Czech Republic Tightens Anti-Money Laundering Regulations: What You Need to Know

An amendment to the anti-money laundering law (Law No. 253/2008 Sb.) was enforced in the Czech Republic at the start of May, introducing new obligations for persons providing services related to virtual assets. Such persons also include those who manage assets through investment funds.

What new obligations will arise with the amendment to the Anti-Money Laundering Law?

All of them are now required to notify the Financial Analysis Authority (FAÚ) of the rules of their internal policy system via the mailbox within 30 days of their adoption. 

Due to the amendment to the law, it is also necessary to send the current content of the system of internal regulations to the FAÚ by May 31, 2024. 

360WEDO can advise you on this issue and prepare all the necessary documents to submit a notification to FAÚ.

What do you need to know about the Czech anti-money laundering law?

The Anti-Money Laundering Act, also known as AML, helps identify the beneficial owners of companies and investigate the origin of assets or suspicious financial transactions.

In particular, the law imposes customer verification obligations on those business entities that may be involved in transactions used for money laundering or terrorist financing. This applies, for example, to credit institutions, cryptocurrency companies, real estate agencies, auditors, and trust fund managers.

The details of the amended law are as follows:

On April 30, 2024, an amendment to the Law on Certain Measures Against Money Laundering and the Financing of Terrorism (AML) was published in the Collection of Laws of the Czech Republic, which came into force the very next day, i.e., May 1, 2024, Certain provisions relating to credit and financial institutions will come into force on January 1, 2025.

The amendment aims to tighten the rules against money laundering. In particular, the amendment will expand the range of organizations that will check their clients for possible money laundering.

Under the legal amendment, what other parties will be responsible for checking on clients?

Under the government amendment, insolvency practitioners and online lottery operators will also be required to screen customers. The amendment will also include precious metals traders.

The draft also introduces the possibility of not checking a client if there is a risk that such checking could alert the client to possible intervention by the Financial Analysis Authority  (FAÚ). However, if verification is not carried out, entities covered by the law will be required to immediately alert the FAÚ of suspicious transactions. The Ministry of Finance noted in the bill’s explanatory note that it anticipates using this provision only in exceptional cases.Given the scope and significance of these amendments, we recommend that organizations covered by this legislation take reasonable care to implement the new requirements into existing processes and systems. You can contact us for help and advice.