INFORMATION FOR CLIENTS REGARDING THE ATTORNEY’S OBLIGATIONS UNDER THE ACT ON CERTAIN MEASURES AGAINST THE LEGALIZATION OF PROCEEDS OF CRIME AND TERRORIST FINANCING (SO-CALLED “AML ACT”)
Before providing legal services that fall under so-called monitored activities, we are obliged to inform the client of the obligations arising from Act No. 253/2008 Coll., on certain measures against the legalization of proceeds of crime and terrorist financing (hereinafter the "AML Act").
Monitored activities include in particular:
- escrow of money,
- escrow of securities or other client assets,
- acting on behalf of or for the account of the client in: purchase/sale of real estate or a business company, management of money, securities, business shares, or other property, establishing/managing/operating a business company, collecting, making payments, transfers, deposits, or withdrawals.
Information collected about the client, their transactions, and other activities must be relevant to the services provided or transactions conducted.
We are required to identify the client in the following situations:
- if the transaction exceeds 1,000 EUR,
- in the case of a suspicious transaction,
- upon establishment of a business relationship,
- conclusion of a escrow agreement,
- purchase or acceptance of cultural monuments, items of cultural value, used goods, or goods without proof of origin for the purpose of brokering their sale, or
- accepting items as collateral.
Client identification is conducted:
- for a natural person or a natural person acting on behalf of a legal entity,
- always in person during the first identification.
For natural persons, we verify:
- a valid ID (type, number, issuing country, validity period),
- consistency of appearance with the photo on the document.
We are obliged to record these details.
For legal entities:
- we record data from a document proving its existence (e.g., an extract from the Commercial Register not older than 3 months),
- and simultaneously identify the natural person acting on its behalf as described above.
If the client is represented:
- by an authorised representative, we identify the representative (as above) and require the power of attorney,
- by a legal guardian, we identify the guardian and require supporting documents regarding the represented person.
As part of the identification process, we also determine and record whether the client is a politically exposed person or a person subject to international sanctions by the Czech Republic under Act No. 69/2006 Coll., on the Implementation of International Sanctions.
For further transactions with the same client or ongoing business relationships, we only verify the validity and completeness of previously collected data.
Mediated Identification
At the client's request or at our own initiative, identification can also be carried out via a third party. This may be done by a notary or a public administration contact point (Czech POINT). However, we must receive the original official document of identification, not a copy or electronic version.
Client Due Diligence
Client due diligence is an ongoing process intended to protect the client from potential illegal activity. This requires the client's active cooperation, particularly in submitting appropriate documents or declarations for specific transactions. If the client refuses to cooperate, we are not obliged to take on their case. If, after reviewing the case, there are still doubts about a potentially suspicious transaction, we are obligated to report it.
We are required to perform due diligence:
- for one-off transactions valued at 15,000 EUR or more,
- in transactions with politically exposed persons,
- in transactions with entities from high-risk countries (especially as designated by FATF),
- in suspicious transactions, and at the beginning and during a business relationship,
- upon entering into a excrow agreement,
- in cash transactions from 10,000 EUR and above.
Due diligence is not required if we:
- provide legal advice,
- defend the client in criminal proceedings,
- represent the client in court proceedings.
Client due diligence includes:
- obtaining information on the purpose and intended nature of the transaction or relationship,
- identifying the ownership and control structure of the client and the beneficial owner if the client is a legal entity, trust, or similar arrangement, and taking steps to verify the identity of the beneficial owner,
- ongoing monitoring of the business relationship, including reviewing transactions to ensure they are consistent with our knowledge of the client and their business and risk profile,
- examining the source of the client’s funds or other property involved in the transaction or business relationship,
- in the case of politically exposed persons, taking appropriate steps to establish the origin of their assets.
If the client refuses to be identified, does not present a power of attorney as required under § 8(6) of the AML Act, or does not cooperate with the due diligence process, we are required to refuse the transaction, not take the case, or terminate the client relationship.
We retain data obtained during client due diligence for 10 years from the end of the client relationship or the execution of the transaction. This period begins on the first day of the calendar year following the year when the last known transaction was carried out.
The stored data includes in particular:
- copies of identification documents (if obtained),
- details of who and when carried out the first identification,
- information and copies of documents obtained during due diligence, documents justifying an exemption from identification and due diligence,
- if the client is represented, the original or certified copy of the power of attorney or court decision on the appointment of a guardian, and data and documents related to transactions that required identification.
If, in the course of monitored activities, we identify a suspicious transaction within the meaning of § 6 of the AML Act, we are required to report it via an authorised member of the Czech Bar Association's Supervisory Board within 5 calendar days from the day the suspicious transaction was identified. This obligation only applies if we are performing monitored activities as defined by the AML Act.
This document is valid from 1 June 2025.
JUDr. Robert Hošťálek, attorney-at-law