Financial Crime World

Czech Republic Strengthens Anti-Money Laundering and Counter-Terrorist Financing Measures: A MONEYVAL Report

The Czech Republic has taken substantial steps to enhance its anti-money laundering (AML) and counter-terrorist financing (CTF) measures as outlined in the latest report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL).

Key Findings

  • National Risk Assessment: The Czech Republic’s National Risk Assessment (NRA) is transparent and realistic, yet additional analysis is required for specific ML/CTF risks like foreign proceeds, fictitious entrepreneurships, and organized crime risks.
  • Financial Intelligence Unit (FIU): The FIU shares sector-specific versions of the NRA with reporting entities and structures the general risk assessment. The integration of the National Security Audit (NSA) analysis with the NRA needs improvement.
  • Law Enforcement Agencies (LEAs): LEAs utilize financial intelligence and other information to initiate ML/CTF investigations. While the focus is on predicate offenses and linked ML, limited feedback is provided to the FIU, constraining its ability to assess the quality of its analysis and prioritize its actions.

Areas for Improvement

  • Proactive Investigations: Enhancing proactive investigations by Czech law enforcement is essential to combating ML and CTF.
  • International Cooperation: Strengthening international cooperation and mutual legal assistance in freezing and confiscation of assets is crucial.
  • Regulatory and Supervisory Framework: Fortifying the regulatory and supervisory framework for designated non-financial businesses and professions (DNFBPs) is necessary.
  • Legislative and Institutional Framework: Improving the legislative and institutional framework to facilitate effective implementation of UN targeted financial sanctions is essential.

Conclusion

The report acknowledges the progress made by the Czech Republic in addressing ML/CTF risks but underscores the need for ongoing efforts to effectively mitigate threats and establish a truly comprehensive and effective AML/CTF framework.

Overall, the MONEYVAL report underscores the significant strides made by the Czech Republic in strengthening its AML/CTF measures while highlighting areas for improvement to address lingering vulnerabilities and risks.