The AML Law imposes a set of obligations on Obligated Institutions (IOs) to counter money laundering and terrorist financing. These obligations are characterised by diversity and cover many areas of IO activity. However, it is crucial that IOs are aware of their obligations and act in accordance with legal requirements.

One of the key responsibilities of IOs is the need to establish an internal hierarchy responsible for AML. In this regard, appropriate individuals should be appointed to oversee and monitor the IO’s activities in the context of AML and CFT.

The group responsible for overseeing the implementation of the AML / CFT policy customarily includes:

• Executives
• AML Officer
• Member of the Management Board

However, in a situation where we are talking about Sole Proprietorships, the Obligated Institution will only have one person eligible to perform all the functions mentioned above. In such a situation, we are dealing with a so-called Individual IO.

As part of the activities carried out in accordance with the AML / CFT policy, it is also necessary to introduce financial security measures (FSC), which include examining the risks associated
with transactions and customer relationships and keeping detailed records of the flow of documents and information within the company. This is an important activity aimed at identifying possible risks and suspicious transactions within the company.

The basic catalogue of WSCs distinguishes between:

• Identification of the client and verification of his/her identity – who the client is and whether he/she is definitely the entity he/she claims to be
• Identification and investigation of beneficial owners – i.e. investigating the circle of people who have at least an indirect influence on the client’s business
• Evaluation of the business relationship – examination of the typicality of the established business relationship
  from the perspective of the client’s business profile
• Ongoing monitoring of the business relationship – as long as the relationship with the client lasts,
  so long should it be examined from the perspective of the possibility of money laundering and terrorist financing

The AML Law, by virtue of Article 48, allows the IO to cede the application of the AML to external entities, although it must be remembered that this does not relieve the IO of its responsibility to apply the AML.

The internal AML procedure is another important element in the AML process. IOs must create personalised procedures that include, among other things, the application of financial security measures, the transmission of information to the General Inspector of Financial Information (GIIF) and the training of employees.

Another duty of IOs to cooperate with state authorities, such as the GIIF or the Public Prosecutor’s Office, is also extremely important. IOs are obliged to report on high-value transactions (usually €15,000 and above) and suspected money laundering or terrorist financing offences.

Keeping records related to clients and transactions is another obligation. IOs must collect the necessary documents and information for 5 years to document their AML activities. This period may be extended for a maximum of another 5 years when requested by the GIIF from the Obligated Institution.

AML training for IO staff is designed to ensure that they have the appropriate knowledge
and skills in the AML area. This ensures that employees are aware of the risks and, in the event of a suspected money laundering or terrorist financing situation
, are able to respond effectively.

A final important element is the introduction of an anonymous whistleblowing procedure. This enables IO employees to report potential violations of the law without fear of reprisals.

Failure to comply with these obligations can result in serious consequences, both
in the legal and business spheres. Sanctions imposed on IOs for non-compliance with the requirements of the AML Act, can lead to loss of corporate reputation, financial penalties and hindrance
to business transactions.

As such, compliance with AML obligations is critical for IOs to ensure undeniable compliance with the law and effective protection against money laundering and terrorist financing threats.

For more information, please see the Flipbook below. We encourage you to have a look and download the PDF.

If you have any questions regarding the introduction of an AML / CFT policy in your company you are welcome to contact us.

SEE FILBOOK BELOW: