Financial Crime World

Money Laundering Crackdown in the Czech Republic: FAU’s Battle Against Criminal Finances

The Finance and Analysis Unit (FAU) of the Czech Republic’s Ministry of Finance plays a crucial role in preventing money laundering and terrorist financing in the country. below are the key aspects of FAU’s functions and recent developments.

Enforcing Anti-Money Laundering Regulations

The FAU is responsible for enforcing the Czech Republic’s AML regulations, which include Act No. 253/2008 Coll., on Selected Measures against the Legitimization of Proceeds of Crime and Financing of Terrorism. With new EU regulations like the 4th EU Directive (AMLD), these efforts focus on harmonizing EU laws with international standards set by the Financial Action Task Force.

Supervision Division and Obliged Entities

FAU’s Supervision Division conducts targeted inspections of reporting entities suspected of non-compliance, and obliged entities must keep transaction records and client data for at least 10 years. Failure to comply with AML/CFT regulations can result in severe fines.

International Cooperation

Through organizations such as the Egmont Group, Moneyval, EU structures, and the OECD, the FAU aims for uniform responses to foreign requests and effective international cooperation.

Methodical Guide and Prohibited Transactions

The FAU issues guidelines to help reporting entities comply with evolving regulations. The unit also prohibits anonymous transactions and enforces customer due diligence regardless of transaction limits.

Role of Customs Administration

The Czech Customs Administration aids in detecting money laundering cases by detaining undeclared cash and opening administrative proceedings. Relevant information is then forwarded to the FAU.

Penal Code and Criminal Liability

The Penal Code outlines various criminal offenses related to money laundering, corruption, and economic crimes. The corporate criminal liability law, effective since 2012, expands the scope of criminal responsibility.

Transformation and Expansion

In an effort to better address the increased workload and combat money laundering more effectively, the FAU aims to change its status from an internal administrative body to an independent office within the Ministry of Finance. The proposed change is expected to cost between 10 to 24 million CZK, primarily covering additional posts and equipment for the new officers.

Similarly, the Police of the Czech Republic plans to enhance its money laundering investigation capabilities through international cooperation and the use of supranational tools and networks.

Key Points

  • FAU enforces Czech AML regulations and collaborates with international organizations.
  • Reporting entities undergo targeted inspections by FAU’s Supervision Division.
  • Obliged entities keep transaction records and client data for 10 years.
  • New EU regulations align EU laws with international anti-money laundering standards.
  • Undisclosed cash detained by Customs Administration can lead to administrative proceedings, with information sent to FAU.
  • Expanded criminal responsibility under the Penal Code since 2012.
  • FAU seeks transformation to improve capabilities and combat money laundering and terrorist financing.

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