Who is an Obliged Entity?

Who is an obliged entity under the Czech AML Act? 

It is any entity that is defined in Article 2 (1) and (2) of the AML Act. There are three types of obliged entities:

• The financial sector - credit and financial institutions (Article 2 (1) (a) and (b) of the AML Act) and foreign entities operating in the Czech Republic within the financial sector.
• Non-financial sector - eleven categories of obliged entities (Article 2 (1) (c) to letter (m) of the AML Act) and foreign entities operating and doing business in the Czech Republic within these eleven categories.
• Other – obliged entity is also any entrepreneur (natural or legal entity) for a cash transaction in an amount of EUR 10 000 or more and legal entity established for non-business purposes which carries out an activity falling within the financial or non-financial sector or for a cash transaction in an amount of EUR 10 000 or more (Article 2(2) of the AML Act)

The common characteristic of all three groups (except for the single category of Section 2 (2) (d) in the third group) is business activity (this also includes activities carried out in a similar manner, e.g. the practice of law). 

For the financial sector, the AML Act applies to all business activities of credit institutions. The non-financial sector group is divided according to the type of activity carried out, and therefore, for such an entity, the AML Act will apply only to this type of activity and not to other activities.

All obliged entities are part of the AML/CFT system in the Czech Republic and are therefore subject to certain obligations and required to follow certain procedures in practice imposed by the AML Act.