Blog

An amendment to Act No. 253/2008 Coll., on Certain Measures against Money Laundering and Funding of Terrorism (the “AML”) came into force on 1 May 2024. Certain provisions will come into force only as of 1 January 2025, namely provisions related to loan and finance institutions.

As the shift in AML duties is significant, please find below a summary of major changes.

Obligated Persons:

• Obligated persons newly also include Internet lottery and bingo operators, insolvency and restructuring practitioners, and traders in precious metals or precious stones.
• Financial institution is newly defined as a person providing services related to company transformations, transfers of businesses, or acquisition of interest in a corporation.

Identification Data:

• ID data (ID number and type, state, and/or the authority that issued the ID, period of validity) are newly directly mandatory data.
• These data have to be sufficiently identified or the business relationship has to be terminated (within 12 months from the date when the amendment came into force).

Cash Payments:

• In addition to payments by precious metals, precious stones or another highly valued commodity, payments by a virtual asset, i.e. crypto currency, will newly be considered cash payments.

Notification of the Internal Principal System:

• Persons managing property in a way comparable to an investment fund’s management and persons providing services connected with virtual assets will newly be obliged to notify the Financial Analytical Office of the text of the internal principal system.

Remote Client Identification:

• The amendment has extended the possibility to remotely identify a client by proving the payment account also to accounts outside the EU and the EEA, unless maintained in a high-risk third country.

Not Implemented Client Check:

• If the Financial Analytical Office issued an instruction or if an inspection could put a suspicious deal’s investigation into risk, the obligated person will not carry out the inspection. The obligated person is obliged to deliver a notification of the inspection’s non-performance to the Financial Analytical Office in writing (in a materialised/ electronic form), and failure to deliver the notification is penalised up to CZK 1,000,000.

Penalties:

• The upper limit for fines for obligated persons in the event of failure to meet the duty of identifying a client has been increased to as much as CZK 10,000,000.
• The fine can newly be imposed on an individual who caused violation of the obligated person’s duty in the amount as a high as CZK 1,000,000.

As a consequence, the number of duties not only in identifying a client has significantly gone up for obligated persons. We therefore recommend carefully incorporating those changes in your internal AML guidelines. Please feel free to contact us with any questions you may have.

Lenka Kolmanová
kolmanova@clarksonhyde.cz