Financial Crime World

Money Laundering Concerns Linger in Czech Republic: MONEYVAL Report Calls for More Investigations

In a new report published on Thursday, the Council of Europe’s anti-money laundering body, MONEYVAL, expressed concerns over persisting money laundering (ML) risks in the Czech Republic.

Key Findings:

  • ML risks primarily stem from tax crimes, fraud, corruption, phishing, and subvention frauds (MONEYVAL, 2020).
  • More investigative opportunities need to be pursued, particularly concerning serious third-party and stand-alone ML (MONEYVAL, 2020).
  • Awareness of ML and TF risks among financial institutions varies; banking institutions are more aware than other financial institutions (MONEYVAL, 2020).
  • Regulatory bodies face criticism over efficiency, attributed to limited resources (MONEYVAL, 2020).
  • Significant legislative improvements and progress in ML investigations commendable (MONEYVAL, 2020).

Risk Assessment

MONEYVAL’s extensive evaluation revealed concerns over ML and terrorist financing (TF) risks with a primary focus on:

  1. Tax crimes
  2. Fraud
  3. Corruption
  4. Phishing
  5. Subvention frauds

Adequate Understanding Amongst banks

  • Banking institutions maintain an adequate understanding of ML and TF risks (MONEYVAL, 2020).

Lower Awareness Amongst DNFBPs

  • However, awareness levels are lower among other financial institutions, including designated non-financial businesses and professions (DNFBPs) (MONEYVAL, 2020).

Regulatory Bodies and Resources

  • The Financial Analytical Unit and the National Bank, the primary regulators of the largest portion of the Czech financial sector, face criticism for the efficiency of their supervisory model (MONEYVAL, 2020).
  • Limited resources contribute to this issue (MONEYVAL, 2020).

Positive Developments

Despite these concerns, there have been positive developments, including:

  • Legislative improvements
  • A more robust approach to ML investigations

Convictions in Significant ML Cases

Though convictions have been secured in significant ML cases, more investigative efforts are required according to MONEYVAL (MONEYVAL, 2020).

Seizure and Confiscation

  • Significant strides have been made in the legislative and institutional framework on seizure and confiscation (MONEYVAL, 2020).
  • Law enforcement can now conduct financial investigations related to proceeds-generating offenses and recover substantial funds (MONEYVAL, 2020).

Financial Terrorism Concerns

Financial terrorism concerns emerged during recent financial investigations (MONEYVAL, 2020).

Accessibility of Information

Czech Commercial Register

  • The Czech Commercial Register is publicly accessible, but its quality and accuracy vary (MONEYVAL, 2020).

Trust and Beneficial Ownership Registers

  • Recently established Trust and Beneficial Ownership Registers are taking shape but are not yet fully populated (MONEYVAL, 2020).

International Cooperation

Czech authorities continue to be active in international cooperation, with successful instances of mutual legal assistance and spontaneous collaborations (MONEYVAL, 2020).

Next Steps

The Czech Republic is invited to submit a progress report by mid-2020, and MONEYVAL will undergo further examination under the enhanced follow-up procedure in 2021 (MONEYVAL, 2020).


Reference:
MONEYVAL, (2020). *Mutual evaluation follow-up report: Czech Republic: Moneyval recommendations*, [https://rm.coe.int/16809cbf64](https://rm.coe.int/16809cbf64) (Accessed on March 11, 2023).