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Czech Republic: improvement in fighting money laundering and terrorist financing

Strasbourg 8 December 2021
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Czech Republic: improvement in fighting money laundering and terrorist financing

The Czech Republic has improved the measures to combat money laundering and terrorist financing, demonstrating substantial progress in its level of compliance with the Financial Action Task Force (FATF) standards, according to a follow-up report by MONEYVAL published today.

In an evaluation report adopted in 2018, MONEYVAL requested the Czech authorities to report back on progress to address several shortcomings under the enhanced follow-up procedure.

The new assessment looks into the Czech Republic’s sanctioning regime for breaching preventative measures, non-profit organisations, the reporting obligation, tipping-off and compliance of designated non-financial businesses and professions with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations. MONEYVAL has examined a range of legislative, regulatory, and institutional measures implemented by the Czech Republic in these areas.

Considering the steps taken by the authorities, MONEYVAL has decided to upgrade the compliance ratings of the Czech Republic from “partially compliant” to “largely compliant” for five FATF recommendations and from “partially compliant” to “compliant” for one FATF recommendation.

Although the country is making commendable progress to address most of the technical compliance deficiencies after the adoption of the mutual evaluation report, more efforts remain necessary to fully implement international standards.

The Czech Republic has achieved full compliance with six of the forty FATF recommendations constituting the international AML/CFT standard. Minor deficiencies remain in the implementation of twenty-nine Recommendations where it has been found “largely compliant”. Five Recommendation (targeted financial sanctions, virtual assets, cash couriers and maintenance of statistics) remain “partially complaint”. The Czech Republic has no “non-compliant” ratings.

Due to MONEYVAL procedural limitations, the follow-up report studies the formal changes in the legislative, regulatory and institutional framework but does not assess the degree to which these reforms have been effectively implemented in practice.

The Czech Republic is expected to report back to MONEYVAL on further progress to strengthen its implementation of AML/CFT measures in one year.