Act No. 253/2008 Coll.
Risks of AML Non-Compliance
Non-compliance with the obligations under Act No. 253/2008 Coll. entails serious risks that can be divided into three main categories: administrative (fines), professional (licensing), and criminal. The liability of the obliged entity is strict — the mere fact that an obligation was not met is sufficient for a penalty to be imposed.
1. Administrative penalties — fines (§ 44–46 of Act No. 253/2008 Coll.)
Penalties are imposed by the Czech Financial Intelligence Unit (FIU) or the relevant supervisory authority (e.g. the Czech National Bank). The amount depends on the severity and type of breach:
- Up to CZK 1,000,000 (approx. EUR 40K): For less serious procedural failures (e.g. administrative errors in records).
- Up to CZK 5,000,000 (approx. EUR 200K): For failure to retain records or breach of confidentiality.
- Up to CZK 10,000,000 (approx. EUR 400K): For failure to perform client identification or due diligence (§ 7–9), or failure to comply with the reporting obligation (§ 18).
- Up to CZK 130,000,000 (approx. EUR 5.2M) or 10 % of annual turnover: For financial and credit institutions in cases of serious, repeated, or systematic breaches.
2. Professional and operational risks
Beyond direct financial loss, the very substance of the business may be affected:
- Ban on activity: Temporary or permanent prohibition of a specific activity subject to the Act (§ 43 of Act No. 253/2008 Coll.).
- Revocation of licence or authorisation: Entities requiring a licence (payment institutions, currency exchanges) may have it revoked.
- Publication of penalty decisions: The FIU routinely publishes final decisions on fines on its website (§ 46 of Act No. 253/2008 Coll.) — so-called naming and shaming.
3. Criminal risks
Where non-compliance is assessed as intentional or grossly negligent, criminal prosecution of responsible individuals may follow:
- Offence under § 217 of the Criminal Code (Act No. 40/2009 Coll.): Failure to report a criminal offence (in connection with the laundering of proceeds of crime).
- Offence under § 216 of the Criminal Code (Act No. 40/2009 Coll.): Negligent laundering of proceeds of crime. Penalties include forfeiture of property, ban on activity, or imprisonment.
Overview of the most common failings by obliged entities
| Area | Specific risk |
|---|---|
| Client identification (§ 8) | Accepting cash or entering into a business relationship without performing client identification from an ID document. |
| Client due diligence (§ 9) | Failure to identify the ultimate beneficial owner of a legal entity or the source of the client's funds and wealth. |
| Reporting obligation (§ 18) | Failure to report a suspicious transaction to the FIU (e.g. unusually complex transactions without apparent economic sense). |
| Record retention (§ 16) | Shredding or destroying documents before the lapse of 10 years from the end of the business relationship or transaction. |
| Staff training under § 23 | Absence of regular training of employees, collaborating persons, and designated persons on AML obligations. |
Important: Strict liability of the obliged entity
The obliged entity's liability for offences under Act No. 253/2008 Coll. is strict. The mere fact that an obligation was not met is sufficient for a penalty to be imposed — the FIU does not need to prove that the breach was intentional or that money laundering actually occurred.
Risk overview
Financial Penalties
Failure to comply with AML obligations can result in severe monetary fines:
- Administrative fines can reach millions of euros per breach, depending on jurisdiction and severity.
- In the EU, regulators may impose daily penalties until compliance is achieved
- In some jurisdictions, fines can be proportionate to turnover, resulting in very high penalties.
Legal Consequences
Criminal charges and imprisonment for serious violations
- Criminal prosecution for willful violations of AML laws
- Penalties may include multi-year imprisonment, with exact terms depending on jurisdiction.
- Personal liability for Designated Persons, directors, and board members
Business Impact
Operational restrictions and reputational damage
- Suspension or loss of business licenses
- Termination of banking relationships and correspondent accounts
- Regulatory restrictions on operations
- Severe reputational damage leading to loss of clients and partners
AML fines in the EU are expected to rise sharply from 2026 onward due to AMLA centralization, moving from tens of millions EUR annually toward hundreds of millions EUR, and will start to hit smaller businesses harder—those who have so far relied on being "off the radar".
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