AML/CFT Policy – Financial Security Measures

Who must apply financial security measures and when?

Financial Security Measures are mandatory for obliged institutions. Their main objective is todetect the risk of money laundering and terrorist financing by analysing customers, business relationships and transactions. The application of these measures should be proportionate to the level of risk, which means that IOs adapt them to the situation, applying both simplified and enhanced FMLs.

The rationale for the use of a FML includes situations such as

• • suspected money laundering,
  • doubts about customer data,
  • the establishment of a business relationship
  • and specific transactions, such as the exceeding of certain amounts or the use of virtual currency

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Even long-standing business relationships may require the application of a FSC if there are significant changes to the customer’s existing status.

What is the catalogue of Financial Security Measures?

The AML Act defines a catalogue of FSCs, but we must emphasise that flexibility is allowed in their application depending on the level of risk present in the relationship with the client in question.

The catalogue includes:

• • identification of the client,
  • identification of the beneficial owner,
  • assessment of the business relationship
  • and ongoing monitoring of that relationship

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Identification of the customer involves checking data such as name, nationality and PESEL and TIN. Entities other than individuals have their own identification criteria.

Identity verification involves checking the data provided and is done before a business relationship is established. Verification can involve various documents, depending on the type of customer.

Assessing the business relationship involves analysing the IO’s relationship with the client and determining what products and services the client is interested in.

Ongoing monitoring of the business relationship is a continuous review of the client’s activities in line with its business profile and the risks assigned to it. This is important in the case of atypical transactions.

Each of the points mentioned, we discuss in detail in the Flipbook below.

In ensuring proper compliance with the FSC, Obligated Institutions must also keep records of their application each time, which will include analyses of transactions and the results of the application of the FSC. This ensures compliance and can facilitate possible inspections by regulatory authorities.

Remember that anti-money laundering is not only a legal requirement, but also a concern for the integrity and security of the company. Therefore, it is worth understanding and implementing effective AML strategies.

In the next part of our series on AML / CFT Policy, we will take a closer look at the topic of Financial Security Measures, focusing on the topic of risk and its proportion in relation to the application of FSC. We encourage you to follow our blog to stay on top of this topic.

Read the AML/CFT Policy FlipBook part 3