CZECH REPUBLIC Law and Practice Contributed by: Jan Kohout and Illia Antonov, PRK Partners
Czech financial institutions, falls within this jurisdic - tion even if the main performance occurs entirely outside Czech territory. EU Sanctions Scope Moreover, the EU sanctions regulations are directly applicable in the Czech Republic, and their territorial scope applies as well, namely: • within the territory of the EU (including its air - space); • on board any aircraft or vessel under the jurisdic - tion of a member state; • to any person inside or outside the territory of the EU who is a national of a member state; • to any legal person, entity, or body, inside or out - side the EU, which is incorporated or constituted under the law of a member state; and • to any legal person, entity, or body in respect of any business done in whole or in part within the EU. Implications Consequently, Czech parent companies may be held liable if they fail to prevent their foreign-incorporated subsidiaries from engaging in activities that circum - vent EU sanctions, particularly if the decision-making or facilitation occurred within the EU or at the Czech parent company. 1.4.3 Domestic and/or Supranational Measures Sanctions in force in the Czech Republic comprise both autonomous national measures (personal sanc - tions) and those adopted pursuant to United Nations and European Union legislation.
Unlike the FAU, which holds general competence, the following bodies exercise regulatory powers limited to their specific sectors: • The Ministry of Foreign Affairs administers the national sanctions list and proposes designations for both national and EU sanctions lists, follow - ing mandatory interagency consultation with other ministries, the FAU, police, and intelligence ser - vices; • The Czech National Bank supervises sanctions compliance across the financial sector – banks, insurers, and investment firms – through off-site monitoring and on-site inspections, and may penalise institutions for systemic compliance fail - ures; • The Customs Administration enforces trade and transport sanctions at borders, with authority to detain goods and transport vehicles suspected of violations, acting in co-ordination with the FAU; and • The Ministry of Industry and Trade (Licensing Administration) regulates the export, import, and transit of dual-use and military goods to ensure compliance with international embargoes and export control regimes. 2.2 Enforcement 2.2.1 Enforcement Responsibilities The enforcement of international sanctions is struc - tured around a co-ordinated dual-track system, dis - tinguishing between administrative (regulatory) and criminal enforcement. Administrative and Civil Enforcement The FAU is the primary authority responsible for administrative enforcement and overall co-ordina - tion. To enforce compliance, the FAU is authorised to impose administrative and/or coercive fines. Other specialised administrative authorities enforce sanc - tions within their specific domains as mentioned in
2. Overview of Regulatory Field 2.1 Primary Regulators
The Financial Analytical Office ( Finanční analytický úřad : FAU) is the central administrative authority and national co-ordinator for implementing international sanctions in the Czech Republic, managing asset freezing, processing exemption applications, enforc - ing compliance and imposing fines.
2.1 Primary Regulators . Criminal Enforcement
Criminal enforcement is triggered when a violation constitutes a criminal offence. The Police of the Czech Republic, specifically the National Centre for Com - bating Organised Crime (NCOZ), investigate these
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