Russia’s invasion of Ukraine has exposed a long-unresolved problem where representatives and allies of organised crime, terrorist groups and hostile powers can easily operate and do business in Czechia and EU, launder money and even draw public money. It is high time that this was prevented.
We are pushing for a sanctions law against foreign persons involved in human rights abuses or money laundering for relatives of dictators. Under the law, it will be possible to freeze assets of these people and their companies or to deny their access to public money in contracts and subsidies.
The legislative process of the Czech equivalent of the so-called Magnitsky Act should be completed as soon as possible. It is advisable to start drawing up the national sanctions list now so that the law has
the desired effect as soon as possible. Similarly, the state’s analytical tools for mapping the influence of undemocratic regimes need to be strengthened.
According to foreign analyses, the Czech Republic is one of the most attractive countries for laundering dirty money, i.e. proceeds of crime. This can be solved by sensible regulation of the law. It should, for example, allow the siphoning off of suspicious money captured in flow-through accounts in the Czech Republic.
Compared to the original target date in the Action Plan for Preventing and Combating Money Laundering and Financing of Terrorism of 14 July 2022, it is necessary to prepare a draft legislative change much more quickly, which will solve the problem of so-called flow-through accounts and thus fundamentally reduce money laundering in the Czech Republic.
The register of beneficial owners of companies, which allows searching for information to apply sanctions, is already in place, but it is not yet relied upon. The quality of the data in the register could be strengthened, for example, by tightening sanctions for providing false data or by introducing an application for proving the ownership structure.
The government should as soon as possible prepare an analysis of the functioning of the beneficial owner register in terms of data completeness, data consistency and enforcement of sanctions. Subsequently, it should prepare a proposal for mechanisms that will lead to more accurate data in the register (e.g. using an appropriate application, introducing stricter sanctions for companies with links to undemocratic regimes, tax havens, sanctioned persons, etc.).
Bahamas, Belize, Cyprus or Malta. Everywhere, oligarchs are pouring their money to avoid paying taxes or to engage in underhand dealings. We advocate the introduction of rules to cut such people and companies off from public money.
In accordance with the government’s programme statement, the government should prepare rules as soon as possible to limit the flow of public money to companies owned by tax havens.
Real estate is a great hiding place for money, the more expensive the better. We take our inspiration from abroad and look at foreign property owners and the register of their real owners.
In accordance with the proposed European regulation, it is necessary to approve an amendment to the Act on the registration of beneficial owners, which will introduce the obligation of foreign beneficial owners of real estate to register in the Czech register under the threat of a corresponding fine.
The Financial Analytical Office at the Ministry of Finance is dealing with the unravelling of ownership ties and money laundries, but it has its hands full and not enough people and money. We propose to the government to strengthen this office in terms of capacity. The resources invested will be returned to the state and its citizens many times over.
We appreciate that the Financial Analytical Office has been strengthened by ten people. However, the capacity of the FAO and other authorities, where appropriate, needs to be regularly reviewed and strengthened accordingly in order to effectively uncover ownership structures and apply sanctions.
We advocate rules for transparent lobbying that will make life at least a little more difficult for those with ties to undemocratic regimes who have a habit of going to Czech politicians for various exemptions and benefits.
A workable bill on lobbying should be drafted by the end of the year to limit the scope for influence on politics by persons with links to non-democratic regimes or criminal groups.
We are a joint platform of five NGOs. In response to the events in Ukraine, we actively advocate for executive and legislative measures to strengthen the Czech Republic’s resilience to the influence of undemocratic regimes. We want more resilient Czechia!
„I decided to support the Resilient Czechia project because It matters to me that the Czech Republic is at the top of Europe in terms of Russian influence. Given the situation that arose in the spring and is still ongoing, I consider the Resilient Czechia project to be very important. I am satisfied that a number of things have already been successfully implemented.“
— Libor Winkler