{"id":3965,"date":"2024-01-25T13:34:50","date_gmt":"2024-01-25T13:34:50","guid":{"rendered":"https:\/\/sawaryn.com\/?p=3965"},"modified":"2026-10-23T08:30:55","modified_gmt":"2026-10-23T08:30:55","slug":"what-is-the-kyc-procedure-know-your-customer-aml","status":"publish","type":"post","link":"https:\/\/sawaryn.com\/en\/publikacje\/what-is-the-kyc-procedure-know-your-customer-aml\/","title":{"rendered":"What Is the KYC Procedure? Know Your Customer in AML"},"content":{"rendered":"<p>If your company is subject to anti-money laundering (AML) rules, the KYC procedure is one of the obligations you must fulfil. KYC, or <strong>Know Your Customer<\/strong>, is a set of measures for establishing and verifying customers\u2019 identities to prevent money laundering. This obligation goes beyond simply collecting personal data. Below are the specific steps you need to take.<\/p>\n<h2>Why carry out the KYC procedure?<\/h2>\n<p>The KYC procedure is part of the system for preventing money laundering and terrorist financing (AML).<\/p>\n<p>People involved in money laundering most often try to hide their identity. For example, they may:<\/p>\n<ul>\n<li>set up a company in the name of a so-called nominee, a person acting on someone else\u2019s behalf,<\/li>\n<li>operate through chains of companies whose shareholders are other companies,<\/li>\n<li>use foundations or entities registered in tax havens.<\/li>\n<\/ul>\n<p>There is one aim: to make it as difficult as possible to establish where the money came from and who owns it.<\/p>\n<p>By applying the KYC procedure, asking questions and verifying data, you can quickly spot that something is wrong: a potential customer may not be who they claim to be, or someone else may be behind the business.<\/p>\n<p><strong>Risk of not having a KYC procedure:<\/strong> even unknowingly participating in transactions involving illegal money can have serious legal consequences. By applying KYC, you can respond early to a suspicious situation or at least demonstrate that you performed all duties required by law.<\/p>\n<p>The KYC procedure is the most important set of measures in the entire AML process. Watch our <a href=\"https:\/\/www.youtube.com\/watch?v=YPQvleY5p2o&amp;t=19s\" target=\"_blank\" rel=\"noopener\"><strong>video<\/strong><\/a>, in which I explain how to apply the AML procedure in practice.<\/p>\n<p>The KYC procedure is one component of the so-called <strong>Customer Due Diligence Measures<\/strong>, meaning all measures that obliged entities must take under AML rules.<\/p>\n<h2>Who is required to carry out the KYC procedure?<\/h2>\n<p>Today, it is advisable for <strong>every business owner<\/strong> to carry out this procedure, even on a small scale. This helps you to:<\/p>\n<ul>\n<li>check whether a person is subject to sanctions, an obligation that applies to every business owner,<\/li>\n<li>collect customer data, which makes settlements easier and may serve marketing purposes when GDPR requirements are met.<\/li>\n<\/ul>\n<p>Under the Act on Counteracting Money Laundering and Terrorist Financing, all <a href=\"https:\/\/sawaryn.com\/en\/?p=3962\"><strong>obliged entities<\/strong><\/a> must apply KYC, including:<\/p>\n<ol>\n<li>Currency exchange businesses, including <a href=\"https:\/\/sawaryn.com\/en\/publikacje\/virtual-currency-register-poland\/\"><strong>virtual currency exchange businesses<\/strong><\/a><\/li>\n<li>Notaries<\/li>\n<li>Advocates, attorneys-at-law and tax advisers<\/li>\n<li>Accountants and accounting firms<\/li>\n<li>Virtual offices<\/li>\n<li>Real estate brokers<\/li>\n<li>Businesses operating games of chance<\/li>\n<li>Businesses, foundations and associations that make or receive cash payments worth EUR 10,000 or more<\/li>\n<li>Antique shops, art galleries and auction houses<\/li>\n<li>Loan institutions<\/li>\n<li>Pawnshops<\/li>\n<li>Investment funds, alternative investment companies and investment fund companies<\/li>\n<li>Banks and financial institutions<\/li>\n<li>Insurance intermediaries<\/li>\n<\/ol>\n<p><strong>If you operate in any of the industries listed above, you must apply AML rules and carry out the KYC procedure.<\/strong><\/p>\n<h2>What does the KYC procedure involve? Four required steps<\/h2>\n<h3>1. Collecting customer data<\/h3>\n<p>For <strong>individuals<\/strong>, collect, among other things, their first and last name, address and PESEL number. For <strong>entities<\/strong>, collect the name and registered office, NIP tax identification number and list of beneficial owners. Information about PEP status is also important. Read more in our <a href=\"https:\/\/sawaryn.com\/en\/publikacje\/aml-customer-risk-assessment-criteria\/\"><strong>article on customer risk assessment criteria<\/strong><\/a>.