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Poland must improve regulatory framework and increase measures to tackle money laundering and terrorism financing

Strasbourg 1 February 2022
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Poland must improve regulatory framework and increase measures to tackle money laundering and terrorism financing

In a report published today, the Council of Europe’s MONEYVAL Committee calls on Polish authorities to improve the regulatory framework and to strengthen the practical application of measures meant to stop money laundering and financing of terrorism.

Most legal requirements and practical actions put in place by the authorities ensure a satisfactory level of transparency of legal persons, arrangements, and their beneficial ownership. The report acknowledges that the private sector demonstrated a substantial level of effectiveness in applying the money laundering (ML) and terrorist financing (TF) preventive measures, including customer due diligence and internal controls. Positive conclusions have been drawn on Poland’s capacity to co-operate internationally.

However, further improvements are needed to enhance the country’s capacity to understand ML threats emanating from certain types of predicate offences, given that authorities did not display a comprehensive view of the factual and potential amounts of criminal proceeds. More efforts are needed to ensure a uniform and comprehensive understanding of ML/TF vulnerabilities and appropriate identification and reliable assessment of TF risks.

While the Polish Financial Intelligence Unit is a key source of financial intelligence, with full access to a wide variety of information from the private and public sectors, the results of their analysis are not sufficiently exploited at the investigative stage. MONEYVAL encourages Poland to take procedural and institutional measures to ensure that ML is detected and investigated efficiently, including by adopting a coherent practice in tasking law enforcement agencies with ML investigations, and detailed guidelines on effective parallel financial investigations. Fundamental improvements are needed regarding the seizure and confiscation of proceeds of crime from ML and associated predicate offences.

Moreover, the authorities should take measures to clarify that terrorism financing is a stand-alone crime and not a by-product of terrorism in terms of risk and criminalization. The cash control mechanisms at the border should be strengthened by providing a legal basis to stop and restrain suspicious assets. A specific risk assessment on the NPO sector’s exposure to TF risks should be conducted, and targeted measures should be applied for those entities which are more vulnerable to TF abuse.

Poland should address the existing gaps in relation to preventing criminal control of obliged institutions and provide resources to allow for the comprehensive exercise of those controls and supervision. This should include additional domestic coordination to ensure that supervision by each individual authority is risk-based and effective.

Finally, the report states that a supervisory system, including a sanctioning regime, on proliferation financing must be urgently put in place. There should be further awareness-raising activities to enhance knowledge and understanding of some authorities and entities of the private sector on their respective obligations.

MONEYVAL carries out its assessments on the basis of the 40 Recommendations of the Financial Action Task Force (FATF) and the FATF assessment Methodology. Poland will be subject to MONEYVAL’s enhanced follow-up reporting process as a result of the report.