More obligated institutions among accounting firms (AML) | PRO HR Compliance

2021.06.24

Extensive amendment of the Money Laundering Prevention Act expanded the group of the obligated entities. Many more companies and entities providing accounting services will have to satisfy the requirements imposed by its provisions. 

A lot of doubts have been raised by recognizing providers of bookkeeping services as obligated institutions. In accordance with the Accounting Act, such business involved performing a number of activities associated with the keeping of accounting ledgers, inventory-taking, valuation of assets and liabilities, and preparation of financial statements. The definition of an obligated institution did not include entities which, in a group, performed the functions of a shared services centre or conducted only a portion of the accounting and bookkeeping activity. 

The amendment adds a new category of obligated institutions to the act. These are entrepreneurs whose core business includes provision of services consisting in preparation of tax returns, keeping of accounting ledgers, providing advice, opinions or clarifications regarding the tax and customs law. Hence the new definition covers entities which perform only some services and even tax advisors. 

The new obligated institutions will have to adapt their internal structure and procedures to the statutory requirements. They will have to appoint a management board member responsible for implementation of these obligations and senior management staff and AML manager to perform them. The obligated institutions have to develop an assessment of the money laundering risk in their daily operations, which will constitute the basis of an internal money laundering prevention procedure. With regard to their clients, accountants will have to apply financial security measures – obtain information about beneficial owners, representatives, assets and scope of operations. Application of these measures has to be documented and some transactions should be reported to the General Financial Information Inspector. 

The new obligated institutions have very little time to adapt to the new regulations. They will enter into effect already on 31 July 2021. The implementation of all new obligations requires a lot of organizational effort, especially on the part of financial departments, HR departments and management boards. 

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