Poland

AFTER THE COLLAPSE of the Soviet Union, Poland moved with alacrity to establish a marketoriented economy. The transition was problematic. While elected officials were instituting new legal frameworks for business, including commercial codes, and tort, civil and contract law, white collar and organized criminal gangs in Poland quickly garnered significant profits through a wide array of illicit activities.

Like other former Soviet Union-dominated communist countries throughout Eastern Europe, Polish regulators and law enforcement agencies were ill-equipped to differentiate between legitimate and illegal profit-seeking activities, especially in an era where legal and regulatory standards were slowly evolving. As a result, white-collar and organized crime flourished in Poland throughout the 1990s, and efforts to combat criminal activities were sporadic and ineffectual.

Despite increased efforts to combat criminal activity, Poland remains a major transit point for narcotics trafficking to Western Europe. Criminal gangs also routinely raise illicit proceeds through auto theft, extortion and counterfeiting schemes, and securities fraud. Polish criminal networks are also linked to the smuggling of alcohol, tobacco, fuel, and bulk commodities, especially coal and metallurgical products. According to Polish government estimates, organized crime activity generates criminal proceeds in the range of $1.5 billion to $3 billion annually. This money is laundered through[Page 615] Polish banks, currency exchange businesses, and casinos. Although Poland is not the leading jurisdiction of choice to launder proceeds for major criminal organizations from Russia, and Ukraine, the weak regulatory environment during most of the 1990s also enabled organized criminal gangs from neighboring states to transfer funds through Polish financial institutions to offshore financial centers.

Poland also suffers from widespread white-collar crime. The large degree of white-collar crime is linked to historical factors, especially an entrenched pattern of bribery, originating during the Soviet era, that remains an integral part of the political and economic process, and an immense civil servant class that makes governmental processes obscure and impede transparency. White-collar crime is also facilitated by elite cronyism and clan-like connections in the Polish business community. Consequently, Poland is routinely targeted by Polish media groups, non-governmental organizations, and international agencies, including the World Bank Group, which issue reports highlighting the link between white-collar criminals and government officials in the judiciary, law enforcement, and security services.

The proceeds of white-collar and organized crime are routinely laundered through Polish financial institutions. Launderers use Polish financial institutions to transfer funds to Western European states that are in close proximity to Poland. The Polish economy, large by regional standards, offers many avenues to launder illicit proceeds through its correspondingly large gray economy, promoted by a complex tax regime. Moreover, as a transit state between the European Union and the former Soviet Union, with a port on the Baltic, Poland has attracted organized crime groups from Western Europe and the Russian Federation. Funds are placed in banks, insurance companies, currency exchange shops, real estate, and short-term bonds. Although some of the proceeds of crime almost certainly leave the country, illicit profits are routinely invested in legal businesses, such as hotels, restaurants, and gambling parlors.

Since the mid-1990s, efforts to combat white-collar collar and organized crime in Poland have improved substantially. To limit the passage of illicit funds from organized criminal and white-collar crime through domestic banking and non-banking financial institutions, Poland initiated a rudimentary anti-money laundering regime with the passage of the 1992 banking regulation, Resolution Number 16, which required Polish banks to report suspicious transactions. Additional measures were adopted through the 1990s. In 2000, the Sejm, the Polish Parliament, instituted a comprehensive antimoney laundering policy with the adoption of the Law on Counteracting the Introduction of Funds From Illegal or Unrevealed Sources Into Financial Turnover.

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