Decree No. 129 / 2014 Coll.
Decree amending Decree No. 281 / 2008 Coll., on certain requirements for the system of internal principles, procedures and control measures against the legalisation of proceeds from crime and terrorist financing
Valid
Effective from 26.07.2014
129
DECLARATION
of 25 June 2014
amending Decree No 281 / 2008 Coll., on certain requirements for the system of internal principles, procedures and control measures against the legalisation of proceeds from crime and terrorist financing
The Czech National Bank provides pursuant to § 56 of Act No. 253 / 2008 Coll., on certain measures against the legalisation of proceeds from crime and terrorist financing, for the implementation of § 21 (9) of this Act:
Decree No 281 / 2008 Coll., on certain requirements for the system of internal principles, procedures and control measures against the legalisation of proceeds from crime and terrorist financing, is amended as follows:
1. in Paragraph 2 (1) (c):
"(c) by a CSD of book-entry securities, by a person managing a central securities register maintained by a CSD of book-entry securities, by a person managing a separate record of investment vehicles or by a person keeping a record of a separate record of investment vehicles,";
2. footnotes 2 and 3, including references thereto, are deleted.
3. In Article 2 (1) (f), the words "the self-governing investment fund, the chief administrator of the investment fund, the pension company or the pension fund," shall be inserted after the words "the investment company,";
4. in Article 2 (1) (g):
"(g) a payment institution, a small-scale payment service provider, electronic money institutions or a small-scale electronic money issuer,"
5. in Paragraph 2 (1) (h):
"(h) an insurance undertaking, reinsurance undertaking, insurance intermediary or individual liquidator of claims in the course of life insurance activities, with the exception of an insurance intermediary for which the insurance undertaking is liable for damage caused by its activity; or"
6. in Article 2 (1), points (i), (j), (k), (l) and (m), including footnote 4, are deleted;
Point (n) shall be renumbered (i).
7. in Article 2 (1) (i):
"(i) a person authorised to operate an exchange activity under the Exchange Act."
8.
Definition of terms
(1) For the purposes of this decree, an opaque ownership structure means a state where it is impossible to determine who is the actual owner of the client
(a) an extract from the Commercial Register, other similar records of the country of registered office of a foreign person not registered in the Commercial Register of the Czech Republic, and, if such records are not in the country of registered office of that Foreign Person, an officially certified social contract; or
(b) another instrument which has been established by a foreign person and which contains all its amendments; or
(c) a reliable source on which the institution relies reasonably.
(2) For the purposes of this Order, the country of origin shall be:
(a) any natural person of each State of which that person is a national and, at the same time, any other State in which he is registered for permanent or other residence;
(b) a legal person subject to obligations under Article 25 (4) of the Act or similar obligations, the State in which he has his registered office;
(c) a legal person who is not subject to obligations under Paragraph 25 (4) of the Act or similar obligations, the State in which he has his registered office and, at the same time, all States in which he has a branch, organisational component or establishment.
(3) The non-transparent ownership structure referred to in paragraph 1 shall not apply where the client is a company whose securities are admitted to trading on a European regulated market or on a foreign market similar to a regulated market and which is subject to disclosure requirements equivalent to those of European Union law. ';
footnote 5 is deleted.
9. In Article 4 (2), the words "including client identification and control," shall be inserted after the word "measure."
10.Paragraph 4 (3) reads as follows:
"(3) A self-liquidator of claims in the performance of life insurance activities and a person authorised to conduct an exchange activity may not fulfil the requirements laid down in Article 5 (1) to (4) in relation to those activities. However, when identifying and evaluating suspicious transactions, it shall take into account the nature of the transaction and the circumstances of the transaction and the nature and volume of the client's usual business. '
11. in Article 4, the following paragraph 4 is added after paragraph 3:
"(4) An institution which, in relation to a client, applies an exemption from the obligation to identify or control a client in accordance with Section 13 of the Act shall not be obliged to comply with the requirements laid down in Section 5 of this Decree with respect to that client, to the extent applicable. However, when assessing risks under Section 13 (3) of the Act, institutions shall take into account at least the risk factors referred to in Section 5 (2) and the circumstances set out in Section 5 (3) (c) of this Decree. ';
12. In Section 5, the words "the determination of the risk profile and other procedures' shall be added after the words" Rules of Acceptability of the client '.
13. in Paragraph 5 (1):
"(1) Institutions under a risk management system related to the legalisation of proceeds from crime or terrorist financing shall establish and apply the rules and procedures according to which, taking into account the client's risk profile,
(a) to categorise clients;
(b) decide whether to conduct a business or establish a business relationship with a client or terminate an existing business relationship with a client;
(c) identify the risk factors referred to in paragraph 2 for new clients and continuously during the duration of the business relationship for all clients; update the client's inclusion in the relevant risk category according to the information found; and
(d) take appropriate measures against clients for whom a risk factor has been identified (hereinafter referred to as "risk client"). "
14. In Paragraph 5 (2), the word "at least" shall be inserted after the words "the client's risk profile of the institution shall be drawn up and evaluated".
15. in Article 5 (2) (a), the words "the person who acts with the institution on behalf of the client" shall be inserted after the words "the origin of the client."
