Anti-money laundering (AML) - an accounting office as an obligated institution

The government is trying to fight all manifestations of money laundering with increasing effectiveness, as evidenced by the next amendment to the AML Act. What is it really about? How are accounting offices to meet anti-money laundering standards? What new duties have been imposed on accountants and their offices? What should anti-money laundering look like? He discusses the article

What is AML?

Let's start by explaining the enigmatic AML acronym. Anti Money Laundering is a set of procedures aimed at preventing money laundering. The concept of AML in Polish legislation has appeared relatively recently, but the law in this area is subject to regular modifications in order to fight all manifestations of the illegal phenomenon as effectively as possible.

All provisions of the Anti-Money Laundering Act as well as the financing of terrorism come directly from the directives established by the European Union. Therefore, all institutions and companies, and especially obligated institutions, must adapt their activities to the restrictive legal requirements related to AML.

Why was it decided to fight such a direct fight against the symptoms of money laundering? The primary reason is to ensure financial security as well as minimize the risk of the proliferation of illegal money laundering only institutions.

What do we call an obligated institution?

What can we understand by the statement obligated institution? This concept was presented in the Act on counteracting money and terrorism financing and it defines all entities that conduct their activity in the field of bookkeeping. Due to the precise regulation of the concept of an accounting book, entities whose basic scope of activity only covers simplified accounting for sole proprietorships are exempt from the implementation of high standards.

Therefore, we refer to the obligated institution not only as accounting offices providing bookkeeping services, but also banks, investment entities and exchange offices. It is these activities that should closely follow any amendment to the Anti-Money Laundering Act, as in the event of a potential audit, they will have to demonstrate the implementation of special procedures.

Extending the duties of accounting offices in the context of AML

How does the Act increase the scope of duties of accounting offices in the context of the AML Act? First of all, accounting offices are required to keep a register of occasional transactions the value of which is equal to or greater than EUR 10,000. Interestingly, such a transaction can be made not only in the form of one transfer, but also several operations suspected of being related. Such a register must be kept by an accounting office and kept for a period of 5 years.

Is this the only additional obligation imposed on accounting offices? Unfortunately not. Moreover, entities keeping accounting books are obliged to provide all data on transactions from the register to the General Inspector of Financial Information.

Other duties include the creation and implementation of internal, written procedures aimed at counteracting money laundering, as well as training all employees in the correct implementation of the assumptions of such a procedure. Under the new regulations, the accounting office must provide each client with a statement in which the client declares that he does not occupy a prominent political position, and the accounting office is obliged to carry out the analysis and risk assessment of the transaction.

What is the registry of suspicious transactions?

Let us dwell for a moment on the subject of the register of suspicious transactions exceeding the equivalent of EUR 10,000. What data should such a register contain? Above all:

• Date of the transaction,

• Data of the parties to the transaction - if they are clients of the accounting office - in the case of companies, data constituting an extract from the National Court Register, in the case of natural persons, personal data, address of residence, date of birth and PESEL number,

• Data of the parties to the transaction - if they are not the clients of the accounting office - company name or name and surname in the case of a natural person,

• Transaction type (inflow or outflow),

• Transaction value,

• Transaction currency,

• Details of the bank account from which the transfer was made and to which the transfer was to be made.

All this information in the form of a report for the entire month should be submitted to the General Inspector of Financial Information within 14 days from the end of the calendar month. However, if the transaction is indicative of money laundering, information about such a transfer should be sent to the Inspector General immediately.

What are the consequences of failure to fulfill the tasks of the obligated institution?

Due to the obligation of the obliged entity to keep a register of transactions, failure to complete it may result in a financial fine or criminal sanctions. In line with the Anti-Money Laundering and Terrorism Financing Act, if the entity fails to register the transaction or submit it to the General Inspector, and fails to maintain sufficient security measures, it may, in extreme cases, be subject to imprisonment for up to 3 years. Such punishment, however, only takes place when the oversight was willful.

In the event of justified negligence, the entity is subject to a fine. As you can see, the act approaches the obligation to ensure security and AML procedures in a rather restrictive way, which should encourage all entities to comply with the new, additional obligations.