The General Inspector of Financial Information’s communication of 22 August 2018 on the identification of the obligated institution’s customer and verification of his identity without a physical presence of the customer - to determine whether the lack of his physical presence during the establishment of business relationships or the performance of an occasional transaction obliges the obligated institution to apply enhanced customer due diligence measures.

 

Pursuant to Article 33(1) of the Act of 1 March 2018 on counteracting money laundering and financing of terrorism (Journal of Laws, item 723, as amended) - hereinafter referred to as “the Act” the obligated institutions defined in Article 2(1) of the Act were obliged to apply customer due diligence measures towards their customers.

The catalogue of customer due diligence measures has been stipulated in Article 34(1) of the Act, while the cases in which the obligated institutions must apply them can be found in Article 35 of the Act.

Pursuant to Article 33(4) the obligated institutions apply customer due diligence measures to the extent and with an intensity taking into account the identified money laundering and financing of terrorism risk related to business relationships or an occasional transaction as well as its assessment. By this one should understand that it is the above-mentioned risk identified and assessed by the obligated institution that determines the intensity of applying customer due diligence measures by the obligated institution towards the customer.

According to the information received by the General Inspector of Financial Information, the scope of application of customer due diligence measures raises doubts whether the obligated institution must apply enhanced customer due diligence measures in the cases in which the obligated institution is establishing or maintaining business relationships or performing an occasional transaction without a physical presence of the customer, and it identifies the risk of money laundering related to this very  specific situation, and assesses it as low.

 

Pursuant to Article 43(2)(7) establishing or maintaining of business relationships or performing an occasional transaction without a physical presence of the customer may indicate a higher risk of money laundering and financing of terrorism where the associated increased risk of money laundering and financing of terrorism has not been otherwise mitigated, including, through the use of notified electronic identification means adequately to the substantial security level, referred to in Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (EU OJ  L  257, 28.8.2014, p. 73), or the requirement to use a qualified electronic signature or a signature confirmed by the ePUAP trusted profile.

The interpretation of this provision leads to a conclusion that the lack of a physical presence of the customer in the case of establishing or maintaining of business relationships or performing an occasional transaction is no indication automatically proving that a higher risk of money laundering and financing of terrorism exists but it only may indicate the occurrence of such a risk.

However, the responsibility for determining whether a higher risk of money laundering and financing of terrorism occurs in a given case always lies with the obligated institution which identifies the risk of money laundering and financing of terrorism associated with the business relationship or an occasional transaction and assess the level of the risk identified (Article 33 of the Act).

Furthermore, the General Inspector of Financial Information notes that Article 42(2) of the Act is of an open nature and does not specify exhaustively all cases, to which a higher risk of money laundering and financing of terrorism may relate.