Draft of a New Act on Registration of Beneficial Owners

The Ministry of Justice of the Czech Republic prepared a draft of a new Act on Registration of Beneficial Owners of Legal Entities. The Draft implements the so called 5^th AML directive (Directive EU 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU) that aims to secure that the information regarding the beneficial owners will be published and that introduces penalties in case the obligations regarding the identification of the beneficial owners will not be fulfilled.

The Register of Beneficial Owners should be public and a legal entity can be imposed a fine up to CZK 500,000 if the legal entity does not secure the registration of the beneficial owner or if the legal entity does not secure that the information registered in the register are in accordance with the current status.

The draft also regulates a new definition of the beneficial owner and extends the range of the information that have to be registered.

The planned date for the entry into force of the Act is on December 1, 2020. The information registered in the Register will have to be brought in line with the new requirements within 6 months after the Act will come into force.