Poland is an EU member state that follows a dual sanctions regime. This member state enforces EU sanctions, in addition to enforcing national sanctions that go beyond them.
Businesses holding the status of an “obliged entity” under Polish AML legislation must take into account a new list of financial sanctions released on 26 September 2023.
- Universally applicable sanctions
With respect to sanctions that must be complied with by all persons subject to the Polish jurisdiction, two regimes apply:
- EU sanctions, directly applicable in Poland as part of EU law
- Polish national sanctions, in particular a local list of designated parties subject to asset freezes, prohibition to provide funds and economic resources, and/or other measures
As of 28 September 2023, the Polish list of designated parties consists of 424 individuals and 63 entities. Entities owned or controlled by the designated parties are also subject to measures. Designation decisions are made by the Minister of Internal Affairs and Administration (MSWiA).
- Sanctions applicable to “obliged entities” under AML rules
Polish legislation related to combatting money laundering and terrorist financing imposes the requirement for “obliged entities” to apply restrictive measures to persons designated on the list maintained by the General Inspector of Financial Information (GIIF), i.e., Poland’s financial investigation authority. Also, in this respect, these sanctions are based on two regimes:
- The implementation of resolutions adopted by the United Nations Security Council – currently, the respective sanctions lists implement resolutions: 1267(1999), 1989(2011), 2253(2015) and 1988(2011), i.e., those related to ISIL (Da’esh), Al-Qaida and the Taliban.
- Independent designations made by GIIF
GIIF had not independently designated any person until 26 September 2023, when the first two designations appeared. According to an explanation issued by GIIF, the designations were made at the request of the Embassy of the United States based on the UN Security Council Resolution 1373.
“Obliged entities” have been broadly defined in Polish AML legislation, and include, among others: banks, investment firms, stock exchanges, investment funds, insurers, insurance brokers, virtual currency operators, notaries, lawyers, tax advisors, accountants, corporate service providers, real estate brokers, businesses involved in certain non-wire cash transactions, and art dealers.
- Key takeaways
Given the complexity of Polish sanctions legislation, we recommend internal verification whether the sanctions databases currently used take into account the local Polish sanctions whenever Poland is involved.
Potential loopholes may relate to sanctions databases that do not include these specific Polish sanctions lists or database settings resulting in Polish national sanctions not being flagged.
We also note that Poland is a strong business services center for key global players. Transactions processed in Poland may fall under the local sanctions jurisdiction even if no other nexus to Poland exists.
