Expected AML Changes

(Updated 9/2016)

In 9/2016, the Czech Parliament passed an extensive amendment to Act No. 253/2008 Sb., regulating selected measures against legitimisation of proceeds of crime and financing of terrorism and amending certain related acts. Anticipated to take effect in 1/2017, the amendment incorporates the changes introduced by EU law.

One of these changes includes a new concept – AML risk assessment – under which the obliged entities are to identify and assess the potential AML risks pertaining to their business activities and adopt respective measures (if any).

In addition, the amendment introduces adjusted rules for client identification and control and a significantly modified definition of a politically exposed person (PEP); newly, PEPs include persons entrusted with prominent public functions domestically or abroad and regional PEPs. Under the amended act, the AML/CFT activities will be monitored by the newly established Financial Analytical Unit (FAU) taking over the supervisory function from the existing unit operated by the Czech Ministry of Finance; in result of which the independence of FAU as the national financial intelligence unit will be strengthened although the unit will not be created as a new central state administration body but rather as a subordinate unit of the Ministry of Finance.

Considering the changes to legislation governing the public registers of legal entities and private individuals, the amendment further introduces a register of beneficial owners. Effective from 1/2018, this register, however, will not be a public register but rather would be accessible by the public bodies and obliged entities.