CZECH REPUBLIC Law and Practice Contributed by: Jan Kohout and Illia Antonov, PRK Partners
1. Trends and Overview 1.1 Sanctions Market
in recent years, likewise appears to be catching up with compliance trends and KYC awareness. 1.4 Overview 1.4.1 Types of Sanctions The Czech Republic implements a comprehensive system of sanctions through a dual-framework legal system that combines international obligations with autonomous national measures. Under this legal framework, sanctions are systematically divided based on their target and scope into two primary cat - egories: personal (individual) sanctions and sectoral sanctions. 1.4.2 Scope of Sanctions Personal Scope Compliance with international and national sanctions is mandatory for a broadly defined group referred to as “Czech persons”. This includes: • the Czech Republic (as a state and its public authorities); • citizens of the Czech Republic, regardless of their actual place of residence; • foreign nationals habitually residing in the territory of the Czech Republic (typically residing for 183 or more days in a calendar year); • foreign nationals with permanent or temporary resi - dence status in the Czech Republic; and • legal entities with their registered office in the Czech Republic (including local government units, corporations, and branches of foreign entities reg - istered in the Czech Republic). Territorial Scope Administrative and criminal offences are assessed and prosecuted even when committed by a Czech person abroad. Therefore: • a Czech citizen living or working in a foreign jurisdiction remains fully bound by Czech and EU sanctions; • Czech legal entities must ensure that their foreign branches, representative offices, and employees operating outside the Czech Republic comply with the sanctions; and • any transaction that is partially conducted within or directed from the Czech Republic, or that involves
After four years of Russia’s full-scale invasion of Ukraine, restrictive measures targeting Russia and its allies remain the main driver of the sanctions market. A broad range of businesses, including those not previ - ously affected by sanctions regimes – such as service providers or exporters of non-dual-use items – have become more aware of and focused on sanctions compliance procedures, while regulators and enforce - ment bodies have grown more active in investigating conduct than earlier years. 1.2 Key Trends Major developments over the last 12 months include: • A growing number of administrative and crimi - nal investigations, together with several charges brought before the courts in sanctions breach and sanctions evasion cases, are attracting the atten - tion of the general public as well as that of con - cerned professionals. • The criminal offence of sanctions breach has been widened to include negligent conduct. • Regulators and investigative bodies are now actively investigating individual cases, compared to previous years, which were largely spent map - ping the terrain and developing methodological approaches. • Anti-sanctions circumvention compliance is becoming a broader topic even for businesses that are neither directly concerned with nor operating in Russia or Belarus, hand in hand with the growing emphasis on anti-circumvention in EU legislation and enforcement trends. 1.3 Key Industries As the Czech economy remains heavily export-orient - ed, companies in traditionally strong sectors – particu - larly mechanical engineering, heavy machinery and metallurgy – were affected first and foremost. At the same time, many service providers and online busi - nesses, which have emerged as a growing market in recent years, have also been affected and are now actively implementing compliance measures. The tra - ditionally robust real estate market, heavily impacted
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