Act No. 219 / 1995 Coll.
Foreign exchange law
Valid
Law
Effective from 01.10.1995
219
THE LAW
of 26 September 1995
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Parliament has decided on this law of the Czech Republic:
BASIC PROVISIONS
Definition of terms
For the purposes of this Act:
(a) domestic territory of the Czech Republic,
(b) domestic natural person with a permanent residence (1) in the country or legal person with a residence (2) in the country;
(c) a natural or legal person other than those referred to in (b) by a stranger;
(d) foreign exchange values of funds denominated in foreign currency, foreign securities as well as money-worthy rights and liabilities derived therefrom (hereinafter referred to as "financial derivatives");
(e) the securities of the instrument or which replace the entries with which the right of participation in the property or the right of payment is attached;
(f) foreign securities securities whose issuer is an alien;
(g) domestic securities securities the issuer of which is a seal;
(h) by financial credit, the provision of funds in Czech or foreign currency with which the obligation to repay them is linked; a money loan, mortgage, consumer credit, financial leasing is also considered as a financial loan,
(i) direct investment in the fulfilment of the reporting obligation of such expenditure on funds or other money-worthy property rights and other property values, the purpose of which is to establish, acquire or expand permanent economic relations of the investing domestic or domestic as persons acting in agreement on business abroad or investing foreign or foreign persons as persons acting in agreement on business in the domestic territory, in particular by any of the following:
1. the creation or acquisition of an exclusive stake in the business, including its extension;
2. participation in a newly created or existing business where the investor owns or acquires at least 10% of the capital of a trading company or cooperative or at least 10% of the equity of the company or at least 10% of the voting rights or another share of the business of the company exceeding 10%;
3. Further provision or acceptance of funds or other money-worthy assets or rights in economic relations based on direct investment;
4. the financial credit linked to the profit sharing agreement or the exercise of effective influence on the management of the undertaking;
5. use of profit from the existing direct investment in this investment (reinvestment of profit);
j) Foreign exchange bodies Ministry of Finance and Czech National Bank,
(k) foreign exchange point
1. a bank or savings and credit cooperative established in the country, a branch of a foreign bank, a payment institution, a branch of a foreign payment institution, a small-scale payment service provider, an electronic money institution, a branch of a foreign electronic money institution or a small-scale electronic money issuer authorised, within the scope of a bank licence, authorisation or registration pursuant to a special legislature (3), to make payment in respect of foreign, foreign exchange or non-cash transactions in foreign currency;
2. an exchange agent; or
3. a person authorised to provide payment services in respect of abroad on the basis of the principle of a single licence.
Allocation between foreign exchange authorities
(1) The Ministry of Finance and Česká národní banka operate the state administration under this Act.
(2) The Ministry of Finance exercises its competence under this Act towards the organisational elements of the State, local authorities, state funds and all persons in the area of loans granted or received by the Czech Republic.
(3) The Czech National Bank exercises its powers under this Act against other domestic and foreign persons.
RIGHTS AND OBLIGATIONS OF TERMS AND FOREIGN
Notification obligation
(1) In order to establish the balance of payments of the Czech Republic, in accordance with the obligations arising from its membership of international organisations, Tuzemík is obliged to notify
(a) cash claims and liabilities to domestic residents abroad and to foreigners;
(b) direct investment, financial credits, securities and related debits and payments to domestic residents abroad and to non-residents, financial market operations, including operations carried out through non-residents;
(c) the establishment and status of accounts or other forms of deposits abroad, including the conferral of funds to deposit on an account abroad;
to the extent, for the period, within the time limits and in the manner laid down by the Order of the Czech National Bank or upon request of the foreign exchange authority.
(2) In addition to the facts referred to in paragraph 1, the Tuzemík shall, upon request, notify the foreign exchange authority of the facts relating to foreign trade transactions.
(3) An alien who is in his domestic business is obliged to comply with the notification requirement of paragraphs 1 and 2 where the facts notified relate to his domestic business.
(4) A CSD and other persons authorised to keep records of investment vehicles, if they are not subject to this obligation by a CSD, as well as securities dealers, are required to report, at the request of the Czech National Bank, aggregated data relating to securities that are recorded or held in custody, managed or held in custody, broken down by the country of residence or residence of the owner, the country of residence or residence of the issuer, the type of security, its maturity, the sectoral classification of economic activity (7a) of the issuer of the security and, for foreign securities, by the sector classification of the economic activities of the security holder.
(5) The notification obligation referred to in paragraphs 1 to 4 shall be fulfilled directly or, where provided for in the Order of the Czech National Bank, by means of a foreign exchange point.
