New rules for banks under the Amendment to the Anti-Money Laundering Act (“the Amendment”) came into effect on 1 January 2017. Under the Amendment, all banks must create an internal risk assessment in written form which should be approved by their managing bodies by 1 July 2017. Subsequently, the risk assessment must be submitted to the Financial Intelligence Unit (which is established by the Amendment as an independent administrative body) within 30 days of its approval.
The Amendment gives certain discretion to the banks when evaluating the application of relevant provisions to individual cases in their day-to-day activity. Such an evaluation should be based mainly on the newly-introduced mechanism of risk assessment. The results of the risk assessment should be used to categorize clients and transactions into one of two groups: a group of those to which stricter requirements for client identification apply (i.e. where additional data should be gathered, for example e-mail addresses, phone numbers or details of employment) and a group where these requirements are less strict (e.g. where a client may be identified without its physical presence). Input data about clients may also be gathered from the newly-set-up Register of the Ultimate Beneficial Owners of Companies, which will be accessible to banks, upon request submitted to the Ministry of Justice, as of 1 January 2018.
The Amendment also introduces changes regarding the customer due diligence process (“DD”), whereby the requisite extent and content of such DD is now set out as a non-exhaustive list (including, for example, the nature of a relevant trade) so that the bank may modify the extent and content of the DD at its discretion. In this regard, there is also a new obligation to maintain a record of information and documents gathered during DD for a period of 10 years after the termination of the trade or commercial relationship. Such DD is crucial in order to inform the bank's decision of whether to report a suspicious transaction to the Financial Intelligence Unit.
The Czech implementation of the 4th Anti-Money Laundering EU Directive corresponds with the principle of active participation of banks as obliged entities in the prevention of, and fight against, not only money laundering and the financing of terrorism, but also against the financing of weapons of mass destruction.