Money laundering and the AML procedure in the accounting office
From July 31, 2021, accounting offices gained new obligations resulting from the amendment to the Act on counteracting money laundering and financing of terrorism. What obligations are we talking about? What is the AML procedure? What sanctions must those accounting offices that do not implement them have to expect? What are obligated institutions and why did accounting offices join them?
Who is the AML procedure for?
Simply put, obligated institutions are entities covered by the AML (Anti-Money Laundering) procedure. Its functioning has two key tasks, i.e. counteracting money laundering and terrorist financing.
Before the amendment to the Act on Counteracting Money Laundering and Terrorism Financing, the list of obligated entities included mainly large financial institutions - they were, inter alia, domestic banks and branches of foreign banks, credit unions, domestic payment institutions, companies and investment funds, insurance companies and insurance intermediaries. From July 31, 2021, the AML procedure must also be implemented in accounting offices - as you can read in the act: "Entrepreneurs whose main activity is the provision of services consisting in the preparation of declarations, keeping tax books, providing advice, opinions or explanations in the field of tax or customs law".
Why did accounting offices join the obligated institutions?
The reasons are simple - while performing their duties, accounting office employees:
They gain extensive knowledge about the financial sphere of their clients. What's more, this is not fragmentary knowledge - during the cooperation with the client, the accounting office gains a comprehensive understanding of his finances and realized financial flows.
Taking into account their knowledge, they are able to identify transactions that may indicate, for example, money laundering.
At the same time, adding accounting offices to the obligated institutions meant for them a number of new, additional obligations. Moreover, the accounting offices operating at the time of the entry into force of the changes had little time to implement the required procedures.
What are the duties of accounting offices as obligated institutions?
The obligations of the obligated institutions are broad. Several areas of activities can be distinguished, the performance of which is to allow for the effective implementation of the AML procedure. It is about the fact that every accounting office is obliged to, among others:
1. Create internal procedures
The Act on counteracting money laundering and terrorist financing generally indicates what should be included in such a procedure. During its preparation, the following should be specified, for example:
Principles of identifying and assessing the risk of money laundering and terrorist financing related to a given economic relationship or an occasional transaction.
Rules for reporting by employees of both actual and potential violations of money laundering and terrorist financing regulations.
The general guidelines are only a guideline - accounting offices must independently determine what will be in the procedure.
After October 31, 2021, the procedure will have to be updated due to the entry into force of further changes.
2. Designate persons responsible for carrying out the AML procedure
The Act on counteracting money laundering and terrorist financing provides that such a person should be sought among the managerial staff. If there is a management board in the obligated institution, the responsible person should be its member. This is directly related to the decision making of such people.
What if the accounting office is small, e.g. employs only a few professional employees? Then it is enough to appoint one person.
3. Identify and assess ML / TF risks
The accounting office - as the obligated institution - should assess whether there is a high risk that a given entity (client of the accounting office) will participate, inter alia, in in money laundering. This assessment takes into account, inter alia, risk factors relating to customers, products or their delivery channels.
The regulations provide for an assessment to be made at least every 2 years. The accounting office may decide on the form of preparing such an assessment - it may be in an electronic or paper form.
4. Provide information to GIFI
The obligated institutions are obliged to provide information to the General Inspector of Financial Information (GIFI). The accounting office should designate a contact person for the GIFI. Its data must be disclosed in the form identifying the obligated institution, which is submitted to the GIFI.
The provision of information to the GIFI is associated with the preparation of documentation that confirms the performance of duties. Such documentation should also be kept for a specified period of time in the accounting office.
5. Conduct regular employee training
Employees of accounting offices who perform duties related to the prevention of money laundering and the financing of terrorism must undergo training. They are necessary for updating knowledge and reliable performance of duties. From October 31, 2021, such training courses will include issues related to the protection of personal data.
In this case, it is not enough to train employees once. It is necessary to renew training regularly so that employees keep their knowledge up-to-date.
AML procedure and penalties threatened by accounting offices for failure to fulfill their obligations?
Are you planning to establish an accounting office? Remember not to treat the obligations incumbent on obligated institutions neglect - for the failure to implement AML procedures there are severe penalties, not only of a financial nature. An example would be a penalty where the person responsible for the infringement is prohibited from holding a managerial position for up to one year.
The fact that owners of accounting offices should remember about their obligations may also be proved by financial penalties already imposed on obligated institutions. Experts indicate that the application of anti-money laundering and terrorist financing regulations is complicated even for large entities (e.g. banks), which - as a rule - have sufficient financial and human resources to adapt to all requirements. This, in turn, leads to the conclusion that smaller institutions (such as accounting offices) may not be able to cope with the challenges they face.
How to prepare for the implementation of the AML procedure? Due to the great interest in this issue, there were entities on the market (including law firms) providing comprehensive assistance in the implementation of the necessary procedures in the accounting office. Office owners can also take advantage of the extensive training offer and gain the necessary knowledge.