The transparency register in the 4th AML directive in the Czech Republic

The current legal basis of the Czech Transparency Register is Act No. 368/2016 Coll., which implements the Directive and amends (i) Act No. 253/2008 Coll., on selected measures against legitimisation of the proceeds of crime and financing of terrorism, (ii) Act No. 304/2013 Coll. on public registers of legal entities and natural persons and (iii) some further Acts.

The Directive is to be implemented in Czech legislation by a new Act on the Register of Ultimate Beneficial Owners ("ARUBO") as well as a separate Act to amend various other Acts. Both Acts are being discussed in Parliament. They are expected to become effective as of December 2020.

Yes.

Under the ARUBO, each UBO and each shareholder in the line between such UBO and the legal entity shall be obliged to provide information and all support necessary for the legal entity to satisfy its obligation to keep the information in the Register of UBOs ("Register") up to date.

Yes.

Under the ARUBO, each legal entity is obliged to collect the required information on its UBOs and to keep the information in the Register complete, correct and up to date.

The legal entity.

5. Are there exemptions to the filing obligation?

Yes.

The ARUBO provides a list of legal entities with no UBOs due to their legal nature.

6. What is the due date for the initial filing? Is there an obligation to update the filing?

The ARUBO is expected to become effective as of May/June 2021.

Under the current draft of the ARUBO, legal entities are required to register relevant information in the Register without undue delay when the ARUBO comes into effect.

7. What are the sanctions in case of a breach of the transparency obligation?

In the event that a UBO is not registered in the Register, the legal entity cannot distribute any benefits to the UBO itself or to any legal entity with such UBO.

The legal entity cannot distribute any share in its profits to any legal entity with respect to which no UBO is registered in the Register.

In the event that any share in profits or any equity distribution is not paid by the legal entity by the end of the financial year in which it was approved for distribution, the entitlement shall cease to exist automatically by operation of law.

No UBO can vote, directly or indirectly by anyone acting on its account, in shareholders' meetings.

The legal entity, its shareholders and UBOs may be subject to fines of up to CZK 500,000 (approx. EUR 20,000) each in certain cases of their non-compliance.

8. Is the Transparency Register established as a separate register or part of an existing one?

The ARUBO establishes the Register as a new public register maintained by the relevant district court. The Register is intended to fully replace the current non-public register of similar name maintained by the district courts. Information from the current register will be automatically migrated to the Register when the ARUBO comes into effect. Each individual registered in the commercial register as the shareholder of a limited liability company who holds more than a 25% shareholding will be automatically registered in the Register.

In addition, any individual who is registered as a UBO of a legal entity which is a shareholder of a limited liability company with a more than 25% shareholding will be automatically registered in the Register.

9. Notable amendments (including through the Directive)

N/A