Who is legally obliged to comply with the rules on preventing money laundering and terrorist financing?
In the Czech Republic, Act No. 253/2008 Coll. (the “AML Act”) establishes measures to prevent the laundering of proceeds of crime and the financing of terrorism. One of the key provisions of this Act is § 2, which lists the entities obliged to comply with AML/CFT requirements.
Who does the law consider as “AML obliged entities”?
According to § 2 of the AML Act, the following categories fall under the obligations to prevent money laundering and terrorist financing:
- Banks and credit institutions – all financial organisations licensed to provide banking services.
- Financial and payment institutions – companies providing payment services, issuing electronic money, or carrying out money transfer activities.
- Investment companies and funds – investment intermediaries, management companies, pension funds.
- Insurance companies and intermediaries – if they provide life insurance or other products that may be used for money laundering.
- Auditors, accountants, and tax advisors – when providing professional services to their clients.
- Notaries, lawyers, and bailiffs – when participating in financial or property transactions on behalf of clients.
- Persons trading in high-value goods – e.g., dealers in precious metals, stones, cars, works of art, if transactions are made in cash above the statutory limit.
- Real estate agencies – when conducting real estate transactions.
- Casinos and other gambling operators – including the online sector.
- Cryptocurrency companies (virtual asset service providers) – exchanges, exchangers, and wallet providers.
- Other persons who, by the nature of their activities, may be involved in operations associated with a higher risk of money laundering or terrorist financing.
What are the obligations?
For all “AML obliged entities,” the law provides for the following:
- Client identification and verification (KYC).
- Transaction monitoring and analysis.
- Reporting suspicious transactions to the FAÚ (Financial Analytical Office).
- Appointment of an AML officer and notification of the FAÚ.
- Development of internal rules and AML risk assessment systems.
- Regular AML training for employees.
Failure to comply with these obligations may result not only in administrative fines (which can reach amounts that may be fatal for companies), but also in the loss of a licence or even criminal liability.
The scope of AML obligations in the Czech Republic is therefore quite broad and covers both the traditional financial sector and new industries, including the cryptocurrency business and gambling.