SLOVAKIA: Revision of the Anti-Money Laundering Act

The Government approved and submitted to Parliament a proposal amending Act No. 297/228 Coll., on the protection against the legalization of income from crime and on the protection against financing of terrorism, and on amendment to certain acts as amended, and amending certain acts (hereinafter referred to as “AML Revision”). The main purpose of the AML Revision is the transposition of Directive (EU) 2015/849 of the European Parliament and the Council (hereinafter referred to as “Directive”), consideration of the recommendation of the Moneyval Committee of the Council of Europe and the recommendation of the Financial Action Task Force of the G7 (FATF), and the implementation of Regulation (EU) 2015/847 of the European Parliament and the Council, as well as the response to the requirements of application practise.

The AML Revision takes into account the principle of assessing the risks of legalization and the financing of terrorism not only at the level of legal persons but also at a European level. In accordance with the Directive, the role of the gestor responsible for the national assessment of these risks (identification, evaluation and understanding and the subsequent adoption of appropriate measures) as well as cooperation of other institutions becoming modified. Such intention of the Directive is to portray the conditions for the provision of care in relation to the client (basic, simplified and increased). Due to the accusation of inadequate obligations of care in relation to the client in the existing case of low risk by Moneyval Committee of the Council of Europe, the AML Revision sets out the minimum measures that the liable entity will undertake in the case of simplified care in relation to the client (instead of none). The extent of such increased care has also spread to “politically exposed persons” (holding a public function abroad as well as on the territory of the Slovak republic).

Also, the obligation to determine the beneficial owner in the exercise of basic care, has been established as mandatory. Regarding the identification of the beneficial owner, the concerned person will be obligated to record the identification details for a period of five years after the termination of the beneficial owner status. Another significant change is the reduction of the limit for the entity to be included to obligors to a minimum of EUR 10,000, for exercise of basic care in cases of cash trade to a minimum of EUR 10,000 (gambling to a minimum of EUR 2,000), for values set for the obligation to perform the identification of the client to a minimum of EUR 1,000. Furthermore, according to the recommendation of FATF and Moneyval Committee of the Council of Europe, the obligations for property association will be tightened by introducing an obligation of identification of donors, who have donated a value in the amount of at least EUR 1,000.

Additionally, AML Revision regulates the conditions for the imposition of fines for administrative offenses, prolongs the subjective term for imposing them from one to three years, and increases the requirements for cooperation by supervising authorities.

By amending certain acts, there is a transposed obligation for Member States to ensure that legal entities operating in their territory obtain and have adequate, accurate and up-to-date information on who owns them, including the ownership interest holding by beneficial owner (“ultimate beneficial owner”).

The reason for the amendment of acts governing the regime of the establishment of certain legal entities, namely the introduction of the condition of beneficial owner data registration to registers of concerned legal entities, which serves as the source registers for the register of legal persons, entrepreneurs and public authorities, is to increase the transparency of ownership of the legal entities and the preservation of information about the beneficial owner in central registry. In relation to business companies, a new obligation to register beneficial owner data in Commercial register will arise.

The general effectiveness of AML Revision is proposed for 1 March 2018 and the effectiveness of Articles II-IV for 1 July 2018.