The Czech Republic’s Act No. 253/2008 Coll., on certain measures against money laundering and financing terrorism (the “Act on Money Laundering”) is not a novelty. Despite this fact, the Act is still neglected and underestimated, even among big corporations. This stance is connected to legal entities’ general unawareness of being a bearer of obligations pursuant to the law, as well as to their mistaken belief that if they do not launder the money deliberately, they cannot be under threat of sanction. However, pursuant to the new Act No. 418/2011 Coll., on Criminal Liability of Legal Entities and Legal Proceedings against them (the “ACLLE”), the crime of money laundering can easily be committed without anyone in the company noticing.
Liable person pursuant to the Act on Money Laundering
The Act on Money Laundering has been in force for almost four years. It sets out many obligations that should prevent activities leading to the disguising of the illegal origin of economic benefits derived from criminal activity, activities that are designed to give the impression that the economic benefit was acquired in accordance with the law. In other words, the purpose of the Act is to prevent activities leading to concealing the origin of the funds in order to “launder” them.
The keyword of this Act is liable person, because the obligations provided under this Act apply only to the liable person. In the first place, liable persons are credit institutions and other financial institutions, such as entities entitled to provide leasing, guarantees and credit loans, as well as entities entitled to intermediate savings, loans or credits.
Liable persons under the Act also include providers of so-called readymade companies, including services consisting in acting as a statutory body or the provision of registered office. Another relatively widespread range of persons liable under the Act are persons authorised to trade with used goods or to receive goods in pledge, typically bazaars and pawnshops. The Act also applies to foreign legal entities or natural persons carrying out these activities in the Czech Republic through a branch office or establishment.
While all of these entities are more or less conscious of their obligations under the Act, most entrepreneurs have no idea that they too are liable persons whenever they receive cash of EUR 15,000 or more, regardless of their line of business. Moreover, the amounts (advance payments, instalments, etc.) received in connection with one transaction are added up.
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