CZECH REPUBLIC Trends and Developments Contributed by: Jan Kohout and Illia Antonov, PRK Partners
The export-oriented economy: risks and vulnerabilities
achieved in recent years, in close co-operation with other European countries, the nuclear energy sector presents a more stubborn challenge. The Czech Republic operates six nuclear reactors at two sites – Dukovany and Temelín – which together account for more than one third of the country’s elec - tricity generation. Both plants were originally built to Soviet design and, for decades, were entirely depend - ent on fuel supplied by the Russian state-owned sub - sidiary of Rosatom. The Temelín plant, whose reactors had previously operated with non-Russian fuel, suc - cessfully transitioned back to Westinghouse-supplied fuel assemblies in 2024, with Framatome joining as a second supplier in 2025. For the Dukovany plant, however, the transition has been more protracted. Although a contract for fuel supplies was signed with Westinghouse in 2023 and the first new fuel assem - blies arrived in June 2025, the plant’s existing contract with the Rosatom’s subsidiary runs until 2028, and full fuel replacement cannot be achieved before then. The nuclear fuel question has required the deployment of numerous exemptions and derogations under the EU sanctions regimes. Unlike oil and gas, nuclear fuel has remained largely outside the scope of sanctions, a reflection of the technical complexity of fuel replace - ment for Soviet-designed reactors and the divergent positions of member states. The European Commis - sion only began to address restrictions on Russian nuclear fuel imports in a limited manner in May 2025. The financial flows involved are far from trivial: between February 2022 and the end of 2025, the Czech Repub - lic imported Russian nuclear fuel worth approximately CZK19 billion – a sum that exceeds the combined value of Czech humanitarian aid and military equip - ment provided to Ukraine over the same period. These payments flow to the Rosatom consortium responsi - ble for the development, production and maintenance of Russia’s nuclear arsenal. The ongoing transformation of the Czech nuclear energy sector, encompassing both fuel diversification and the major modernisation and expansion project at Dukovany, has made independence from Russian sources and deliveries a central policy objective.
The Czech Republic possesses one of the most export-oriented economies in the European Union, situated at the geographical heart of the continent. This structural characteristic generates a uniquely broad exposure to sanctions-related risks. Traditional industrial exporters – particularly in mechanical engi - neering, heavy machinery and metallurgy, sectors in which the Czech Republic has long been internation - ally competitive – were the first to feel the impact of sectoral sanctions and export controls. They now face unprecedented compliance challenges, including the need to screen not only end-users and end-uses but also intermediate consignees, freight forwarders and financial intermediaries across increasingly complex supply chains. Beyond the classic industrial base, the service sector has been drawn into the compliance net. Law firms, accountants, tax advisers, management consult - ants and a wide range of trade intermediaries must all now maintain robust sanctions screening and risk assessment procedures. The compliance bur - den is particularly acute for small and medium-sized enterprises, which often lack the dedicated in-house resources that larger corporations can deploy. Online businesses and start-ups – a growing segment of the Czech economy – face a particular set of risks: the ease with which digital services can be accessed from sanctioned jurisdictions, the difficulty of geolocation- based controls and the increasing sophistication of circumvention attempts create vulnerabilities that the current generation of compliance tools is not always well-equipped to address. The pressure is compounded by the growing number of attempts by designated or otherwise concerned persons to misuse legitimate Czech corporate struc - tures, financial institutions and intermediaries for the purpose of circumventing sanctions. This has in turn driven a heightened level of vigilance across the com - pliance community and reinforced the importance of proactive, intelligence-led compliance programmes that extend well beyond simple list screening.
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