What are KYC and AML? Complex topics in simple terms<\/strong><\/h2>\nAML (Anti-Money Laundering)<\/strong>\u00a0is a set of measures to combat money laundering and terrorist financing. It is an international system of rules designed to prevent criminals from legitimising illegally obtained income through the banking system.<\/p>\nKYC (Know Your Customer)<\/strong>\u00a0is the practical tool for implementing AML policy. In simple terms, it means \u201cknow your customer\u201d. This is the process in which a bank collects and verifies information about you and your business to ensure that you are who you claim to be and that your activities are legal. In other words, AML is \u201cwhy we do it\u201d, and KYC is \u201chow we do it\u201d.<\/p>\nHow do banks practically verify clients as part of the procedure?<\/strong><\/p>\n\n- \n
Each bank maintains a list of high\u2011risk jurisdictions; they may refuse to work with citizens of those countries (for example, PKO BP lists Bulgaria, Latvia, and Romania).<\/p>\n<\/li>\n
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The client is checked against pan\u2011European databases for legal violations.<\/p>\n<\/li>\n
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Verification of a residential or correspondence address in Poland.<\/p>\n<\/li>\n
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Determination of whether the client is a US tax resident.<\/p>\n<\/li>\n<\/ul>\n
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\u2696\ufe0f Legal framework: which laws regulate this?<\/strong><\/h3>\nThe activities of Polish banks in the area of AML\/KYC are regulated by several levels of legislation.<\/p>\n
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Polish Act of 1 March 2018 on counteracting money laundering and terrorist financing.<\/strong><\/p>\n<\/li>\n- \n
European Union Directives (AMLD4, AMLD5 and new ones).<\/strong>
\nPolish legislation is harmonised with EU standards. The Fourth Directive (2015\/849) established basic financial monitoring requirements, the Fifth Directive (2018\/843) expanded access to beneficial ownership registers, and the new AML package (2024) introduces uniform rules across the EU.<\/p>\n<\/li>\n- \n
EU sanctions regulations.<\/strong>
\nBanks are obliged to check clients and their counterparties against EU sanctions lists (e.g., against Russia and Belarus). This directly affects the ability to open accounts and process transactions.<\/p>\n<\/li>\n<\/ol>\n <\/p>\n
\ud83d\udccb KYB: When not only the individual but also the business is verified<\/strong><\/h3>\nFor corporate clients, the term\u00a0KYB (Know Your Business)<\/strong> is used. This is a more complex procedure than KYC for individuals, as it requires analysis of the company structure, ownership chain, and ultimate beneficial owners.<\/p>\n