Decree No. 247 / 2007 Coll.
Decree laying down certain requirements for the management and control system of banks and savings and credit cooperatives
Valid
Order
Effective from 25.09.2007
Text versions:
25.09.2007
247
DECLARATION
of 5 September 2007
laying down certain requirements for the management and control system of banks and savings and credit cooperatives
The Czech National Bank provides pursuant to § 8b (5) of Act No. 21 / 1992 Coll., on Banks, as amended by Act No. 120 / 2007 Coll., and pursuant to § 7a (5) of Act No. 87 / 1995 Coll., on Savings and Credit Cooperatives and certain measures related thereto and on the addition of Act No. 586 / 1992 Coll., on Income Taxes, as amended, as amended by Act No. 120 / 2007 Coll.:
Subject matter
This decree lays down certain requirements for the management and control system of the bank and for the savings and credit cooperatives (hereinafter the "cooperative reserve ').
Definition of terms
For the purposes of this decree:
(a) by a obliged person:
1. bank,
2. cooperative reserve,
(b) by a client
1. the person to whom the obliged entity provides its services under a contractual relationship;
2. the person who is negotiating with the debtor for the conclusion of a contract for the provision of services by the debtor;
3. the person in whose name or on whose behalf the person who provides his services on a contractual basis is acting;
4. the person in whose name or on whose behalf the person who is negotiating with the obliged person for the conclusion of a contract for the provision of services of the obliged person,
5. a person who is authorised to dispose of funds in the account of the person who has a contract with the debtor for the provision of services of the debtor;
6. candidate for membership of the cooperative reserve,
7. the person in whose name or on whose behalf the person who is negotiating with the cooperative reserve is acting as a member of the cooperative reserve; or
8. Person negotiating with the cooperative reserve for the conclusion of a contract for the provision of services of the cooperative reserve without that person being a member of the cooperative (1),
(c) an opaque ownership structure where:
1. an extract from the Commercial Register, other similar records of the country of registered office of a foreign person which is not registered in the Czech Republic, and if such records are not in the country of registered office of that foreign person, then an officially certified social contract; or
2. any other instrument which has been established by a foreign person and which contains all its amendments; or
3. from a reliable source to which the obligor relies reasonably,
it cannot be ascertained who is a member of a client-legal entity that does not have a legal form of a public limited company or a controlling person2) a client-legal entity that has a legal form of a public limited company; the non-transparent ownership structure is not concerned if the client's shares are listed under the Capital Market Act (3), or as regards a foreign equity company whose shares are admitted to trading on the public market,
(d) the country of origin of the State;
1. whose natural person is a national,
2. where a natural person is registered for long-term or permanent residence; or
3. where the legal person has its registered office, branch or establishment;
(e) client risk factor
1. the country of origin of the client, the country of origin of the person controlling the 2) the client-entrepreneur, the country of origin of the client-contractor, which is a foundation under the Law on Foundation and Foundation Fund4), or the founder of the client, which is a generally beneficial company under the Act on General Beneficies5), or a person who has a similar status under foreign law, in the case of a country which is not sufficiently or at all applying measures against the legalisation of the proceeds of crime (hereinafter referred to as "legalisation of proceeds") and financing of terrorism, or in the case of a country which the debtor considers to be at risk on the basis of his assessment;
2. the country of origin of the person in trade with whom the client is involved, in the case of a country which is not sufficiently or at all applying measures against the legalisation of the proceeds and financing of terrorism, or in the case of a country which the debtor considers to be a risk on the basis of his assessment;
3. the registration of a client, a person controlled by 2) a client-entrepreneur, a client-founder who is a foundation under the Law on Foundation and Foundation Fund4), a founder of a client who is a generally beneficial company under the Act on Public Beneficies5), or a person who has a similar status under foreign legislation, or a person with whom a client conducts trade, on the list of persons and movements against which sanctions are applied in accordance with the Act on the implementation of international sanctions and directly applicable European Community7),
4. the opaque ownership structure of the client-legal entity,
5. opaque ownership structure of the founder of the client-non-entrepreneur,
6. unclear origin of the client's funds,
7. the fact that the client is not acting on his or her account or conceals that he or she is following an order from a third party;
8. Unusual way to conduct a transaction, in particular with regard to the type of client, object, amount and method of settlement of a transaction, purpose of setting up an account and object of the client's activities,
9. Determination of fact suggesting that the client is conducting a suspicious transaction,
(f) by an authorised person, an employee of a obliged person designated under the law on certain measures against the legalisation of proceeds from crime (8), to ensure the continuous exchange and exchange of information with the Ministry of Finance (hereinafter referred to as "the Ministry") and to fulfil the reporting obligation under the law on certain measures against the legalisation of proceeds from crime (9), or the statutory body of the obliged person, if not designated,
(g) the person responsible who, having regard to his / her professional classification, may meet suspicious transactions and the person who is involved in the subject matter of the activity of the obliged person under a contract other than a contract of employment and who, in his / her activity for the obliged person, may meet suspect transactions;
(h) information system for the acquisition, processing, transmission, sharing and storage of information in whatever form;
(i) by a correspondent credit or financial institution, a foreign person through which the debtor makes payments abroad or receives payments from abroad.