(6) The foreign exchange points through which the reporting obligation is fulfilled are required to transmit the notified facts to the foreign exchange authority in the manner laid down in the Order of the Czech National Bank.
(7) Foreign exchange points are required to handle information obtained in the context of the fulfilment of the notification obligation in such a way as to prevent their misuse.
Other obligations
Domestic and foreign nationals are required to submit a special permit to the foreign exchange point (§ 32 (1) and (2)) if required under this law.
Rights and obligations of foreign exchange points
The foreign exchange point is required to require the submission of a special permit (§ 32 (1) and (2)) before the appropriate payment is made, if required under this law.
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Inspection bodies
(1) Within the scope of its competence, the Foreign Exchange Authority controls compliance with this law, the legislation issued for its implementation, the international agreements which form part of the legal system and the special authorisations (Sections 32 (1) and (2)) (hereinafter referred to as the "Foreign Exchange Code"). In this context, it shall be entitled to require the necessary synergies between the persons checked, in particular the submission of the required documents and explanations.
(2) When carrying out an on-the-spot foreign exchange check, relations between the foreign exchange authority and the controlled persons shall be governed by the basic rules of control laid down by a special law, (14) unless otherwise provided by that law.
Obligations of persons checked
Controlled persons shall provide the foreign exchange control with the necessary synergies.
Procedure by foreign exchange authorities for the detection of breaches of foreign exchange rules
(1) If the foreign exchange authority finds that a person has infringed the foreign exchange regulations, it may:
(a) to impose measures to remedy the deficiencies identified and to that end to set a time limit to remedy those deficiencies;
(b) suspend operations contrary to foreign exchange regulations;
(c) prohibit activities contrary to foreign exchange regulations;
(d) cancel the specific authorisation.
(2) An infringement of the foreign exchange rules is also considered to be a breach of the scope of authorisation and non-compliance with the conditions laid down in the registration or special authorisation (§ 32 (1) and (2)).
(3) The person who has been placed under the measure referred to in paragraph 1 (a) must inform the foreign exchange authority of the manner in which the deficiencies identified have been remedied within a time limit set by the foreign exchange authority.
(4) The decision to suspend an activity referred to in paragraph 1 (b) shall specify the duration and extent of the suspension.
Administrative offences
(1) A natural person, whether legal or legal, commits an administrative offence by:
(a) as a seal, fails to comply with the notification requirement under Article 5 (1) or (2);
(b) as an alien who does business in the Czech Republic, fails to comply with the notification requirement of Paragraph 5 (3);
(c) as a bogey or alien, do not submit a special permit to the foreign exchange place in accordance with Article 7;
(d) fails to comply with the information obligation under Paragraph 22 (3);
(e) fails to comply with the deposit obligation under Paragraph 31a (1);
(f) in contravention of Paragraph 31a (3), for the duration of the deposit obligation, it shall freely dispose of funds deposited in a separate account or transfer its right to payment to another person;
(g) infringes the prohibition laid down in Article 32 (1) or (2); or
(h) as operator of a mass information device in breach of Article 32 (5), they shall not disclose information on the declaration of an emergency situation in the foreign exchange economy.
(2) A CSD, other persons authorised to keep a record of investment instruments or a securities dealer shall commit an administrative offence by failing to comply with the notification requirement of Article 5 (4).
(3) A fine shall be imposed for the administrative offence:
(a) 100 000 CZK if the administrative offence referred to in paragraph 1 (a) to (d) or paragraph 2,
(b) 20 000 000 CZK for administrative offences referred to in paragraph 1 (f), (g) or (h);
(c) 0,3% of the amount of the liable deposit for each calendar day of non-compliance with the deposit obligation, if it is an administrative offence referred to in paragraph 1 (e).
(1) An administrative offence shall be committed by:
(a) it does not transmit the notified fact to the foreign exchange authority pursuant to Article 5 (6);
(b) treat the information obtained in the context of the fulfilment of the notification obligation in breach of Article 5 (7); or
(c) does not require authorisation before the payment is made in accordance with § 8.
(2) A fine of up to 500 000 CZK shall be imposed for the administrative offence referred to in paragraph 1.
(1) A natural person commits an offence by:
(a) as a seal, fails to comply with the notification requirement under Article 5 (1) or (2);
(b) as a seal or an alien, not submit a special permit to the foreign exchange place in accordance with Article 7;
(c) fails to comply with the information obligation under Paragraph 22 (3);
(d) fails to comply with the deposit obligation under Paragraph 31a (1);
(e) in contravention of Paragraph 31a (3), for the duration of the deposit obligation, it shall freely dispose of funds deposited in a separate account or transfer its right to payment to another person;
(f) infringes the prohibition laid down in Paragraph 32 (1) or (2); or
(g) as an operator of a mass information device contrary to Article 32 (5), it shall not disclose information on the declaration of an emergency situation in the foreign exchange economy.
