Czech Republic strengthens anti-money laundering measures, but shortcomings remain

In a follow up report on the Czech Republic, the Council of Europe’s anti-money laundering body MONEYVAL concludes that the country has improved measures to combat money laundering and terrorist financing, but still needs to make progress in certain areas.

Since the adoption of its mutual evaluation report in December 2018 the Czech Republic is reporting to MONEYVAL on an expedited timetable (MONEYVAL’s enhanced follow-up procedure) due to the high number of deficiencies identified in several key areas. The follow-up carried out by MONEYVAL has examined a range of legislative, regulatory and institutional measures implemented by the Czech Republic to address these deficiencies.

MONEYVAL notes progress and assigns the Czech Republic higher international compliance ratings in three key areas: the improvement of mechanisms for national cooperation and coordination to tackle money laundering and terrorism financing (ML/TF); the strengthening of countermeasures against countries and jurisdictions which represent a high ML/TF risk; and the removing of regulatory gaps for correspondent banking relationships, which will ensure greater transparency for bank-to-bank transactions.

At the same time, MONEYVAL considers that the Czech Republic had not made sufficient efforts to upgrade its ratings in two areas: financial sanctions related to terrorism, and mechanisms to track the movement of cash across borders.

The follow-up report also finds that the Czech Republic has achieved some progress in the implementation of new international requirements for virtual assets, which includes virtual currencies (e.g. Bitcoin, Ethereum) and the providers of these assets.

To date, the Czech Republic has reached a level of full compliance with five of the 40 Financial Action Task Force (FATF) Recommendations, which constitute the international AML/CFT standard. The country still has minor deficiencies in the implementation of another 24 Recommendations, and larger-scale deficiencies for the remaining 11.

MONEYVAL decided that Czech Republic will remain in the enhanced follow-up process and will continue to report back to MONEYVAL on further progress to strengthen its implementation of AML/CFT measures.

Source: Council of Europe