Poland

CENTRAL AUTHORITY FOR REPORTING

General Inspectorate of Financial Information

HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED?

In September 2008 the Ministry of Finance informed that the legislative procedure regarding the implementation of the Third Directive into the Polish legal system is still ongoing. This also relates to bringing Polish law in line with the 2006/70/EC Directive which lays down, inter alia, implementing measures for the Third Directive. The implementation shall be introduced by the “Act on Counteracting the Introduction of Property Values Originating from Illegal or Undisclosed Sources to Financial Transactions and on Counteracting the Financing of Terrorism and Amending the Penalty Code”. The amended law is planned to be re-named as the “Act on Counteracting Money Laundering and Financing of Terrorism”.

Moreover, the President of National Bank of Poland, the Minister of Infrastructure, the Minister of Interior and Administration, the Chief of the European Integration Committee and the Minister of Justice suggested new amendments to the aforementioned piece of legislation in August 2008. The potential changes are currently subject to intense consultations with the Polish Government’s European Committee. The new anti-money laundering law will further be placed on the Polish Parliament’s agenda once the consultation process is completed. As consequence, necessary legislative steps will probably postpone the implementation of the 2005/60/EC Directive until 2009. 

ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

The Second EU Money Laundering Directive has been implemented. Amendments to the November 2000 Act on Counteracting Introduction into Financial Circulation of Property Values Derived from illegal or Undisclosed Sources in 2004 widened the scope of those required to report transactions to include lawyers and legal counsellors, not just notaries.

Therefore, as of May 2004, the Act classifies as obligated institutions:

• Attorneys carrying on their profession;
• Legal advisers performing their profession outside their labour relationship;
• Foreign lawyers rendering legal assistance outside their labour relationship.

The Polish Bar has mounted a challenge against certain provisions of the anti-money laundering legislation. The Polish Bar has submitted a motion to the Constitutional Tribunal to determine the consistency of certain regulations with the Constitution of the Republic of Poland.

The scope of duties to be performed by legal professionals under the Act and the limitation of professional secrecy are challenged as violating constitutional rules and rights as:

• Principles of democratic state ruled by law (art.2),
• Freedom of rights of persons and citizens (art.5), 
• Freedom of economic activity including freedom to pursue occupation (art.20, art. 65 it.1), 
• Right to defense (art.42 it.2), 
• Right to fair and public hearing (art.45 it.1),
• Right to legal protection of private and family life (art.47), 
• Freedom and privacy of communication (art.49), 
• Rules of collecting and making accesible information on citizens (art.51 it.1), 
• Rule of proportionality in interfeiting into exercise of constitutional freedoms and rights by the State (art. 31 it.3), 
• Rule of legal professions in which the public places confidence (art. 17 it.1).

On July 2nd 2007, the Constitutional Tribunal issued a ruling in response to a motion submitted by the Polish Bar which challenged the professional-secrecy provision of the Polish AML law. According to the AML law, lawyers are not obliged to notify the relevant authorities of suspicious transactions only when they represent a client in court proceedings or give an opinion connected with these court proceedings. The Polish Bar argued that such limitation was inconsistent with the Constitution of the Republic of Poland.

In its ruling, the Constitutional Tribunal stated that lawyers were also allowed to refrain from notifying the relevant authorities of suspicious transactions when they provided legal assistance to and determined the legal status of a client. The ruling is consistent with EU Directive 91/308.

According to an European Union press release of 5 June 2008 (Ref: IP/08/860), the European Commission (EC) is pursuing infringement actions against 15 member states, including Poland, for failing to adopt and implement the Third EU Money Laundering Directive into national law by the deadline of 15 December 2007. Upon receiving the formal request, the infringing nations will have two months to provide an acceptable response or the EC may refer the issue to the European Court of Justice.

LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES

November 1, 1992

Order issued by the President of the National Bank of Poland instructing banks how to deal with money entering the financial system from illegal sources.

August 29, 1997

Banking Law Act followed by a Resolution of the Banking Supervisory Commission (1998) adding instructions on registration of transactions which exceed a certain threshold and identification of customers.

November 16, 2000

Act on Counteracting Introduction into Financial Circulation of Property Values derived from illegal or undisclosed sources and on Counteracting the Financing of Terrorism, as amended, implementing Directive 91/308 EEC and Directive 2001/91/EC.

The Act penalises the failure by institutions to fulfill their obligations arising under the Act.

Article 299 of the Criminal Code criminalizes tipping off.

IN ADDITION TO THESE LAWS, IS THERE ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS CURRENTLY IN PLACE?

Ewa Butkiewicz, Ph.D, Wardynski & Partners, Legal Professions in Poland and Current Regulations on Anti-Money Laundering, IBA Conference, Chicago, 18 September 2006

UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER AN OBLIGATION TO REPORT?

Obligated institutions shall submit the information on transactions recorded in accordance with Article 8 (1) and (3) of the Law to the General Inspector of Financial Information (GIFI).

According to Article 2 of the Law, “obligated institutions” include lawyers, legal counsellors, and notaries in the scope of notarial activities relating to property values transactions. An obligated institution that accepts an instruction (order) from a customer to perform a transaction are obligated to record suspicious transactions irrespective of their value.

Legal professionals´ duties include:

• Collection of information required by the Act;
• Providing the General Inspector of Financial Information (GIFI) with the information;
• Withholding transactions on GIFI´s demand;
• Other duties.
  

Legal professionals do not report transactions:

• Which are not suspicious;
• Which are not performed by legal professionals by customer order; 
• Which are only planned (doubtful).

Professional Secrecy of legal professionals:

From the year 2004, information required by the Act is excluded from privilege to the extent provided by the Act.

CLIENTS IDENTIFICATION AND VERIFICATION

According to Article 9 of the Law. No 1. In order to perform an obligation to record transactions, the obligated institutions shall identify their customers each time they place a written, oral or electronic instruction (order). 2. Identification referred to in paragraph 1 shall provide for:

1. In case of natural persons and their representatives - establishing and recording the characteristics of a document certifying identity on the basis of separate provisions or a passport; and also the first and last names, nationality and address of a person performing the transaction, and PESEL personal identification number in case of presenting an identification card or a country code in case of presenting a passport; and in case of a person on behalf of whom or in favour of whom the transaction is performed - establishing and recording his first and last names and address;
2. In case of legal persons - recording valid data on the basis of an excerpt from the court registry or other document specifying the name (company’s name), form of organization of a legal person, its seat and address and valid document certifying the authorisation given by the legal person to the person conducting the transaction and the data specified in point 1, referring to the representative;
3. In case of organisational units without legal personality - recording the data from a document specifying its form of organization and an address of its seat; and from the document certifying an authorisation given to the persons performing the transaction to represent the unit and the data specified in point 1, referring to the representative.
4. Identification referred to in paragraph 1 shall also refer to beneficiaries of transactions and shall include establishing and recording their name (company’s name) or the first and last names and address, within the scope of rights granted to a given obligated institution regarding establishment of identification data performed with relevant accurateness by the institution.
   
   • If the circumstances of a transaction in question indicate that a person performing it does not act in his own name, an obligated institution should identify the entities on behalf of and in favour of which the person conducts the transaction.

LAWYERS PROSECUTED FOR MONEY LAUNDERING SITUATIONS

The total number of notifications of suspected transactions sent by obligated institutions in 2005 was approximately 70,000.

Among 1020 written notifications:

• 1007 were from banks;
• 4 were from brokerage firms;
• 4 were from insurance companies, and
• 5 were from other institutions.
  

There were 27 controls of obligated institutions carried out by GIFI, none were from offices of attorneys or legal advisers.