(2) A penalty may be imposed in respect of an offence:
(a) 100 000 CZK if it is an administrative offence referred to in paragraph 1 (a), (b) or (c);
(b) 20 000 000 CZK if it is an administrative offence referred to in paragraph 1 (e), (f) or (g);
(c) 0,3% of the amount of the liable deposit for each calendar day of non-compliance with the deposit obligation, if it is an administrative offence referred to in paragraph 1 (d).
(1) The legal person shall not be liable for an administrative offence if he proves that he has made every effort to prevent an infringement.
(2) In determining the amount of the fine to a legal person, account shall be taken of the seriousness of the administrative offence, in particular the manner in which it was committed and the consequences thereof and the circumstances in which it was committed.
(3) The liability of a legal person for an administrative offence shall cease if the administrative authority has not initiated proceedings on him within 1 year of the date on which he became aware of it, but no later than 5 years from the date on which he was committed.
(4) Administrative offences under this law are discussed at first instance by the Czech National Bank.
(5) The liability for conduct arising in or directly related to the business of a natural person shall be subject to the provisions of the Liability and Penalty Act.
(6) The fines shall be collected by the authority which imposed them. The fine imposed shall be payable within 30 days of the date on which the decision to impose it became final. The income from fines is the income of the state budget.
(7) The reimbursement of the costs of infringement proceedings under this Act shall be the income of the budget of the Czech National Bank and shall be due within 30 days of the date on which the decision to impose them became final. The costs are collected at the time of their maturity by the Czech National Bank. For the purposes of managing their payment, the costs of the proceedings shall be treated as public budget22).
COMMON, POWER, TRANSITIONAL AND FINAL PROVISIONS
Decomposition against a decision under Paragraph 22 (1) (b), (c) or (d) shall not have suspensory effect.
Authorisation provisions
The Czech National Bank shall determine by decree the scope, period, time and manner of compliance with the notification requirement under Section 5.
Measures in the event of serious economic and financial disturbances
Depositary obligation
(1) The deposit obligation is the obligation of persons to hold a special account with a bank in the country of the specified percentage of the amount of funds for a certain period of time
(a) inter-bank deposits of foreign banks with domestic banks;
(b) deposits of non-bank foreign persons with domestic banks;
(c) from financial credits received by a domestic from a foreign country;
(d) obtained from the issue of domestic bonds and other domestic securities issued abroad which are accompanied by a right of cash performance.
(2) A deposit obligation may be imposed only in the event of adverse balance of payments developments where, as a result of the continuing excessive inflow of capital, there is a risk of deepening the overall imbalance which could lead to serious economic and financial disturbances and a threat to currency stability and which cannot be effectively averted by ordinary monetary policy instruments.
(3) For the duration of the deposit obligation, the persons subject to the deposit obligation may not freely dispose of funds deposited in a special account and may not transfer their right to payment to another person.
(4) The Czech National Bank and the Ministry of Finance provide by decree for the scope and duration of the deposit obligation, the persons who are exempt from the deposit obligation and the bank with which a special account is kept.
Emergency situation in the foreign exchange economy
(1) The following shall be prohibited at the time of the emergency situation in the foreign exchange economy, if there is an immediate and serious threat to international solvency:
(a) to acquire foreign exchange values for the Czech currency;
(b) to make all payments from home to abroad, including transfers of funds between banks and their branches;
(c) deposit funds in accounts abroad;
unless a special authorisation is issued by the foreign exchange authority.
(2) At a time of emergency in the foreign exchange economy, if the internal currency balance of the Czech Republic is immediately and seriously compromised, it is prohibited:
(a) to sell domestic securities to foreign persons;
(b) receive financial credits from foreigners;
(c) to set up accounts in the domestic territory for foreign persons and to deposit funds for foreign persons;
(d) to transfer funds from abroad to domestic countries between banks and their branches;
unless a special authorisation is issued by the foreign exchange authority.
(3) An emergency situation in the foreign exchange economy can be declared by the government in the event of adverse balance of payments developments, which immediately and seriously threatens the international solvency or internal monetary balance of the Czech Republic. The emergency situation in the foreign exchange economy shall take place on the date on which the government declares it in the mass media and shall end on the date fixed by the government on its publication, but no later than three months after the date of its notification in the mass media.
