Being competent, pursuant to Article 12(1)(11) of the Act of 1 March 2018 on Counteracting Money Laundering and Financing of Terrorism (Journal of Laws of 2021, item 1132, as amended) – hereinafter referred to as the “AML Act”, to share knowledge and information regarding provisions on counteracting money laundering and financing of terrorism, the General Inspector of Financial Information – hereinafter referred to as the “General Inspector”, draws attention to the following issues.
 
I.    Selected provisions of the Act on Counteracting Money Laundering and Financing of Terrorism.
Pursuant to Article 34(1)(2)(a) and (b) of the AML Act, customer due diligence measures shall include:
•    identification of the beneficial owner and taking reasonable steps to verify its identity and
•    identification of the beneficial owner and taking reasonable steps to determine the ownership and control structure – in the case of a customer that is a legal person, an organisational unit without legal personality or a trust.
In the light of Article 37(2) of the AML Act, in the case of identification of the beneficial owner being the person referred to in Article 2(2)(1)(a) fifth indent, obligated institutions shall document:
•    any impediments resulting in the inability to determine the identity of natural persons referred to in Article 2(2)(1)(a), first to fourth indents, or doubts as to the identity of such natural persons;
•    any impediments related to the legitimate steps taken to verify the identity of the beneficial owner.
Pursuant to Article 50(2)(11) of the AML Act, the internal procedure in place at the obligated institution defines, taking the nature, type and scale of its business activity into account, the rules of conduct applied in the obligated institution and includes, in particular, the rules for documenting impediments identified in connection with the verification of the identity of the beneficial owner and steps taken to identify a natural person occupying a senior management position as a beneficial owner.
 
II.    Definition of a beneficial owner.
The General Inspector reminds that the statutory definition of a beneficial owner referred to in Article 2(2)(1) of the AML Act, consists of a non-exhaustive list, and the enumeration of potential beneficial owners included in points (a)-(c) of this provision serves as an example. Therefore, the obligated institution analyses all the premises included in the definition of the beneficial owner and identifies each natural person exercising direct or indirect control over the customer through their powers resulting from legal or factual circumstances, enabling them to exert a critical impact on the activities or actions taken by the company. In the special case, where it is not possible to identify beneficial owners pursuant to Article 2(2)(1)(a) first to fourth indents, the fifth indent shall apply, as a result of which persons holding a senior management position must be taken into account.
It should also be reminded that identification of the beneficial owner pursuant to Article 2(2)(1)(a) (first to fifth indents) and Article 2(2)(1)(b) and (c) of the AML Act, does not exclude the obligation to indicate as the beneficial owner also another person who can exert a critical impact on the activities or actions taken by the customer in accordance with the overall part of the definition referred to in Article 2(2)(1) of the AML Act (introduction to the enumeration[1]).
 
III.    Practical aspects of identifying a natural person holding a senior management position as a beneficial owner.
In practice, it may happen that customers of obligated institutions will include customers:
•    with a complex and multi-level ownership structure,
•    with an ownership structure which includes entities located in countries that do not disclose detailed information to the public – for example about beneficial owners.
It should be emphasised that circumstances such as a complex and multi-level ownership structure or the lack of public information about the ownership structure are not, as a rule, circumstances (that could be treated as a documented inability to establish the identity of natural persons or raise doubts as to the identity of such people) allowing for identification as a beneficial owner a natural person holding a senior management position.
Regardless of how complex and multi-level the customer’s ownership structure is and whether information about the customer’s ownership structure is available to the public or not, the obligated institution is required to take steps to identify the beneficial owner, verify its identity and determine the customer’s ownership and control structure. In this context, it is worth emphasising that pursuant to Article 43(2)(4) of the AML Act a higher risk of money laundering and financing of terrorism may be evidenced, in particular, by an unusual or excessively complex ownership structure of the customer compared to the type and scope of its business activity.
Therefore, when establishing and analysing a complex and multi-level ownership structure, the obligated institution is required, in particular, to correlate this circumstance with the type and scope of the customer’s business activity and, consequently, to consider assigning higher risk and applying enhanced customer due diligence measures. The use by the customer of legal forms limiting access to information about owners also must be reflected in the risk level assigned to the customer. 
It should be reminded that an obligated institution that is unable to apply one of the customer due diligence measures referred to in Article 34(1) of the AML Act (including the measure consisting in the identification of the beneficial owner, verification of its identity and determination of the customer’s ownership and control structure) shall:
•    not establish a business relationship,
•    not carry out an occasional transaction,
•    not carry out transactions through the bank account,
•    terminate the business relationship.
It should also be remembered that in accordance with Article 33(4) of the AML Act, obligated institutions apply customer due diligence measures to the extent and with an intensity accounting for the identified risk of money laundering and financing of terrorism related to business relationships or an occasional transaction, as well as its assessment. Therefore, the list of activities related to customer identification, verification of its identity and determination of the customer’s ownership and control structure must be adapted to the specific and individual state of facts. Therefore, a general statement about the existence of a complex and multi-level ownership structure is not sufficient to indicate a natural person holding a senior management position as a beneficial owner. As part of applying the customer due diligence measures, an obligated institution is required to establish the ownership and control structure of its customer, i.e. to identify specific entities and then identify the beneficial owner and verify its identity Only where the analysis of the customer’s ownership structure shows that it is impossible to establish the identity of natural persons specified in Article 2(2)(1)(a) first to fourth indents of the AML Act, or there are doubts as to the identity of such persons, is it possible to identify as the beneficial owner a natural person holding a senior management position (in accordance with Article 2(2)(1)(a) fifth indent of the AML Act).
Where the obligated institution has identified as a beneficial owner, pursuant to Article 2(2)(1)(a) fifth indent of the AML Act, a natural person holding a senior management position, this institution shall document:
•    any steps taken to determine the identity of natural persons specified in Article 2(2)(1)(a) first to fourth indents of the AML Act (e.g. obtaining an excerpt from the customer’s entry in the National Court Register, the customer’s articles of association, the agreement on the transfer of ownership of the customer’s shares, taking down a telephone conversation with the customers representative by an employee),
•    any circumstances found by the obligated institution to make it impossible to determine the identity of natural persons referred to in Article 2(2)(1)(a) first to fourth indents of the AML Act, or raise doubts as to the identity of such natural persons (e.g. finding that each partner of the customer – a natural person – holds 20% of the shares),
•    any impediments related to reasonable steps taken to verify the identity of the beneficial owner, i.e. a natural person holding a senior management position (e.g. failure to report information about the beneficial owner to the Central Register of Beneficial Owners, impediments related to the lack of the physical presence of the beneficial owner, impediments related to video verification).  
 
________________________________________
[1] Whenever the Act refers to: beneficial owner – it is understood as any natural person who exercises, directly or indirectly, control over a customer through its powers resulting from legal or actual circumstances, enabling exerting a critical impact on activities or actions undertaken by the customer, or any natural person on whose behalf a business relationship is established or an occasional transaction is conducted, including: (…)