providing professional bookkeeping services (accountants);
- entities providing currency exchange operations (exchange offices);
- entrepreneurs operating auction houses, antique shops, carrying out business factoring, trading in metals or precious/semi-precious stones, commission sale or real estate brokerage;
- entrepreneurs within the meaning of the Act on freedom of economic activity, receiving payment for commodities in cash of the value equal to or exceeding the equivalent of EUR 15,000.
The scope of activities trigging application of the regulations on counteracting money laundering is relatively broad and embraces areas that – at first glance – have nothing to do with money laundering as such. Our experience shows that awareness of counteracting money laundering issues and the associated threats that lurk outside the sector of finance is relatively low, which, in many organizations, results in lack of proper mechanisms to counteract money laundering.
Entrepreneurs that fall within the scope of the Act on counteracting money laundering and terrorist financing, should keep in mind that by the end of the first half of 2017, EU member states, including Poland, are under an obligation to introduce into their domestic legal regimes the changes that arise from the Fourth Directive of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (also known as 4th AMLD).
The upcoming changes in the law should be seen as a perfect opportunity to review the anti-money laundering system and implement the new rules. Among the most significant changes brought by the 4th AMLD is the closer control and much higher and more broadly applied financial and administrative penalties, both for legal and for natural persons.
One needs to keep in mind that the risk of money laundering as well as preventive measures against it are bound to differ, depending on the industry or even individual companies. For that reason a proper money laundering risk assessment should be the starting point to ensure compliance of your organization with the statutory requirements and build an effective system to counteract money laundering. The risk evaluation should account for the following factors:
- geographic area
- client base
- product/ service specifics
- distribution channels.
The risk assessment approach makes it possible to direct limited resources more effectively, in a manner that is adjusted to the situation and the capabilities of the organization.
Implementing an anti-money laundering system does not necessarily require intensive organizational efforts or costs, providing the relevant knowledge and experience is at hand. Many organizations should be able to fall back on the solutions (processes, systems and human capital) that are already in place, and carry out their implementation effectively with these resources only. Correct interpretation of the requirements laid down, detailed analysis of the current solutions, and apt recommendations that do not generate unnecessary costs will be instrumental in that process. Improving the awareness of the employees who perform duties related to AML requirements is equally important.
For more information about the upcoming changes linked with the 4th AMLD, please follow the link:
Deloitte Forensic offers comprehensive support in counteracting money laundering. We are among the most experienced teams that specialize in assisting businesses in this area. Our experts have completed a great number of projects for both Polish and international institutions.