Name
Global FinTech Guide
Country _ Name
Czech Republic
SectionTitle
KYC requirements
Body
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

In Czechia, the anti-money laundering regulation (Zákon o opatreních pro legalizaci výnosu z trestné cinnosti a financování terorismu, "AML Act") constitutes the regulatory framework regarding AML. The legal requirements usually follow those laid down in European legislation, but they also respect guidelines and recommendations of e.g. FATF.

National regulator or relevant authority for AML controls

In most cases, it is the Financial Analytical Office (Financní analytický úrad – “FAÚ"), but depending on the type of the obliged entity, some other authorities may also enjoy certain supervision powers – e.g. the CNB or the Czech Bar Association.

Customer Due Diligence

Conduct of a typical KYC identification process

Customers or clients need to be identified by the obliged company. Usually, this must take place before the business relationship is established.

According to Section 5 of the AML Act, during KYC identification, the following identification data must be obtained:

- in the case of a natural person:

  • all names and surnames;
  • the birth identification number or, should the person have no birth identification number, the date of birth;
  • gender;
  • place of birth;
  • address of permanent or other residence; and
  • citizenship; 

- in the case of a natural person acting as an entrepreneur all of the above and also:

  • business name including its title indicating the legal form or other titles;
  • registered office; and 
  • the business identification number;

- in the case of a legal person:

  • the legal person's essential identification data, which is its company name or title including appendices indicating its legal form or other titles, its registered office, and its company number or similar identification number is given pursuant to the respective foreign legislation;
  • data necessary to identify and verify the identity of natural persons who are members of its governing bodies; and 
  • essential identification data of a legal person, which is a member of its governing body, and data necessary to identify and verify the identity of a natural person who is a member of the governing body of such legal person or who was authorized by the said legal person to represent it in the governing body;

-in case of a trust:
 
  • the trust's name; and
  • identification data of its trustee.

Usually, the identification procedure must be conducted in person. However, several other options may be used, especially in the case of natural persons, e.g. (i) electronic identification means with the assurance level high according to eIDAS, (ii) bank identity or (iii) combination of electronic copies of two identification documents and transfer of micro-payment.

Video identification (or other such solutions) is currently not allowed unless it is a case with potentially lower AML risks, and thus so-called simplified KYC identification may be applied.

Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

Yes, customer due di

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