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New Anti-Money Laundering and Anti-Terrorist Financing Legislation

The Act on Some Measures against Money Laundering and Terrorist Financing (effective since 1 September 2008) responds to a number of EU legislative requirements, primarily to Directive No. 2005/60 EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (the so-called 3.AML Directive).

The most significant changes include lowering the transaction value threshold for when a bank or another institution must identify the customer. The threshold is now EUR 1,000. Customer due diligence has been newly introduced, including the right to obtain information on the purpose and intended nature of a transaction or business relationship, ongoing monitoring of business relationships, scrutiny of transactions and sources of funds. In addition to the information, the customer shall be obliged to produce appropriate documents thereon.

The duty of conducting customer due diligence generally applies (i.e. in addition to explicitly predefined circumstances) to transactions amounting to EUR 15,000 or more. Stricter criteria (as compared to the former provisions) were introduced to apply to beneficiary owners or controlling parties. This means that the institutions and parties subject to the duty have the right to demand customers to provide a substantially larger amount of information to identify suspicious transactions.

The new legislation applies less strict rules (in the form of exemptions from the mandatory identification or customer due diligence) to listed companies, customers engaged in transparent business and/or relatively low-risk financial products such as life and pension insurance.

The requirements imposed by the AML Directive have a substantial impact on other legislation, especially in the area of payment and clearing systems and foreign exchange. Money transfers are newly subject to a license, unless the transferring institution holds a special authorization (such as a banking or single license, etc.). Similar provisions apply to the newly defined foreign exchange services that are subject to a license under the Foreign Exchange Act; this is why it has been deleted from the list of subject-to-concession trades under the Trade Licensing Act.

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