CZECH REPUBLIC Law and Practice Contributed by: Tomas Sedlacek, Zdeněk Husták, Adam Nečas and Mikuláš Zacpal, BBH, advokátní kancelář, s.r.o.
5. AML/KYC 5.1 AML and CFT Requirements
among CNB staff, two appointed from among the Ministry of Finance staff and one appointed per the proposal of the Czech Banking Associa - tion. The Guarantee Scheme co-operates with the CNB and the Ministry of Finance. Retail deposits are essentially covered by the Guarantee Scheme under the condition that the AML/CFT KYC procedure is met. Deposits of certain persons/entities not covered by the Guarantee Scheme are claims on depos - its by: • a bank or a bank branch; • a financial institution; • an insurance company, reinsurance company; • a health insurance company; • a state, municipality, county; or • deposits representing subordinated debt and certain types of convertible debt; and • instances representing the legalisation of the proceeds of criminal activity as declared by a court. The Guarantee Scheme covers the total amount of deposits up to equivalent of EUR100,000 per customer per bank; excess amounts are not covered. The Guarantee Scheme is continuously financed by contributions paid by banks and other credit institutions established in the Czech Republic or having a local branch. The CNB annually determines the amount of these contributions in accordance with the EBA’s guidelines, taking into account the total volume of covered deposit claims and the level of risk borne by the given bank. The CNB shall publish the rate of contribu - tions for the period in question.
General obligations arising from the AML Act, which implements the EU AML/CFT regula - tion, also apply to banks. Banks shall carry out customer identification and screening while commencing their business relationship with customers (the KYC process). Such screening includes the verification of whether the customer is listed on any sanction lists. Banks are required to report any suspicious transactions to the competent authority (the Financial Analytical Office). Employees of the bank are required to pass AML/CFT training annually. Banks are required to establish governance arrangements that address the AML procedures and control measures. Details of this governance system are covered by the Decree on certain requirements for AML/CFT internal systems. The Financial Analytical Office also issues guide - lines and Q&As providing a detailed interpreta - tion of the individual AML obligations. 6. Depositor Protection 6.1 Deposit Guarantee Scheme (DGS) The deposit guarantee scheme in the Czech Republic is provided by the Financial Market Guarantee System established under the RPCR Act (the “Guarantee Scheme”). The Guarantee Scheme manages the assets of the Deposit Guarantee Fund, Resolution Fund and the other assets of the Guarantee Scheme separately in terms of assets and accounting. The Guarantee Scheme is administered by a five-member board of directors, with two members appointed from
160 CHAMBERS.COM
Powered by FlippingBook