The main reasons for adoption of this new piece of legislation which will start to apply from 1 April 2018 are improvement of the existing system and harmonization with the international standards in this area. Below are some of the most significant novelties.
Obligation of risk assessment
A novelty in relation to the previous law is the relevant person’s duty to conduct the risk assessment in relation to the entire business, in order to determine the level of vulnerability to money laundering and terrorist financing misuse. Risk assessment must be proportionate to the nature and extent of the business, as well as the size of the relevant person, and must take into account the basic types of risks (client risk, geographical risk, transaction risk and service risk) and other types of risks identified by the relevant person in accordance with the specificities of its business.
Streamlined procedure for identifying and verifying identity
The relevant person may obtain the mandatory data by way of direct insight into the register of the Business Registers Agency or other official public register, which introduces a certain level of flexibility to the entire procedure.
Another novelty is the duty of publishing each decision which imposes a penalty or other measure. After imposing a penalty or other measure for violation of the provisions of this law, the supervisory authorities are obliged to publish on their website a notification on this penalty or measure as well as on the person against whom this penalty or measure has been imposed.
The novelty of this piece of legislation is introduction of the term „trust”. Although trust is a legal institute which is not recognized by our legal system, there is a possibility of its presence in the ownership structure of the entity, which may lead to potential misuses. The law defines trust as a person under foreign law and lists and defines all the persons which may be registered within a trust, i.e. trustor, trustee, beneficiary and trust protector. In terms of this definition of trust, the relevant person must take all measures and actions of monitoring of the entities in accordance with the law, which is fully in line with the applicable international standards.
The lower limits of the pecuniary penalties have been increased for certain misdemeanors.
The relevant persons will primarily have the following obligations with respect to harmonization with this new law:
- to perform the respective actions and measures for the purpose of prevention of money laundering in relation to the entities with which business cooperation was established before entry into force of the new law and to conduct risk assessment. The deadline for the fulfilment of this obligation is 25 December 2018; and
- to harmonize their internal acts with the new law until 25 March 2018.