Czech Republic Boosts Efforts Against Money Laundering and Terrorist Financing

The Czech Republic has taken substantial steps to combat money laundering (ML) and terrorist financing (TF), with authorities engaging in cooperative information sharing and implementing measures to mitigate risks.

National Risk Assessment

According to a recent report, the country’s ML/FT National Risk Assessment identified various forms of tax crimes, corruption, public procurement fraud, and subvention fraud as the most severe proceeds-generating offences. As a result, authorities have focused on tackling these areas through improved information sharing and joint investigative teams.

Banking Sector

The Czech banking sector has seen significant changes, with 93.1% of assets controlled by foreign entities from EU Member States. To address ML/FT risks in this sector, financial institutions are taking their own risk mitigation measures and reporting suspicious transactions.

Strengthened AML/CFT Framework

The country’s AML/CFT framework has been strengthened through amendments to the AML/CFT Law, which entered into force on January 1, 2017. These changes require authorities to conduct national risk assessments and take measures to mitigate ML/FT risks. The Criminal Code was also amended in February 2017 to include a standalone provision on financing of terrorism.

Transparency Measures

To address complex corporate structures, the Register on Beneficial Owners and the Central Register of Bank Accounts were established on January 1, 2018, improving transparency and providing quicker access to bank account information.

International Cooperation

The Czech authorities have achieved a substantial level of effectiveness in international cooperation, confiscation of proceeds, and FT investigations and prosecutions. However, moderate results have been seen in other areas covered by the FATF standards.

National Risk Assessment and Strategy

The National Risk Assessment was approved by the Government in January 2017 and sets specific mitigating measures to address identified risks. A national AML/CFT strategy is also being formulated to prevent and mitigate ML/FT risks.

Conclusion

Overall, the Czech Republic has made significant progress in combating ML and TF, with authorities working together to share information and take action against these threats.