This website uses cookies so that we can provide you with the best user experience possible. Our Cookie Notice is part of our Privacy Policy and explains in detail how and why we use cookies. To take full advantage of our website, we recommend that you click on “Accept All”. You can change these settings at any time via the button "Update Cookie Preferences" in our Cookie Notice.
Technical cookies are required for the site to function properly, to be legally compliant and secure. Session cookies only last for the duration of your visit and are deleted from your device when you close your internet browser. Persistent cookies, however, remain and continue functioning on repeat visits.
CMS does not use any cookie based Analytics or tracking on our websites; see details here.
Personalisation cookies collect information about your website browsing habits and offer you a personalised user experience based on past visits, your location or browser settings. They also allow you to log in to personalised areas and to access third party tools that may be embedded in our website. Some functionality will not work if you don’t accept these cookies.
Federal Law No. 115-FZ “On Combating Money Laundering and the Financing of Terrorism” dated 7 August 2001 (the AML Law) and ancillary normative acts.
Yes, the 4th AML Directive was implemented into Czech law via Act No. 368/2016 Coll. which amends (i) the AML Act; (ii) the International Sanctions Act; (iii) Act No. 304/2013 Coll., on public registers of legal entities and individual persons; and other acts.
The 5th AML Directive is currently being implemented into two separate acts: (i) an amendment act which will amend the AML Act and Act No. 186/2016 Coll., on hazardous games; and (ii) a new act on the Ultimate Beneficial Owner Registry.
N/A
The Financial Analytics Office is the main AML/CTF supervisory authority. Other authorities authorised to monitor compliance with the key obligations under the AML Act in certain sectors include the Czech National Bank, the Ministry of Finance, and the Czech Inspection Authority.
The Federal Financial Monitoring Service (the FFMS) is the main AML/CTF supervisory authority that conducts financial intelligence investigations, collects data, and monitors transactions of controlled entities in accordance with the AML Law.
Other authorities monitor compliance with the AML Law as part of their competences, including the Central Bank of Russia (the CBR), the Federal Tax Service, the Federal Bailiff Service, and the Federal Customs Service.
There are almost 40 categories of reporting entities under the AML Act, including banks, financial institutions, operator of hazardous games, persons active in the real estate industry and intermediaries in the field, notaries, attorneys etc. In the Czech Republic, the scope of reporting entities under the AML Directives is extended also to include persons authorised to conduct business at cultural sites or with items of cultural value, persons authorised to conduct business with used goods or intermediaries in the field, national administrators of registries of permits and persons providing services connected with virtual currencies.
The KYC requirements in the Czech Republic follow the requirements of the 4th and 5th AML Directives and include the following minimum information:
To facilitate the obligations of the reporting entities, the AML Act provides a general obligation on commercial companies, trust funds, associations, public legal entities, foundations, and institutes to disclose their UBOs to the court which keeps the relevant register, e.g. commercial companies will register at the court maintaining the commercial register. Please note that the UBO registry is not publicly accessible.
The Reporting Entities are obliged to identify their clients and obtain information regarding their UBOs, as well as collect and maintain such information.
They must provide a regulating authority (at its request) with any information regarding their clients’ transactions and their UBOs, however there is no central register for such disclosure.
Yes, the legislation in various sectors, such as the banking sector, allows for the digital onboarding of customers, provided that the requirements for customer identification and customer verification under the AML Act are observed.
The AML Law provides for “simplified” identification of the client, which can be done, by sending the documents required for the client’s identification at the onboarding stage online.
Simplified identification can be undertaken by using the client’s account with the Unified System of the Identification and Authentication (maintained by Russian state authorities) or by using electronic signatures (as provided in more detail in the AML Law), without the need for the client’s physical attendance on the premises of the Reporting Entities .
However, the use of simplified identification is limited by the amount of the transaction, e.g. it can be used only for the provision of consumer loans up to RUB 15,000 (approx. EUR 200) and is available only for certain kinds of financial services, although the list of such services is regularly extended. In addition, simplified identification cannot be relied on if a transaction has the characteristics of a suspicious transaction.
The main obligations of the reporting entities under the AML Act follow the 4th and 5th AML Directives. These include customer due diligence (CDD), the collection of information and documents and their storage, an assessment of the risk of money laundering and terrorist financing, and the disclosure of information on suspicious operations, transactions and customers. The Czech AML Act further specifies requirements for a system of internal principles, risk assessment, staff training and information obligation.
Yes, the first round of the National Risk Assessment for Money Laundering and Terrorist Financing (the “NRA”) was finalised and approved on 9 January 2017 by the Government of the Czech Republic (the idea is to repeat the NRA regularly).
The NRA report provides an assessment of the role of each public authority entrusted with the task of enforcing the AML and individual controlling mechanisms.
The NRA report provides a strategy and useful measures for monitoring and limiting the risks of money laundering and terrorist financing regarding the following bodies:
The main identified risks include:
In addition to the requirements set out in the AML Law, the Regulated Entities must develop and implement their own internal risk assessment programs, based on the FFMS Recommendations for Development of Criteria for Identification and Determination of Unusual Transactions adopted on 8 May 2009 (as amended). In addition, several CBR regulations establish requirements for internal control and client identification procedures for credit institutions.
In August 2011, the FFMS issued a regulation establishing a list of transactions that are considered to represent significant risks of money laundering. There are 27 types of activities on the list, including transactions made in cash, international economic activities, gambling, tourist activity, certain real estate transactions, etc.
The AML Act prescribes a number of key obligations that must be respected to the maximum extent by all reporting persons and all individuals and legal entities:
Measures adopted in response to a breach of these obligations will depend on the nature of the breach, e.g. an assessment of whether the nature of the breach amounts to civil or criminal liability.
The main CTF measures that can be implemented under the AML Law include the mandatory control of certain transactions, freezing funds and other assets, and suspending or refusing to perform suspicious operations.
The Reporting Entities are obliged to inform the FFMS of any operation which is subject to compulsory control. In addition, they can suspend an operation and should inform the FFMS if they have information indicating that any of the parties to the contemplated operation may be participating in terrorist activities, or if it is explicitly or implicitly controlled by such a person or organisation.
Money laundering and terrorist financing are criminalised under the Czech Criminal Code as standalone crimes. The legalisation of the proceeds of crime is subject to imprisonment up to ten years. Terrorist financing is subject to imprisonment up to 15 years. Further sanctions, such as forfeiture of property etc., can be imposed.
Czech law recognises corporate criminal liability, therefore companies may also be criminally liable for money laundering and terrorist financing. There is a wide range of sanctions which can be imposed on legal entities, e.g. dissolution of the company, forfeiture of property, monetary penalty, and publishing the judgment.
The AML Act provides a range of sanctions for non-compliance with the key obligations and sets out individual fines and penalties depending on the type of infringement, the type of infringer (an individual or entity or type of entity, banks, insurers, etc.).
The Russian Criminal Code provides for criminal liability for breaches of the legislation on anti-money laundering, including penalties and imprisonment for a Reporting Entity’s management.
The CBR may also take preventative and enforcement measures against a Regulated Entity involved in transactions which are contrary to the AML Law. These measures include:
CBR enforcement measures may also include the imposition of a penalty and the withdrawal of the relevant licence from a Regulated Entity.
Write us a message and we will get in contact.
Thank you for contacting us. We will get back to you soon.
Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. We do this to optimise the mix of channels to provide you with our content. Details concerning the tools in use are in our privacy policy.