(4) When declaring an emergency situation in a foreign exchange holding, the Government shall at the same time indicate whether the emergency situation is in a foreign exchange holding subject to the prohibitions referred to in paragraph 1 or paragraph 2 or both.
(5) Anyone operating mass information devices, including television and radio broadcasting, is obliged to publish information on the declaration of emergency status in the foreign exchange economy without payment of costs at the request of the Government without delay and without modification of the content and meaning.
(6) The Foreign Exchange Authority shall issue a special authorisation under paragraphs 1 and 2 for the period of emergency in the foreign exchange economy solely because of the threat to the life and health of persons, the defence and security of the State and the functioning of its diplomatic services and for operations which lead to a demonstrable improvement in the balance of payments situation. Special permission is not required if the Czech Republic or the Czech National Bank is a participant in the foreign exchange legal relationship.
Transitional provisions
(1) A foreign exchange permit granted under the current Foreign Exchange Code (19) shall be deemed to be an exchange permit under this Act if it continues to be required under its provisions.
(2) Persons referred to in § 1 (m) (2) or (3) who operate under the foreign exchange permit provided for in the current foreign exchange law must apply to the foreign exchange licence authority under this law no later than one year after its entry into force, otherwise the foreign exchange permit or permit to exercise the right to operate shall cease to exist at the end of that period.
(3) Proceedings initiated in respect of illegal acts under existing provisions which are not illegal acts under this law shall be terminated on the date of application of this law.
(4) Negotiations conducted in contravention of the current foreign exchange law, which are also illegal under this law, shall be subject to the provisions of the existing rules, except as referred to in paragraph 5. The proceedings for these negotiations initiated before the date of application of this Act shall be terminated in accordance with the existing provisions, except as referred to in paragraph 5.
(5) Persons who have committed a foreign exchange offence under the current Foreign Exchange Act cannot be punished after the effectiveness of that law. Proceedings in the case of foreign exchange offences under the current law, which has not been terminated by a final decision, shall be terminated on the date of its effectiveness.
Repeal
They shall be deleted:
1. Act No. 528 / 1990 Coll., Foreign Exchange Act, as amended by Act No. 228 / 1992 Coll., Act No. 264 / 1992 Coll. and Act No. 82 / 1995 Coll.,
2. Decree of the Federal Ministry of Finance and the State Bank of Czechoslovakia No. 303 / 1992 Coll., implementing the Foreign Exchange Act, as amended by Decree No. 169 / 1994 Coll.,
3. measure České národní banka č. 282 / 1993 Coll., laying down the conditions for certain foreign exchange transactions carried out by banks,
4. the measure of the Czechoslovak State Bank laying down the procedure for foreign exchange domestic legal persons in the event of acceptance of payment in cash in the field of operational records and reporting, published in the amount of 103 / 1992 Coll.
Efficacy
This Law shall take effect on 1 October 1995.
Uhde v. r.
Havel v. r.
Klaus v. r.
1) Act No. 135 / 1982 Coll., on the reporting and registration of residents. Act No. 123 / 1992 Coll., on the residence of foreigners in the Czech and Slovak Federal Republic, as amended by Act No. 190 / 1994 Coll.
2) § 2 (3) of Act No. 513 / 1991 Coll., Commercial Code.
3) Act No. 21 / 1992 Coll., on Banks, as amended. Act No. 87 / 1995 Coll., on savings and credit cooperatives and certain measures related thereto and on supplementing the Czech National Council Act No. 586 / 1992 Coll., on income taxes, as amended, as amended. Act No 284 / 2009 Coll., on payment.
4) § 1 (3) (c) of Act No. 21 / 1992 Coll. § 3 (1) (d) of Act No. 87 / 1995 Coll.
10) Paragraph 1 (2) and (3) of Act No. 334 / 1992 Coll., on the Protection of the Agricultural Soil Fund.
11) Paragraph 3 (1) of Act No. 289 / 1995 Coll., on Forests and on the amendment and addition of certain laws (Forest Act).
14) Part of the third Act of ČNR No. 552 / 1991 Coll., on State Control, as amended.
17) Act No. 337 / 1992 Coll., on the Administration of Taxes and Fees, as amended.
18) Act No. 71 / 1967 Coll., on Administrative Procedure (Administrative Regulations).
19) Act No. 528 / 1990 Coll., Foreign Exchange Act, as amended.
22) Paragraph 2 (2) of Act No. 280 / 2009 Coll., Tax Code.
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Regulation Information
| Citation | Act No. 219 / 1995 Coll., Foreign Exchange Act |
|---|---|
| Regulation Type | Law |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 29.09.1995 |
|---|---|
| Effective from | 01.10.1995 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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