<\/p>\n<p>You must collect this data yourself, for example by asking the customer to provide it. The SiP AML Program includes online forms that let you enter and save all the required information.<\/p>\n<h3>2. Verifying customer data<\/h3>\n<p>Collecting data is not enough: you must verify that it is accurate. Verification methods include:<\/p>\n<ul>\n<li>checking an identity card or passport,<\/li>\n<li>making a verification transfer from the customer\u2019s personal bank account,<\/li>\n<li>other methods discussed in our <a href=\"https:\/\/www.youtube.com\/watch?v=YPQvleY5p2o&amp;t=19s\" target=\"_blank\" rel=\"noopener\"><strong>video about Customer Due Diligence Measures<\/strong><\/a>.<\/li>\n<\/ul>\n<h3>3. Archiving and retaining data<\/h3>\n<p>You must properly archive and retain the data and documents you collect. The reason is practical: during an inspection, you must be able to show that you fulfilled all your obligations.<\/p>\n<h3>4. Updating data<\/h3>\n<p>Collecting data once is not enough. You must ensure that the data remains up to date. If you learn or suspect that something has changed, for example the company\u2019s details, repeat the KYC procedure.<\/p>\n<h2>What else is included in the KYC procedure?<\/h2>\n<p>The four steps above are the basic scope of KYC. Carry them out together with the other Customer Due Diligence Measures:<\/p>\n<h3>Risk analysis<\/h3>\n<p>Assess the risk of money laundering or terrorist financing associated with working with a particular entity. Once you have collected information about a specific individual or company, you can carry out this assessment.<\/p>\n<p>Use our online <strong><a href=\"https:\/\/sawaryn.com\/en\/publikacje\/how-to-assess-customer-risk-aml-procedure\/\">\u201crisk assessment assistant\u201d form<\/a><\/strong> to quickly check the level of risk involved in working with an individual or company.<\/p>\n<h3>Transaction monitoring<\/h3>\n<p>Monitor the transactions of the individual or company. This obligation raises the most questions: how can you monitor a customer\u2019s transactions without asking about confidential financial data?<\/p>\n<p>Fortunately, there are plenty of options. Learn more about correctly monitoring a customer\u2019s business transactions in our video on applying Customer Due Diligence Measures.<\/p>\n<h2>What else should you know about the KYC procedure?<\/h2>\n<p>The list of KYC activities depends on what you establish at each stage. In justified cases, you will need more information to analyse the situation properly. KYC is a dynamic process: you adjust the scope of your measures to the results of each step.<\/p>\n<h2>Summary: what to establish as part of KYC<\/h2>\n<p>When collecting data as part of the KYC procedure, always establish:<\/p>\n<ul>\n<li><strong>The customer\u2019s personal data<\/strong> or the data of people representing the entity<\/li>\n<li><strong>Whether the information provided is accurate<\/strong>: verify it using a document or a transfer<\/li>\n<li><strong>The purpose of the transaction<\/strong>: what product or service the customer expects and why<\/li>\n<li><strong>The counterparty\u2019s business profile<\/strong>: what the company does and what its previous business activity has been<\/li>\n<\/ul>\n<p>You can obtain this information by asking questions in the context of your cooperation and preparing to provide services.<\/p>\n<p><strong>In specific circumstances<\/strong>, also ask about the origin of the funds the customer will use to perform the contract, for example to pay your company.<\/p>\n<h2>How can you implement the SiP AML Program in your company?<\/h2>\n<p><a href=\"https:\/\/sawaryn.com\/publikacje\/jak-wdrozyc-w-firmie-procedury-aml\/\"><strong>Implementing AML requirements<\/strong><\/a> takes time and knowledge of the rules. Our Law Firm has developed the <strong>SiP AML Program<\/strong>, an online tool that lets you fulfil your obligations under the AML Act independently and efficiently.<\/p>\n<p>As part of the SiP AML Program, you receive:<\/p>\n<ul>\n<li><strong>Online forms<\/strong>: editable AML documents to complete<\/li>\n<li><strong>An AML guide<\/strong>: an explanation of the requirements and how to fulfil them, step by step<\/li>\n<li><strong>A Risk Assessment Form<\/strong>: a tool for quickly assessing customer-related risk<\/li>\n<li><strong>Checklists<\/strong>: a way to verify that all legally required activities have been completed<\/li>\n<li><strong>Video materials<\/strong>: support and explanations about AML procedures<\/li>\n<\/ul>\n<p>Find out how your company can join the SiP AML Program and operate in accordance with the rules.<\/p>\n<hr \/>\n<p><strong>Do you have questions about implementing AML in your company?