Poland: Counteracting Money Laundering in Central Europe
| Date | 01 March 2000 |
| Published date | 01 March 2000 |
| DOI | https://doi.org/10.1108/eb027265 |
| Pages | 70-77 |
| Author | Emil W. Plywaczewski |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 4 No. 1
Poland:
Counteracting Money Laundering
in Central Europe
Emil W. Plywaczewski
Money laundering is a major problem related to
organised crime and especially to its transnational
manifestations. Organised crime, which is associated
with a continuous inflow of enormous amounts of
money, creates the problem of protecting and
hiding the money while at the same time taking
every precaution possible. Members of organised
criminal groups arc therefore forced to conduct all
kinds of operations of acquisition or transfer of
legal rights whose final stage is the ultimate integra-
tion of income deriving from illegal sources. Such
behaviour, called 'money laundering', constitutes
the 'roots' of organised crime; in other words, it is
the fundamental basis for the existence of organised
crime. That is why, as part of various international
initiatives aimed at preventing and counteracting
organised crime, particular attention is paid to the
issue of trying to limit the scope of money launder-
ing.1 It is worth adding here that the phenomenon
is also associated with crimes (especially in the eco-
nomic and financial area) that do not necessarily
have to have an organised nature.
Money laundering is a relatively recent phenom-
enon in Poland, which should not be surprising to
anyone. The reason is that under the economic
system in force until the end of the 1980s, private
individuals had practically no opportunity for under-
taking this kind of action. The state's monopoly in
the banking and economic market, as well as the
very high effectiveness of the tax and treasury appa-
ratus,
have both contributed to the fact that under
the previous type of political and economic system,
the state itself was the only actor capable of launder-
ing 'dirty money'. In the extremely rare instances
where a private individual did something like it, he
or she was apprehended and brought to justice very
quickly.
A completely new situation was created at the end
of the 1980s. It has been very advantageous from the
standpoint of persons who have 'dirty cash' (both
Polish nationals and foreigners). At that time, there
was a liberalisation of foreign currency laws which
led to the establishment of foreign currency exchange
units in 1989. Since then, it has been possible to
channel income deriving from illegal sources
through the exchange units, followed by depositing
the money in foreign currency bank accounts, from
where it can be transferred abroad without any
problems, or used for any legal domestic activity.
Additionally, a restructuring of political and eco-
nomic agencies began, which was coupled with the
process of privatisation. Money laundering thus
became the pathological by-product of this
process.
In Poland, in connection with the overall political,
social and economic transformations since 1989, and
the accompanying dramatic changes facilitating the
development of
a
market economy, legal regulations
pertaining to economic activity were quickly adapted
to the changing socio-economic conditions. But this
process was not accompanied by an introduction
into criminal legislation of the appropriate crime
types which could then be the basis for prosecuting
perpetrators of new kinds and forms of crime.
That is why Poland became a kind of tax haven, or
a haven country generally, for organised crime and
the dirty money that organised criminals need to
launder.
Among the rationales for including Poland among
the 48 other countries that meet the above criteria are
the following:
— liberal laws on registration of companies,
including foreign companies;
— lack of taxation on, or low taxes from, foreign
companies;
— banking secrecy and industrial secrecy laws,
which protect the taxpayer and his or her capital
transactions;
— lack of punishment or very minor punishment for
dealing in foreign currency;
— easy transportation of people and merchandise;
— Poland's location on the so-called drug routes;
— the relatively stable political climate in Poland;
— easy access to professional and financial advice, as
well as the popularity of cash transactions and
foreign currency transfers which do not involve
banks at all.
Journal of Money Laundering Control
Vol. 4, No. 1,2000, pp. 70-77
© Henry Stewart Publications
ISSN 1368-5201
Page 70
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