For all businesses and also some non-business organisations in Poland now, there is a new obligation, namely to identify the real ultimate beneficial owners (“UBO”s) onto a central public register. In Polish this is called Centralny Rejestr Beneficjentów Rzeczywistych which is easy for them to say, but not so easy for us, so the form CRBR is an acceptable abbreviation. Literally this means “Central Register of Real Beneficiaries” but we would normally say “Beneficial Owners” or “Ultimate Beneficial Owners” or just UBOs which is like a UFO, but more “boring” than “flying”, unless of course you own something quite valuable, in which case it is not boring at all.
This was all enacted last year with an initial deadline of 13th May 2020 which has now, because of the pandemic, been set back to 13th July 2020, and may well need to be set back further, however at the time of writing the deadline is STILL 13th July 2020, which is a Monday.
The initiative became law by way of enacting an EU Directive on combatting money laundering which goes right back to 2015. This however is a text-book example if you need one, for how the international standard or law in organisations like the EU (not only the EU, but here it has tended to show up the most) is set and then member states have a degree of leeway in how they then put this into local law. There is usually a minimalist approach, but Poland somehow usually manages to show that it is well ahead of the curve by enacting something which is at the top end of how rigorous and bureaucratic it can be, with major penalties, with no real guidance as to how those penalties would be scaled and assessed, without making even logical exceptions (for instance, if the details already published in the KRS – Polish Companies House equivalent – are already public, up-to-date and accurate as a reflection of UBO the you’re exempt, but no, they didn’t do that. And they didn’t exempt even quoted companies which even Russia did when they enacted a version of UBO law which was seen as pretty strict back in 2015).
So this is a great example of how the Polish authorities ride roughshod over business people in order to flex the muscles of the public sector and the state over the private sector muggins who pay for them to do it. They know full well that the business world, which remains in fear and thrall as in the days of yore, will do as they are told, and so they don’t worry too much. There is a computer interface, you have to use that, and you must use your company representative who is entitled to represent you as per the KRS (at which point you say, well if you do look in the KRS then you know that the UBOs are there already, but the answer is “we know what is on the KRS but we don’t know if these are not just nominees, and anyway it was the EU who told us to do this so just do it”).
The matter will be a minor chore for the majority of Polish businesses, but not even all of them. The problem they may have is the interface and the fact that when it comes to signing you need and electronic signature in the form of an ePUAP or a qualified signature, and even though official representatives of Companies are supposed to have these already, in fact they have not all done so, and those who have done so are still not very fluent in their use as they need to use them maybe once or twice a year, so this becomes a bit like expecting someone who goes to Church at Passover and Yom Kippur for weddings and funerals only, say the Nicene Creed and the First Surah from memory and in the original languages when very few people even speak Nicene these days.
Then you get people like us auditors who are using these things most weeks now, but we cannot just go in and do it for you, because it’s: a) not allowed and b) rendered impossible anyway by the very nature of electronic signing. Now imagine how more complex this is going to be for a foreign business especially if the Board are all non-Polish speakers and there is no Polish-speaking general proxy on the KRS or nobody on the KRS who can represent the company has an official electronic signature. Moreover the file has to be in a specific XML format, you cannot just hand in paper or even a pdf. The rules about what constitutes beneficial interest and how you measure it for various business cases are in a series of FAQs which are untranslated or badly translated.
And oh, I forgot to mention, the penalty for failure to do this by the deadline is, at least theoretically, PLN 1 million.
So, this means in practice, even though I know that a lot of UK-owned and other foreign-owned companies in Poland will be fretting about this, neither I no any other advisor, can come to you and say “hey that’s fine just hand it all over and we’ll do that for you and here’s my bill which is all you need to handle”. What can be done then, meaningfully?
Well, folk like me, UK Chartered Accountants in Poland should be able to (and I definitely am able to) provide a CRBR Walk-Through Service with the following elements:
- Feasibility check
Talk to you beforehand to find out in your own language (I’m happy to do this in English, German, Russian, Polish and French) what your situation is regarding the representation, if the people have their PESEL or not, the ePUAP or qualified signature and make sure you are going to be able to make deadline without additional legal actions such as changes to the KRS. These might take a month or more if needed as there are several steps, and may even involve travel in this tough time, so there is no time to waste for that procedure if it’s needed now. If we identify that that’s needed you can take it to your usual company lawyer or I’ll get my own team on it, your choice. This stage may involve checking that you have a valid sig and remember your password to it. In no case will I ask for or see this password.
- Information gathering
Talk through the situation re what the Ultimate Beneficial Owner profile is in your Company and how to apply the rules, again in your language, from the list above. If it’s not a typical situation so that research is needed, again you wouldn’t want to leave that to the last minute. In most cases it isn’t, but if you have situations where there are complex groups and offshore structures it can be difficult. (By the way, don’t trouble me if your purpose is to actually do money laundering and get around the law and keep people secret. I have no interest on helping anyone who does this and will not do so, as stated elsewhere on this site. I don’t like reporting people as I do not like to think of myself as an arm of the state, but please do not even put me into that dilemma, just go and find someone desperate enough to assist you. However, as long as you do want to obey the spirit of this law and play fair, and are simply interested in knowing how to do so in a complex situation, then I am happy to involve myself).
- Prep the XML, then enter it with you talking through the process
Based on the info in 1 and 2, I can go in and prepare the XML file and send it to you, then we talk again and with share screen I show you how to add the XML file, and then go through the signature process if you have doubts about it. Then I explain about taking and keeping the file which proves you have done this and also check that the register now shows what we think it should given the information gathering in part 2.
- Concurrent health-check in KRS
While we are about it we can check that the filings in the KRS look in order and up-to-date and if not what needs to be done.
Depending on complexity, I would expect to be able to help you with that walk-through approach as per the above steps for between £200 and £500, depending on complexity, paid half in advance, half on completion. As I mentioned, you don’t have to be a UK or Irish or other Anglosphere business, but if you need the service and speak English, French, German, or Russian, then I can help make sure this is done and keep you safe from the rather draconian fine they are waving in the faces of decent business people.If you are interested in this walk-through service and would like to know more, please fill in the below form and submit it.