(1) The requirements laid down in this Decree are fulfilled by the obliged entity in view of its size, management, number of employees, nature, scale and complexity of the activities it carries out or intends to carry out.
(2) The Compulsory Person has a system of internal principles, rules, procedures and control measures to prevent the legalisation of proceeds and financing of terrorism (10) (hereinafter referred to as the "Internal Principles System"), which includes the principles, rules and procedures of good corporate governance, including risk management, contained in Sections 4 to 6 of this Decree.
(3) The mandatory person shall define the powers and responsibilities of the institutions, departments and persons responsible, including the delegate, in carrying out tasks relating to the prevention of the legalisation of proceeds and terrorist financing and the implementation of international sanctions (11).
(4) The obliged entity shall ensure that the delegate is not directly responsible for the conclusion and settlement of transactions or entrusted with the performance of internal audit.
Customer acceptance rules
(1) The obligor shall lay down the rules on the acceptability of the client according to which, taking into account risk factors,
(a) to categorise clients;
(b) lay down the conditions under which the obligor does not establish a contractual relationship with the client or any contractual relationship already in existence that would enable the client to legalise the proceeds of crime or finance terrorism, shall terminate;
(c) establish procedures for identifying risk factors for new clients and for continuously identifying risk factors during the duration of the contractual relationship with the client;
(d) establish procedures applicable to clients for which a risk factor has been identified (hereinafter referred to as "risk client").
(2) The rules on the acceptability of a client are approved by the management board of the obliged entity.
(1) Before establishing a contractual relationship with a client, the obligor shall establish the reason for the termination of the contractual relationship of the client with another obligor if he finds facts suggesting that the client could conduct suspicious business during the contractual relationship.
(2) When establishing a contractual relationship with the client and during the client, the obliged person shall in particular:
(a) identify and store information about the client to enable it to assess whether the client is a risk client;
(b) when establishing a client's account, it shall determine the purpose of its establishment, the anticipated movement of funds in that account, the fact that the client is in employment and, if the account is set up for business purposes, the subject matter of the client's activities;
(c) establish the origin of the client's funds where a risk factor has been identified for the client;
(d) verify and update the validity and completeness of the data recorded on the client under this Order;
(e) pay particular attention to all complex, unusually large-scale client transactions, both in terms of size and number of participants, and to transactions of an unusual nature which have no apparent economic or legal reason;
(f) pay particular attention to transactions carried out with natural persons based on individual access to a client, such services being provided by the obliged person only to those clients who fulfil the specific, mandatory conditions laid down; the obliged entity shall proceed in this field by making the conclusion of a contract with a new client subject to prior approval by at least one employee of the obliged entity whose functional classification is higher than that of the employee or employees of the obliged entity proposing to conclude a contract with the client; where this is not possible in view of the size, management or number of staff of the obliged entity, the conclusion of the contract shall be subject to the approval of at least two members of the Board of Directors,
(g) when carrying out technology transactions where there is no direct contact with a client, the obligor shall establish and apply procedures that demonstrate that the transaction is conducted with an already identified client.
Evaluation of suspicious transactions
(1) Following the determination of the risk factor, the obliged entity shall assess whether the transaction is suspected.
(2) If the responsible person finds, when assessing the transaction, facts suggesting that the client is conducting a suspicious transaction, he shall draw up a report on the suspected transaction (hereinafter referred to as "the report ') containing such information on the client and his business, enabling the delegate to assess whether the transaction is suspicious.
Compulsory information system
(1) The obliged entity's information system must enable the detection, monitoring and evaluation of the information required
(a) to achieve the purpose of the Act on certain measures against the legalisation of proceeds from crime 12), and
(b) to comply with the requirements laid down in this Decree.
