The area of anti-money laundering in the Slovak Republic is the subject-matter of the legal regulation contained in the Act no. 297/2008 Coll. on Protection against the Legalization of Proceeds from Crime and on the Protection against the Funding of Terrorism (hereinafter referred to as the “AML Act”). This area is largely influenced by the law of the European Union, which has already adopted several harmonization directives in this respect; the last of these directives was the European Parliament and Council (EU) directive No. 2015/849 (hereinafter referred to as the “4th AML Directive”). It was implemented into Slovak law through Act No. 52/2018 Coll., which directly amended the AML Act.

Although the initial transposition deadline for the 4th AML Directive was 26 June 2017, most member states (including Slovakia) failed to meet it; the Slovak amendment was partially effective as of 15 March 2018 and several provisions will only come into effect in the near future, as of 1 November 2018.

OBLIGED ENTITIES AND THEIR DUTIES

The legal regulation in the AML Act primarily lays down set of obligations which concern certain obliged entities. An exhaustive precise list of obliged entities incorporated into the AML Act can generally be described as very broad – some estimates amount to more than half a million subjects in Slovakia. These include, for example, banks, insurance companies, central securities depositories, stock exchanges, financial agents and advisors, auction companies, insolvency administrators, enforcement agents, auditors, accountants or tax advisers. The amendment aimed to clarify the mentioned circuit. For some types of entities, such as a attorneys or a public notaries, the amendment clarified the fact that they only become obliged entities in the performance of certain specific activities. In the case of the mentioned (attorneys and a public notaries), this is the case when providing a legal service related to a financial operation or other action aimed at the movement of funds (or, if this action is directly triggered by such a move) in the exhaustively listed range of activities; this includes, for example, transfer of ownership of real estate or business, administration or custody of funds or other assets, establishment of a bank account and its administration, or establishment, operation and management of a legal entity (especially a business corporation).

A liable entity within the meaning of the AML Act is also any legal person or natural person – entrepreneur when performing cash transactions in the amount of at least EUR 10,000 (this threshold was lowered from the previous of EUR 15,000), regardless of whether such person is on the above-mentioned list of obliged persons.

The AML Act imposes mandatory obligations on the persons concerned through three different regimes, depending on the specific circumstances. These are the so-called basic customer due diligence, simplified customer due diligence and enhanced customer due diligence. Each of these imposes a different degree and difficulty in the measures that the obligated person must implement.

Applying the basic due diligence became obligatory in the case of transactions with a value of at least EUR 1,000. The obligation in question involves, in particular, identification of the client and its beneficial owners.

REGISTRATION OF BENEFICIAL OWNERS

The 4th AML directive and the amendment introduce a new registration obligation for all legal entities that are not public bodies. These subjects shall be obliged to register their beneficial owners into the non-public part of the relevant register; mainly into a Commercial Register, a Register of Foundations, a Register of Non-investment Funds or a Register of Non-profit Organizations. This obligation will affect, in particular, business corporations. In the case of companies established before 31 October 2018, they shall be obliged to carry out this registration by 31 December 2019. In the case of newly registered companies from 01 November 2018, the beneficial owners have to be registered simultaneously as soon as the company itself is first registered. All obligated entities are required to have their beneficial owners identified and maintained in their files from 15 March 2018, so this registration should represent the transfer of such existing data into the Commercial Register. As stated, these information should not be publicly accessible. However, certain public authorities and obliged persons will be entitled to require the data in specific situations.

As it is known, the Slovak Republic was one of the first EU countries to introduce its own beneficial owners register. Since 01 February 2017, the previous register maintained by the Public Procurement Office has been replaced by the new Registry of Public Sector Partners, headed by the District Court of Žilina; this registration is a legal condition in relation to of several types of trading with the state and the public sector (in particular public procurement). The aforementioned registration of beneficial owners in the Commercial Register shall not affect the registration obligation within the Register of the Public Sector Partners.

CONCLUSION

The changes can be considered an intermediate step within the established trend. In the meantime, the 5th AML directive has entered into the on 9 July 2018, with the implementation deadline for member states of 10 January 2020. It will include, for example, public access to beneficial owners registers. We can expect further legislative development in the mentioned areas even within the Slovak Republic.