The Status of the Anti-Money-Laundering Regime in the Czech Republic

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Sunday, September 1, 2002
Author: 
Trifin J. Roule and Michael Salak
Volume: 
18
Issue: 
9
353
Abstract: 
The stable financial sector in the Czech Republic is an ideal location for the placement, layering and integration of illicit profits into numerous banking and non-banking financial institutions. Money laundering was criminalized in September 1995 through the addition of Articles 251 and 251a to the Czech Criminal Code. There are three government agencies that oversee anti-money-laundering efforts in the Czech Republic. The Finance Analytical Unit (FAU) of the Ministry of Finance was established on 1 July 1996 exclusively for the purpose of combatting money laundering. The Czech National Bank (CNB), the country?s banking supervisory and licensing authority that oversees banking regulation. The Customs Administration comprises a General Directorate of Customs, Customs Directorates and Customs Offices. The Czech Republic remains a haven for organized criminal groups that launder funds generated from a variety of criminal activities, including people smuggling, and prostitution. The Republic also serves as a major drug route to Western Europe, and North America. The Czech Republic, one of the largest exporters of light weaponry, including assault rifles and machineguns, is responsible for the illegal transfer of significant amounts of weapons and military material to conflict regions. The strong desire for the Czech Republic to enter the EU presents Western agencies with a means to pressure Czech officials into strengthening anti-money-laundering efforts in the Republic.