Table of contents
- What is FIU administrative supervision and who is subject to it?
- How does an FIU inspection start?
- Which documents does the FIU request before inspection?
- How does the on-site inspection itself work?
- What deficiencies does the FIU most often find in practice?
- Remedial measure vs. fine: what is the difference?
- What may happen after inspection — overview of sanctions
- Special rules for lawyers, notaries, auditors and tax advisers
- Checklist: how to prepare for an FIU inspection in 1 day
- Frequently asked questions about FIU inspections
What is FIU administrative supervision and who is subject to it?
The FIU is, under applicable AML legislation, the main supervisory authority for AML compliance in the Czech Republic. FIU administrative supervision applies to most obliged entities in the non-financial sector, including real estate agents, accountants, tax advisers, trust and company service providers, gambling operators and other entities listed in applicable AML legislation.
Since 1 May 2024, administrative supervision has been based on a risk-oriented approach. The FIU does not inspect all obliged entities across the board. It focuses its capacity on entities where risk assessment indicates a higher probability of deficiencies or misuse. Inspections are not limited to internal policies that must be notified to the FIU. The FIU may also request written internal policies from obliged entities that do not have a duty to notify them, such as real estate intermediaries or TCSPs.
Credit and financial institutions are primarily supervised by the Czech National Bank. Selected professions follow a special procedure through professional chambers, summarized in section 8.
How does an FIU inspection start?
An inspection always starts with a notice of commencement of an on-site inspection, delivered by the FIU to the obliged entity's data box. The inspected person is therefore informed in advance.
The notice usually includes a request to submit documents. The FIU asks for selected materials in writing before the on-site inspection itself, typically within a short deadline measured in working days.
The request is based on applicable AML legislation. On the FIU's instruction, an obliged entity must provide information and submit documents needed for administrative supervision within the deadline set by the FIU.
Practical note: If the FIU requests internal policies or a risk assessment and you are an obliged entity that is not legally required to prepare these documents in writing, it is advisable to expressly point this out and cite the legal basis. The FIU may request internal policies even where written policies are not mandatory, but the obliged entity should not face a fine merely because voluntary written policies do not exist.
Which documents does the FIU request before inspection?
The scope of requested materials differs case by case. In practice, the FIU usually asks for these categories of documents:
Internal AML documentation
- current internal policies, including previous versions and dates of changes
- current ML/TF risk assessment, including previous versions
- all internal methodologies, instructions and guidelines related to AML/CFT
Client and operational agenda
- overview of transactions reviewed for suspicion of money laundering or terrorist financing during the inspected period that were not reported to the FIU
- list of all clients classified as “risky” as of the requested date, including the reasons for that classification (Section 21a(1) of the AML Act)
Personnel documentation
- records of employees who could encounter suspicious transactions during the inspected period, including name, surname, position, date of commencement and, if applicable, date of termination or interruption
Training documentation
- records of AML training completed during the inspected period, especially content, date and list of participants
How does the on-site inspection itself work?
After receiving and assessing the submitted materials, the FIU proceeds with an inspection directly at the obliged entity's registered seat or establishment. FIU inspectors are authorized to:
- enter the premises of the obliged entity and inspect documents
- request oral or written explanations of specific processes
- review selected client files, records of client identification and due diligence, suspicious transactions and how they were assessed
The inspection is especially burdensome where the AML agenda is not managed systematically. Inspectors assess not only whether documents formally exist, but mainly whether procedures are actually used in practice: whether employees can describe what to do when a suspicious transaction appears, whether client risk profiles are maintained consistently and whether internal policies reflect the company’s real business model.
Keep your AML agenda ready for an FIU inspection at any time
AML PROOF keeps client identification, risk assessment, PEP screening and training records in one place, with an audit trail that meets FIU expectations.
What deficiencies does the FIU most often find in practice?
FIU supervision results and Methodological Guidelines No. 6 and No. 11 repeatedly show the following categories of deficiencies:
Deficiencies in internal policies
- the policies are template-based and not individualized, so they do not reflect the obliged entity’s actual business model
- the policies are not updated after legal changes or new FIU methodological guidance
- the policies were prepared by an external specialist without the obliged entity’s involvement and without ensuring updates
Deficiencies in client due diligence
- the nature of the client’s business is not established (Section 9(2)(a) of the AML Act); it is not enough to write only “entrepreneur” or “employee”
- the source of funds (Section 9(2)(e)) is not established at the beginning of the business relationship, but only retrospectively, or not at all
- identification is performed properly, but ongoing client monitoring is missing
Deficiencies in risk assessment
- the risk assessment is outdated or missing entirely
- risk categorization is not justified and cannot be evidenced
Deficiencies in training
- training is not regular or records are missing (Section 23 of the AML Act)
- training content does not correspond to current internal policies
Remedial measure vs. fine: what is the difference?
An inspection does not automatically end with a fine. The AML Act distinguishes between two types of FIU responses to identified deficiencies.
A remedial measure (under the AML Act) is the milder tool. The FIU orders the obliged entity to remove the deficiency within a reasonable deadline. The obliged entity must inform the FIU about completion without undue delay, no later than 10 days after the deadline expires.
