Slovakia – Know Your Customer (KYC) Rules

 

 

Slovakia is a transit and destination country for counterfeit and smuggled goods, stolen autos, value-added tax (VAT) fraud, and trafficking in persons, weapons and illegal drugs. Criminal activity is characterized by a high level of domestic and foreign organized crime, mainly from eastern and south-eastern Europe. A number of the same groups are also involved in laundering funds raised from these criminal activities. Trade-based money laundering and possible terrorist financing also occur in Slovakia. Funds from public corruption are not seen as a significant part of money laundering/terrorist financing. There are no offshore or free trade zones in Slovakia. Slovak authorities consider the transfer of undeclared cash across the borders to be a money laundering vulnerability. No alternative remittance systems are known to be widely used in Slovakia.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: NO

Slovakia – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Slovakian Law:

    • Banks
    • The Export-Import Bank of the Slovak Republic
    • Credit institutions
    • Insurance companies
    • Pension asset management companies
    • Foreign currency exchanges
    • Gambling/gaming operators
    • Bankruptcy administrators
    • Accountants
    • Tax advisors
    • Real estate agents
    • Postal operators
    • Real estate intermediaries
    • Corporations (foundations, non-profit organizations, non-investment fund or other special corporations managing and distributing funds)

Slovakia – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 2,379 as of November 2011

Number of CTRs received and time frame: Not applicable

The following is a list of STR covered entities covered by Slovakian Law:

    • Banks
    • The Export-Import Bank of the Slovak Republic
    • Credit institutions
    • Insurance companies
    • Pension asset management companies
    • Foreign currency exchanges
    • Gambling/gaming operators
    • Bankruptcy administrators
    • Accountants
    • Tax advisors
    • Real estate agents
    • Postal operators
    • Real estate intermediaries
    • Corporations (foundations, non-profit organizations, non-investment fund or other special corporations managing and distributing funds)

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: 35 in 2010
Convictions: Six in 2010

 

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Act No. 101/2010 Coll. on the Proof of Origin of Property, effective January 1, 2011, introduces the tool of non-conviction based confiscation within civil procedures, and stipulates conditions and procedures for public authorities in forfeiture of property.

In December 2011, amendment to Act No. 492/2009 Coll. on payment systems introduces several changes to AML/CFT Law No. 297/2008 Coll. on the Prevention of Legalization of Proceeds of Criminal Activity and Terrorist Financing, including specification and expansion of reporting entities. Although suspicious transaction reporting relating to terrorist financing is supported in current legislation, it is only mandated at a minimum level. The current definition needs to be expanded and further specified in legislation. In addition, it appears that law enforcement efforts are not sufficiently focused on serious money laundering offenses, as recent cases demonstrate a considerable focus on stolen car investigations. Rather, there is little evidence showing that money laundering investigations are being used to prosecute organized crime, which is a significant problem in Slovakia.

Slovakia should also provide capacity enhancing materials to non-financial businesses and professions and improve supervision of these entities to ensure they meet their obligations.