Money laundering isn't just in shows on Netflix
That is why we have the Financial Analytical Office in the Czech Republic called the FAO, which monitors compliance with the obligations arising from the Anti-Money Laundering Act (the AML Act).
During its inspections, the Financial Analytical Office focuses, among other things, on compliance with the obligation to verify the origin of money used by clients of inspected companies in their transactions. A real estate broker must indeed check the origin of the funds used to purchase a property to a certain extent. So does an attorney in escrow or real estate transactions where he or she acts as an advisor. Or a car dealership when selling a vehicle. Tax advisors also have this obligation towards their clients.
The FAU has repeatedly fined audited companies, specifically real estate agencies, CZK 150,000 or even CZK 750,000 for failing to comply with this obligation. However, in their decisions on the fines imposed, the FAÚ did not comment in detail on how to investigate the origin of the money.
At the beginning of November, the FAO issued an opinion explaining the verification of the origin of funds. It is essential that the emphasis of such verification is based on the risk evaluation in respect of a particular client. Therefore, if you evaluate your client as low risk, it may be sufficient for you to receive just an affidavit from the client concerned. In such a case, you do not have to bother the client with providing you with, for example, statements of accounts, tax returns or payroll slips.