(2) The responsible persons shall have adequate access to the information contained in the obliged entity's information system enabling them to be used effectively to evaluate suspicious transactions and risky clients.
Evaluation report
The required person shall ensure that at least once a year the delegate submits a report to the Board of Directors and the Supervisory Board of the Bank or the Board of Directors and to the Supervisory Board of the Cooperative Reserve evaluating the activities of the obliged entity in the field of preventing the legalisation of proceeds and financing of terrorism. In particular, the report shall assess whether the obliged entity has complied with all the provisions of the law on certain measures against the legalisation of criminal proceeds. 12) and this decree on whether measures to prevent the legalisation of proceeds and terrorist financing are effective, what deficiencies in the system for the prevention of the legalisation of revenues and terrorist financing have been identified in the last annual period and what risks may arise for the obligor. In the event of deficiencies identified, the report shall include a draft of measures to improve the system for the prevention of the legalisation of proceeds and of terrorist financing. The report shall also include statistical data on reports and notifications of suspicious transactions. These dates are broken down according to the organisational structure or according to the business activities of the obliged entity with regard to the territorial breakdown of the Czech Republic.
Training system
Obligatory person in risk management resulting from its possible misuse to legalise proceeds and finance terrorism in the framework of a training system applied in accordance with the law on certain measures against the legalisation of proceeds from crime 12),
(a) complements the training system with new knowledge found in the field of prevention of the legalisation of proceeds and financing of terrorism and informs the responsible persons accordingly;
(b) verify on an ongoing basis the knowledge of the persons responsible for preventing the legalisation of revenues and terrorist financing;
(c) train the new responsible persons before they are placed in positions where they may encounter suspicious business.
The obliged entity shall only cooperate with such correspondent credit or financial institutions in risk management;
(a) which apply effective measures to prevent the legalisation of revenues and the financing of terrorism;
(b) which have registered offices and head offices in the same State; and
(c) whose business activities he knows.
The obliged entity shall require third parties acting on behalf of or on behalf of the obliged entity to apply the principles, rules and procedures of good administration and management of the company, including risk management, contained in paragraphs 4 to 6 of this Order to the same extent as the obliged entity, and shall monitor their application by such persons.
The mandatory person shall keep the internal rules up to date, improve the information system, the training system and other areas of the management and control system in order to prevent the legalisation of revenues and the financing of terrorism.
Efficacy
This decree shall take effect on the day of its publication.
Governor:
Doc. Ing. Tůma, CSc.
1) Paragraph 3 (5) of Act No. 87 / 1995 Coll., on savings and credit cooperatives and certain measures related thereto and on supplementing the Act of the Czech National Council No. 586 / 1992 Coll., on income taxes, as amended, as amended.
2) § 66a of Act No. 513 / 1991 Coll., Commercial Code, as amended.
3) Act No. 256 / 2004 Coll., on Capital Market Business, as amended.
4) Act No. 227 / 1997 Coll., on foundations and foundations and amending and supplementing certain related laws, as amended.
5) Act No. 248 / 1995 Coll., on public utility companies and amending and supplementing certain laws, as amended.
6) Paragraph 1a (1) of Act No. 61 / 1996 Coll., on certain measures against the legalisation of proceeds from crime and amending and supplementing related laws, as amended.
7) For example, Act No 69 / 2006 Coll., on the implementation of international sanctions, Council Regulation (EC) No 329 / 2007 of 27 March 2007 concerning restrictive measures against the Democratic People's Republic of Korea, Council Regulation (EC) No 1412 / 2006 of 25 September 2006 concerning certain restrictive measures against Lebanon, Council Regulation (EC) No 817 / 2006 of 29 May 2006 renewing restrictive measures against Burma / Myanmar and repealing Regulation (EC) No 798 / 2004.
8) § 9 (2) of Act No. 61 / 1996 Coll.
9) § 4 of Act No. 61 / 1996 Coll.
10) § 9 of Act No. 61 / 1996 Coll.
11) Act No. 69 / 2006 Coll.
12) Act No. 61 / 1996 Coll.
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Regulation Information
| Citation | Decree No. 247 / 2007 Coll., laying down certain requirements for the management and control system of banks and savings and credit cooperatives |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 25.09.2007 |
|---|---|
| Effective from | 25.09.2007 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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