Who Is Subject to the Law on the Prevention of Money Laundering and Terrorist Financing?

The Law on the Prevention of Money Laundering and Terrorist Financing prescribes that certain legal entities and entrepreneurs have specific obligations regarding customer identification, risk assessment, record-keeping, and the reporting of suspicious transactions. It is important to note that the principal registered business activity is not the sole criterion for determining whether a legal entity is subject to the Law.

OVERVIEW OF BUSINESS ACTIVITIES AND CONDITIONS

WHAT DOES THE 10,000 EUR THRESHOLD MEAN?

For business activities subject to the 10,000 EUR threshold, it is not important whether the amount is paid in a single transaction. The threshold also applies to multiple linked transactions whose combined value reaches or exceeds 10,000 EUR. For this reason, businesses should monitor related payments and receipts rather than focusing solely on individual invoices or transactions.

SPECIAL NOTE FOR CONSTRUCTION COMPANIES, REAL ESTATE AGENCIES AND ACCOUNTING FIRMS

For certain business activities, no additional monetary threshold applies.

This means that legal entities engaged in activities such as construction, the purchase and sale of real estate, real estate brokerage, property management, lending, as well as accounting, bookkeeping and auditing services, may be considered reporting entities simply by carrying out these activities.

THE REGISTERED BUSINESS ACTIVITY IS NOT THE ONLY CRITERION

A company may be registered under one principal business activity while, in practice, carrying out other activities.

If those activities fall within the scope of the Law on the Prevention of Money Laundering and Terrorist Financing, the company may be considered a reporting entity even if its principal registered activity is not listed in the table above.

For this reason, it is necessary to assess the company's actual business operations, contracts, invoices and the services it provides when determining whether the Law applies.

WHAT ARE REPORTING ENTITIES REQUIRED TO DO?

Being a reporting entity may include the obligation to:

• Prepare a money laundering and terrorist financing risk assessment;
• Adopt internal policies and procedures;
• Identify and verify customers
• Identify and verify the beneficial owner;
• Monitor business relationships and transactions;
• Maintain records and retain documentation;
• Appoint a designated compliance officer, where applicable;
• Report suspicious transactions to the competent authority;
• Provide regular AML/CFT training to employees.

The exact scope of these obligations depends on the type of business activity, the size of the legal entity, its organisational structure and the level of assessed risk.