Being competent, pursuant to Article 12(1)(11) of the Act of 1 March 2018 on Counteracting Money Laundering and Financing of Terrorism[1], 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.
The definitions of a politically exposed person, family members of such a person and persons known to be close associates of a politically exposed person are provided for, respectively, in Article 2(2)(11), Article 2(2)(3) and Article 2(2)(12) of the AML Act. The provisions in question implement to the national legal system, respectively, Article 3(9), Article 3(10) and Article 3(11) of Directive 2015/849 [2].
Pursuant to the provisions of Directive 2015/849, the status of a politically exposed person, hereinafter referred to as “PEP” (family members of such person and persons known as close associates of a politically exposed person), does not depend on their place of residence, citizenship, nationality, country or an international organisation in which they perform certain functions or hold a position. The above Directive does not divide politically exposed persons into “domestic PEPs” and “foreign PEPs”. The provisions in question do not specify either the notions of “prominent position” and “prominent function”, but only contain an exemplary list of positions and functions classified as politically exposed positions. At the same time, they clearly indicate that this group of positions and functions does not include middle-ranking or more junior officials. The same model was applied in national regulations, i.e. in the AML Act.
Moreover, pursuant to Article 20a(1) of Directive 2015/849 added by Article 1(13) of Directive 2018/843 [3], Member States are required to compile and publish a national list of politically exposed persons.
In the national legislation, this obligation was fulfilled by the Regulation of the Minister of Finance, Funds and Regional Policy of 27 July 2021 on the list of national positions and public functions that are exposed political positions.[4] This Regulation enumerates domestic positions and public functions that are exposed political positions. These positions and functions were selected in accordance with the statutory definition of politically exposed persons, i.e. Article 2(2)(11) of the AML Act, with the assumption that the list in question does not include middle-ranking and more junior positions in state bodies or central government administration bodies.
In the light of Article 43 of the AML Act, obligated institutions are required to apply enhanced customer due diligence measures “in cases of higher risk of money laundering or financing of terrorism, as well as in the cases specified in Articles 44-46”, i.e., among others, with respect to customers being PEPs (Article 46 of the AML Act).
Pursuant to Article 46(1) of the AML Act, implementing Articles 20-23 of Directive 2015/849 to the national legal order, obligated institutions are required to implement risk-based procedures enabling the identification of customers or their beneficial owners as politically exposed persons.
Due to the above, both the establishment of a business relationship with a customer being a PEP and its maintenance, as well as the conclusion of occasional transactions, automatically requires an institution obliged to apply specific procedures for identification and verification of customers and their beneficial owners, as well as to apply enhanced customer due diligence measures.
Article 46 of the AML Act does not provide for a list of activities that make it possible to determine whether the customer or their beneficial owner is a PEP. The provision in question indicates the need for obligated institutions to implement appropriate internal procedures. Nevertheless, their selection and specific solutions are to be regulated by the obligated institution itself. Therefore, the internal regulations of obligated institutions as regards the identification of PEPs may differ due to the different approach to risk adopted by obligated institutions, their specific characteristics and the level of the risk of money laundering and financing of terrorism identified by them.
The AML Act provides legal grounds enabling obligated institutions to obtain from a customer a PEP status declaration, submitted under pain of criminal liability for submitting a false declaration. Institutions may accept such declarations both in the written and document form.
It should be noted that in the light of the provisions of the Civil Code [5] in order to maintain the written form it is required to submit a handwritten signature on a document including a declaration of will, while “to maintain the document form of a legal act, it is sufficient to submit a declaration of will in the form of a document in a way that enables identification of the person submitting the declaration.” (see Article 772 of the Civil Code). Therefore, in order to maintain this form, it is required to submit a declaration of will in the form of the document referred to in Article 773 of the Civil Code in a way that makes it possible to identify the person by whom it is submitted. In practice, to maintain this form, it is enough to submit a declaration by e-mail, text message or by fax.
It should be emphasised that accepting declarations from customers is not obligatory, and the obligated institution is required to verify the status of the customer and the beneficial owner, because the liability for incorrect determination of the PEP status is always borne by the obligated institution.
In the opinion of the General Inspector, when introducing internal procedures, obligated institutions should take into account the list referred to in Article 20a(3) of Directive 2015/849 added by Article 1(13) of Directive 2018/843, the list of national positions and public functions that are politically exposed positions referred to in the above-mentioned Regulation of the Minister of Finance, Funds and Regional Policy, external databases as well as information from other reliable sources.
In the light of the aforementioned provisions, when determining the PEP status of the customer or their beneficial owner in the case of carrying out an occasional transaction by the obligated institution, the conditions specified in Article 35(1) of the AML Act shall apply.
In the case of business relationships, identification by the obligated institution of a PEP entails the need to apply enhanced customer due diligence measures with respect to such a customer, as well as other steps referred to in Article 46(2)(1) and (2), i.e.:
1.    obtaining the approval of senior management for establishing or continuing the business relationship with the PEP;
2.    taking adequate measures to establish the source of the customer’s wealth and source of funds that are involved in business relationships or transactions with such customer;
3.    intensifying the customer due diligence measure referred to in Article 34(1)(4).
The General Inspector notes that the fact that the customer or the customer’s beneficial owners have the PEP status obliges the obligated institution to apply enhanced customer due diligence measures with respect to such customer.
Obligated institutions that are insurance companies performing the activities referred to in Section I of the Appendix to the Act of 11 September 2015 on Insurance and Reinsurance Activities [6], including domestic insurance companies, main branches of foreign insurance companies with their registered office in a non-EU country and branches of foreign insurance companies established in a Member State of the European Union other than the Republic of Poland that are parties to an insurance contract, shall take – no later than at the time of transfer of the rights under such contract or payment of benefits – adequate measures to determine whether those entitled under the contract or their beneficial owners are politically exposed persons.
In the period from the date when a person ceases to hold a politically exposed position until it is established that no higher risk is associated with that person, but for at least 12 months, the obligated institution shall apply with respect to such person measures accounting for that risk (Article 46(5) of the AML Act).
Pursuant to Article 46(6) of the AML Act, the above provisions relating to PEPs shall apply mutatis mutandis to the family members of a politically exposed person and persons known to be close associates of a politically exposed person. 

 
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[1] Act of 1 March 2018 on Counteracting Money Laundering and Financing of Terrorism (Journal of Laws of 2021, item 1132, as amended).
[2] Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 05.06.2015, p. 73, OJ L 156, 19.06.2018, p. 43 and OJ L 334, 27.12.2019, p. 155).  
[3] Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.
[4] Regulation of the Minister of Finance, Funds and Regional Policy of 27 July 2021 on the list of national positions and public functions that are exposed political positions (Journal of Laws, item 1381).
[5] Act of 23 April 1964 – Civil Code (Journal of Laws of 2020, item 1740, as amended).
[6] Act of 11 September 2015 on Insurance and Reinsurance Activities (Journal of Laws of 2021, item 1130, as amended).