Czech Republic: Amendment to the Anti Money Laundering Act
Recently, the Ministry of Finance presented the Government with an amendment to the Act on Money Laundering. The main reason for the amendment is the application of the EU Directive, which was introduced on the recommendation of the G7 Financial Action Task Force in the fight against money laundering. This so-called 4th AML (Anti-Money Laundering) Directive must be transposed into national law by summer 2017.
The main innovation that the amendment brings is the establishment of a so-called data registry on the actual owners of legal entities registered in the public register, respectively, trust funds registered in the records of the trust funds. The true owner is understood to mean a natural entity who, in a given entity, exercises a true decisive influence. The amendment lists the criteria to determine who will be seen as the true owner. These records should contribute to greater transparency in the ownership structures of companies and other entities, and thereby prevent money laundering and the financing of terrorism.
The amendment significantly expands the circle of persons concerned by the obligations covered by the Act (i.e. the obligation to perform client identification, etc.). A new example will be the operators of gambling activities, where the current regulation imposes obligations only on casino operators. The circle of obligated persons should be expanded to include persons providing services associated with virtual currency (Bitcoin, etc.), as well as all persons who receive a payment in the amount of EUR 10,000 or more (the previous financial limit was EUR 15,000).
At the same time, the definition of politically exposed persons should be extended. They should include everyone performing an important public function, even at a regional level. The definition should newly impact on their relatives, associates, and actual owners of a same jointly controlled legal entity. Mandatory persons are obliged to continue to investigate whether the client or client’s actual owner is a politically exposed person, and perform an inspection in such a case. A new addition is the fact that a mandatory person would be obliged to perform a check even in the case of clients from unsafe third world countries.