16. in Article 5 (2) (a), the words "some of" shall be inserted after the words "on behalf of the client."
17. in Article 5 (2) (b):
"(b) the fact that, according to the information at the disposal of the institution, the object of the transaction has been transferred or is to be made available in connection with the transaction from a State which does not sufficiently or at all apply measures against the legalisation of the proceeds of crime and terrorist financing, or from a State which, on the basis of its assessment, considers the object of the transaction to be at risk, or that the object of the transaction has been transferred or is to be made available in connection with the transaction,";
18. in Paragraph 5 (2) (c), including footnote 2:
"(c) the registration of a client, a person who acts with an institution on behalf of a client, the actual owner of a client, the person with whom the client carries out the transaction, or, if known to the institution, the final recipient of the subject-matter of the transaction or the actual owner of the person with whom the client carries out the transaction, on the list of persons and movements against which penalty measures are applied in accordance with other legislation2);
2) For example, Act No 69 / 2006 Coll., on the implementation of international sanctions, as amended, Council Regulation (EU) No 267 / 2012 of 23 March 2012 concerning restrictive measures against Iran and repealing Regulation (EU) No 961 / 2010, as amended, Council Regulation (EC) No 329 / 2007 of 27 March 2007 concerning restrictive measures against the Democratic People's Republic of Korea, as amended. '
19. footnote 6 is deleted.
20. in Article 5 (2) (g), "the establishment of an account" is replaced by "the business relationship."
21. In Article 5 (2) (g), a comma is inserted after the words "client activities" and the word "a" is deleted.
22. in Article 5 (2) (h), the dot at the end of the sentence is replaced by a comma and the following point (i) is added:
"(i) the fact that, according to the information available to the institution, the subject of the client's activities is associated with an increased risk of legalising the proceeds of crime or terrorist financing."
23. in Article 5 (3), the words "and in the course of" shall be inserted in the introductory part of the provision after the words "and in the conduct of transactions which are not part of a business relationship."
24. in § 5 (3) (c) (1):
'1. where any of the risk factors referred to in Article 5 (2) occur, ';
25. in Article 5 (3) (c) (2), the word "or" shall be deleted;
26. in Article 5 (3) (c) (3), the dot at the end of the sentence is replaced by a comma and the following point 4 is added:
"4. where the institution is aware that the actual owner of the client is a politically exposed person or that the politically exposed person participates otherwise, or"
27. in Article 5 (3) (c), the following point 5 is inserted after point 4:
"5. large volume or high level of complexity, in particular with regard to the type of client, the subject, the amount and manner of settlement of the transaction, the purpose of the business relationship and the object of the client's business. ';
28. Paragraph 6 (1) is deleted and paragraph 2 is deleted.
29.
All approval and decision-making processes and control activities under the system of internal principles, procedures and control measures, including related responsibilities, powers, supporting documents and assessment of the evaluation report referred to in Article 8, shall be subject to retrofitting. In order to ensure this requirement, the institution shall establish and maintain an adequate information retention system, which shall also include information on findings made during customer checks and trade reviews and correspondence relating to transactions and business relationships. A retrofitting process shall also be such as to conclude that there are no grounds for changing the client's risk profile or making a notification of a suspected transaction. ';
30. In Article 8, the following paragraph 2 is added after paragraph 1, including footnote 3:
"(2) All conclusions and assessments contained in the evaluation report must be duly justified. If the evaluation report is not processed by the contact person (3), the report shall contain the statement of the contact person on the completeness and accuracy of the evaluation report.
3) Article 22 of Act No. 253 / 2008 Coll., on certain measures against the legalisation of proceeds from crime and terrorist financing, as amended. '
Paragraphs 2 to 6 shall become paragraphs 3 to 7.
31. in Paragraph 8 (6):
"(6) If the institution has a statutory body, that authority shall discuss the evaluation report no later than 4 months after the end of the period for which it is processed and shall comment on the deficiencies identified and the proposals contained therein. If the institution has a supervisory board, a management board or a supervisory commission, that body shall also carry out these duties. In the case of a branch, organisational component or establishment of an institution referred to in Article 2 (2), those obligations shall be fulfilled by the manager of that branch, organisational component or establishment. ';
32. in Article 8 (7), the words "together with the observations referred to in paragraphs 2 and 6" shall be inserted after the words "Evaluation report."
Transitional provision
The institution shall bring its system of internal principles, procedures and control measures to comply with the obligations laid down by Act No 253 / 2008 Coll., on certain measures against the legalisation of proceeds from crime and terrorist financing, as amended, into line with Decree No 281 / 2008 Coll., on certain requirements for the system of internal principles, procedures and control measures against the legalisation of proceeds from crime and terrorist financing, as amended, not later than six months after the date of entry into force of that decree.
Efficacy
This decree shall take effect on the 15th day following its publication.
Governor:
Ing. Singer, Ph.D., v. r.
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Regulation Information
| Citation | Decree No. 129 / 2014 Coll., amending Decree No. 281 / 2008 Coll., on certain requirements for the system of internal principles, procedures and control measures against the legalisation of proceeds from crime and terrorist financing |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 11.07.2014 |
|---|---|
| Effective from | 26.07.2014 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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