As part of their anti-money laundering obligations, companies are required to appoint a so-called contact person who will ensure the constant connection with the Financial Analytical Office (FAÚ), as well as to authorise a member of the statutory body responsible for compliance with obligations and record-keeping regarding anti-ML/TF measures in writing. This is provided for in articles 18, 22 and 22a of Act No. 253/2008 Coll., on Certain Measures against the Legalization of the Proceeds of Crime and the Financing of Terrorism (also known as the “Anti-Money Laundering Act” or the “AML/CFT Act”).
The information in this article applies only to the activities of companies registered and operating in the Czech Republic. At the same time, 90% of the information applies to other EU jurisdictions.
General information about an authorised person
Companies that are legally required to comply with AML/CFT legislation must notify the Financial Analytical Office of the appointment of the relevant contact person within 60 days.
In the case of replacing a contact person and another appointment, it is necessary to notify the department within 30 days. This notice must contain the name, surname, position, and all the contact details of the new contact person.
It is worth noting that according to the AML/CFT Act, the contact person of a financial institution (e.g. a mini-fund under § 15 of the ISIF Act) cannot be a member of the statutory body (except for when it is justified by the nature and area of the obliged person`s activities).
In addition, employees responsible for the conclusion and legal regulation of transactions or employees engaged in internal audits (unless justified by the nature and area of the obliged person’s activities) cannot be appointed to this position.
We recommend that you check whether a particular employee can be assigned as a contact person with the Financial Analytical Office (FAÚ) in each case.
Contact person and their obligations
One of the responsibilities of the contact person is to ensure an actual connection with the FAÚ. According to § 18 of the AML/CFT Act, such a link means notifying the supervisory authority when each suspicious transaction is detected.
One person can act as a contact person for only one company at a time.
Authorised person and their obligations
The authorised person responsible for ensuring compliance with anti-money laundering obligations under the AML/CFT Act can only be chosen and appointed from among the members of the statutory body. If there is only one member in the statutory body (for example, the managing director), then this person must be an authorised person by law. If there are several members in the statutory body, the authorised person may be selected from among them, and his powers must be delegated in writing.
The authorised person is responsible for complying with all AML obligations, including:
- Ensures the availability of internal regulatory documents system;
- Ensures the availability of a risk assessment system;
- Monitors the relevance of documentation;
- Identifies and monitors customers;
- Trains staff, etc.
What are the consequences of not having an authorised person and a contact person?
The company’s failure to designate a contact person to ensure the constant connection with the FAÚ or to authorise a person required to monitor compliance with the AML/CFT Act in writing may result in a fine of 1 million CZK.
Failure to comply with the abovementioned requirements may also result in additional secondary risks arising from improper compliance with AML/CFT obligations. It puts the company at risk not only of a reputational nature but also attracts unwanted attention from fraudsters, leading to increased regulatory oversight and additional fines.