<\/strong><\/p>\n<p>Are you unsure whether AML rules apply to your business? Write to us. We can help you establish the scope of your obligations, implement procedures and limit AML-related risk.<\/p>\n<h2>Frequently asked questions<\/h2>\n<p><strong>What is the KYC procedure, and why should a company use it?<\/strong><br \/>\nKYC (Know Your Customer) is a set of measures for establishing and verifying customers\u2019 identities to prevent money laundering. By applying KYC, you can quickly spot that a potential customer may not be who they claim to be, or that someone else may be behind the business. Even if you do not identify any irregularity, you can show a supervisory authority that you performed all duties required by AML rules. Without a KYC procedure, you risk unknowingly participating in transactions involving illegal money and facing serious legal consequences.<\/p>\n<p><strong>Who is required to apply the KYC procedure under AML rules?<\/strong><br \/>\nAll obliged entities under the Act on Counteracting Money Laundering and Terrorist Financing must apply the KYC procedure. These include currency exchange businesses, including virtual currency exchanges; notaries; advocates, attorneys-at-law and tax advisers; accountants and accounting firms; virtual offices; real estate brokers; loan institutions; pawnshops; banks; investment funds; insurance intermediaries; and businesses accepting cash payments worth EUR 10,000 or more. If you operate in any of these industries, you must apply KYC.<\/p>\n<p><strong>How do you carry out the KYC procedure in a company, step by step?<\/strong><br \/>\nThe KYC procedure has four required steps: collect customer data, such as a first name, last name and PESEL number, or, for an entity, its name, registered office, NIP number and beneficial owners; verify that the information is accurate, for example using an identity document or verification transfer; archive and retain the data collected; and keep it up to date. Carry out these steps alongside the other Customer Due Diligence Measures: customer risk analysis and transaction monitoring.<\/p>\n<p><strong>What information must be collected and verified as part of the KYC procedure?<\/strong><br \/>\nFor individuals, collect, among other things, their first and last name, address and PESEL number. For entities, collect the name, registered office, NIP number and list of beneficial owners, together with information about PEP status. Verify the information using an identity card or passport, or a verification transfer from the customer\u2019s personal bank account. Also establish the purpose of the transaction and the counterparty\u2019s business profile. In specific circumstances, ask about the origin of the funds intended to perform the contract.<\/p>\n<p><strong>Does the KYC procedure end once customer data has been collected, or must it also be updated and archived?<\/strong><br \/>\nCollecting data once is not enough. You must archive and retain documents in case of an inspection and ensure that the data remains up to date. If you learn or suspect that something has changed, for example the company\u2019s details, repeat the KYC procedure. KYC is a dynamic process, and you adjust its scope to the results of each step.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn what the KYC procedure involves, which businesses must apply it under Polish AML rules, and how to collect, verify, store and update customer data.<\/p>\n","protected":false},"author":10,"featured_media":1891,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","sip_alt_url":"","sip_en_pl_url":"","sip_pair_uuid":"","sip_pair_state":""},"categories":[1576],"tags":[1611,1609,1607],"specialization":[1206],"practice_area":[],"class_list":["post-3965","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-anti-money-laundering","tag-aml-en","tag-customer-due-diligence","tag-kyc-en","specialization-aml"],"acf":[],"_links":{"self":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/comments?post=3965"}],"version-history":[{"count":1,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3965\/revisions"}],"predecessor-version":[{"id":4098,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3965\/revisions\/4098"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/media\/1891"}],"wp:attachment":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/media?parent=3965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/categories?post=3965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/tags?post=3965"},{"taxonomy":"specialization","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/specialization?post=3965"},{"taxonomy":"practice_area","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/practice_area?post=3965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}