Companies registered in the Czech Commercial Register will soon be required to disclose the identity of their ultimate beneficial owners (“UBO”), should the Czech amendment to the Act on Public Registers (the “Amendment”) be passed. The Amendment will oblige companies to disclose a full name, address of residence and citizenship of their UBOs as well as the information on the merit of a person’s status as a UBO of the company. Failure to fulfil the obligation will result in a fine of up to CZK 100,000, and in extreme cases dissolution of the company may be imposed by the court.
The Amendment sets out a 25% threshold based on voting rights, portion of registered capital and/or distribution of dividends which an individual must reach (either directly or through other entities) to qualify as a UBO. In the event that there is no UBO of the company or if UBO cannot be identified, the members of the company’s statutory body will be considered as UBOs.
If the Amendment is passed, a register of UBOs will be established in the public Commercial Registers maintained by the Czech courts. Access to the information will only be available to entities that represent official authorities including courts, tax authorities, intelligence agencies, the Czech National Bank, and the Czech Police. These entities will be able to access the information upon request to the Czech Ministry of Justice. Such request must set out the specific reason why the information is required. The information will not be publicly available unless it can be demonstrated that the required information relates to money laundering or terrorist-related criminal offences.
The Amendment is currently before the Chamber of Deputies of the Czech parliament. It aims to implement the 4th Anti-Money Laundering EU Directive, and to assist the EU in fighting against money laundering and corruption. Should the Amendment pass, companies will have one year in which to disclose the identification of their UBOs. The court’s fee for disclosure of the UBOs will be CZK 1,000.