CZECH REPUBLIC Trends and Developments Contributed by: Filip Čabart, Štěpán Černý, Filip Šperl and Lukáš Janečka, HAVEL & PARTNERS
Where to next? Unfortunately, the Czech Supreme Court decision did not specifically address whether the private law sanc- tions mentioned above should also be suspended until the Czech AML Act is appropriately amended. This would seem consistent with the grounds for the decision, but some, especially those on the more con- servative side, may prefer to wait for a specific court decision to confirm this. However, the Czech AML Act should be amended by 27 July 2027 at the latest to comply with the new European AML Package.
consequently been amended by a new directive, requiring any person seeking access to demonstrate a legitimate interest. However, the Czech legislator has not implemented this change in the Czech UBO Act. Consequently, anyone can still access the Czech Beneficial Ownership Register via the relevant website and obtain information about UBOs, including their name, country of residence, year and month of birth, nationality and position within the registering entity. This situation led to a dispute that was decided by the aforementioned Czech Supreme Court ruling. While the Czech UBO Act is awaiting amendment, the relevant entity is still obliged to register the UBO, but sanctions to enforce this obligation are excluded. It could be argued that the same should apply to private law sanctions. These can, under certain conditions, consist of the relevant person being unable to exercise rights in the company’s supreme bodies or receive any share of profits, equity or liquidation proceeds. Implications for financing In several cases it was discovered that a Czech com- pany that should have provided security for a facility had failed to fulfil its obligation to keep the UBO regis- tration in the Czech Beneficial Ownership Register up to date. While it is easy to verify whether a company has registered its UBO at all, it may be more difficult to discover whether the registered information is up to date, despite what the company’s management may believe. This could jeopardise transaction deadlines, since it becomes necessary to update the UBO registration. Otherwise, the Czech company will (under certain conditions) be unable to adopt corporate resolutions approving the provision of security.
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