Failure to comply with a remedial measure is itself an offence under Section 47a of the AML Act and may be sanctioned by a fine up to the same amount as the original offence. Failure to notify completion of the measure is another offence punishable by a fine of up to CZK 1,000,000.
A fine as an administrative penalty applies when the FIU opens offence proceedings. The amount depends on the specific provision breached.
What may happen after inspection — overview of sanctions
| Offence | Basic fine range |
|---|---|
| Failure to introduce or apply internal policies (Section 48(1)) | up to CZK 10,000,000 |
| Failure to prepare written internal policies (Section 48(2)) | up to CZK 1,000,000 |
| Failure to prepare or update a risk assessment (Section 48(4)) | up to CZK 1,000,000 |
| Failure to ensure employee training (Section 48(6)) | up to CZK 5,000,000 |
| Failure to identify or conduct due diligence on a client (Section 44) | up to CZK 10,000,000 |
| Failure to report a suspicious transaction (Section 46) | up to CZK 5,000,000 |
| Failure to comply with a remedial measure (Section 47a) | up to the amount of the fine for the original offence |
For serious, repeated or systematic breaches, the fine ranges increase. For non-financial institutions, they may reach CZK 30,000,000; for financial institutions, up to CZK 130,000,000 or 10% of annual turnover.
In addition to a fine, the decision may be published on the FIU website for 5 years after it becomes final. In practice, this may be more painful for many obliged entities than the fine itself.
If the FIU finds a particularly serious or repeated breach, it may submit a motion to withdraw the business authorization to the competent authority, such as a trade licensing office or chamber.
A decision imposing a fine may be appealed as an ordinary remedy in administrative proceedings.
Special rules for lawyers, notaries, auditors and tax advisers
These professions are subject to a specific supervision regime. The FIU does not primarily carry out the inspection itself. Instead, it submits a written request to the relevant professional chamber, which performs the inspection:
- lawyers → Czech Bar Association
- notaries → Notarial Chamber of the Czech Republic
- auditors → Chamber of Auditors of the Czech Republic
- judicial executors → Chamber of Judicial Executors of the Czech Republic
- tax advisers → Chamber of Tax Advisers of the Czech Republic
The chamber must start the inspection within 60 days of receiving the FIU request and inform the FIU about the start and result within 10 working days. Only if the chamber fails to start the inspection within that deadline may the FIU carry out the inspection itself.
This rule is not absolute. The FIU has the right to enter the premises of a lawyer or notary in the presence of the obliged entity under the conditions set by the AML Act, especially where the information is not subject to statutory confidentiality.
Checklist: how to prepare for an FIU inspection in 1 day
Received a notice? Go through this checklist immediately:
Documents — check existence and currency
- Internal policies are prepared where required, dated and reflect current law
- ML/TF risk assessment is current and individualized for your business
- All previous versions of internal policies and risk assessments are available with dates of changes
Client agenda
- You have a list of risky clients with reasons for their classification
- Client files document PEP screening results and ESM checks
- Sources of funds and nature of business are recorded for each client
- You have an overview of transactions where suspicion was considered, including those not reported to the FIU
Training
- Training took place in the last 12 months
- There is evidence of participation and content (Section 23(4) of the AML Act, at least 5 years)
- New employees were trained before starting the relevant position
Personnel overview
- You have a list of all employees and collaborators who could encounter suspicious transactions, including start and end dates
Organization
- An FIU contact person is designated and notified within the statutory deadline
- An AML responsible person is appointed in writing under Section 22a, where applicable
Do not let an FIU inspection surprise you — keep the audit trail ready
AML PROOF stores records of identification, client due diligence, PEP screening and training in one system ready to be presented to the FIU at any time.
Frequently asked questions about FIU inspections
How does the FIU decide to inspect me?
The FIU selects inspected entities based on risk analysis that considers the national risk assessment, supranational risk assessment and sector profiles. An inspection may also be triggered by a report from another institution, another obliged entity or the FIU's own analytical work.
Can the FIU arrive without prior notice?
A standard on-site inspection starts with a notice delivered to the data box. The AML Act does not provide for a surprise inspection without prior notice in standard administrative supervision.
What if I cannot provide the documents within the deadline?
Inform the FIU as soon as possible and request an extension with reasons. Failure to provide information on FIU instruction is itself an offence under the AML Act, punishable by a fine of up to CZK 10,000,000.
Do I need a lawyer present during the inspection?
The law does not require it, but for more complex cases, especially where the FIU indicates that specific client transactions or suspected offences will be reviewed, legal representation is advisable.
Can I appeal if I disagree with the inspection result?
Yes. An FIU decision on an offence is an administrative decision against which an appeal may be filed as an ordinary remedy. Objections may also be raised against a remedial measure under the AML Act within administrative proceedings.
How long does an FIU fine remain publicly visible?
The operative part of a final offence decision is published on the FIU website in a remotely accessible manner for 5 years after it becomes final under the AML Act.