The Directive in question can be found here.
According to the explanatory memorandum, the aim of the law adopted last year is to properly transpose V. AML Directive and the resulting principles of transparency, especially transparency of the organisational and personal structure of legal entities. Another of its objectives is the fight against money laundering and funding of terrorism, where the register of beneficial owners, which is an electronic register of public administration, is to serve as a support tool for obliged persons in fulfilling their obligation to control their clients pursuant to Act No. 253/2008 Coll., on certain measures against the legalization of the proceeds of crime and terrorist financing (hereinafter referred as "AML Act"); thus, allows them partial public access to certain data in the register.
Previous legislation distinguished the beneficial owner on the basis of two characteristics, namely the person with ultimate influence and the ultimate beneficiary. It was this definition that was challenged by the European Commission, resulting in infringement proceedings against the Czech Republic for incorrect implementation of the Directive. Inaccurate transposition was also found in certain exemptions from the registration obligation for certain categories of persons.
In response to the requirements of the European Commission, a draft of amendment was drawn up to incorporate the points that had been criticised towards the Czech Republic. Therefore, solely partial amendments were introduced, but they can have a significant impact in terms of the definition of the beneficial owner.
The approved change in the amended wording of the Act consists in the introduction of a single material characteristic of the beneficial owner, thus abolishing the distinction between the ultimate beneficiary and persons with ultimate influence. In addition, the number of exemptions from the registration obligation has been narrowed and the irrebuttable presumption of the non-existence of a beneficial owner has been replaced by a rebuttable presumption and only for the circle of persons who are still subject to the exemption from the registration obligation. Following the narrowing of the list of exemptions under the new regulation, district and regional chambers, political parties and movements, churches and religious societies, trade unions and employers' organisations, hunting associations, and associations of unit owners must also disclose their beneficial owner.
A beneficial owner is newly defined by the Act as a person who ultimately owns or controls a legal person or other legal arrangement (group), either directly or indirectly, based on the following criteria:
According to the last point mentioned above, the person with decisive influence is no longer only a member of the statutory body but can also be other persons who are in a similar position or represent such persons, such as a guardian, insolvency administrator, or liquidator.
In conclusion, failure to comply with the obligations under this law and failure to register is sanctioned. The consequence may be the imposition of a fine of up to CZK 500,000, but also the imposition of private law sanctions, such as a ban on the payment of dividends or a ban on the exercise of voting rights.
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