The International Compliance Association, the trade body for regulatory compliance officers, has formed a partnership with the Compliance Academy, a private educational institution for governance, risk and compliance (GRC) workers, to evolve best compliance practice in the Czech Republic.

As part of the agreement, the ICA will offer its full suite of accredited qualifications covering financial crime prevention, governance, risk and compliance (GRC) and money-laundering control to Compliance Academy members.

In line with its efforts to help advance education in compliance and help financiers all over the world to run fewer regulatory risks, the ICA will also offer two 'diploma scholarships' each year to members of the Compliance Academy. Thousands of compliance and AML managers all over the world hold ICA diplomas.

The agreement is designed to help companies conform to internationally recognised best practice by going beyond the regulatory call of duty. It also aims to help financial firms and other regulated businesses in the Czech Republic to improve their employees' skills and safeguard their businesses from criminal, financial and reputational risk.

Jan Indra, the content manager of the Czech Compliance Academy, told Compliance Matters: "We are new. We launched in June last year and we're still developing our portfolio of diplomas and workshops. We have a compliance academy club. We're trying to raise awareness of compliance in our country, especially since the last evaluation by the Financial Action Task Force said that our country really didn't follow through on the rules. Compliance hasn't been understood as much here as in other countries.

"We already host some compliance events - we did one yesterday. We've been trying to build a community from the ground up. We started from scratch and now have 850 subscribers on LinkedIn. For now, most of our members are compliance professionals but we want to expand to risk professionals and security professionals. We work in a building, we are forming a 10-person academic council to discuss strategy and I am one of 5-6 people on the realisation team. I am the guy doing all the marketing. The money comes from our co-founders and the owners of the company. We try to get partners for our events."

The FATF report

The inspectors from MONEYVAL (Europe's FATF-style regional body or FSRB) say in their report that the Czechs only comply fully with four of the FATF's famous '40 recommendations.' These, for the record, are to do with confiscation (R4); an absence of secrecy laws (R9); money transfer services (R14); and police powers (R31). They largely comply with 23 and partially comply with 12, with the FATF complaining that there still is no unified national AML strategy (R2) and that authorities are not briefing firms enough about sanctions (R7). Correspondent banking (R13) and higher-risk countries (R19) are other sources of worry, although the report does not go into detail about them.

Most suspicious transaction reports come from banks. Nearly all of the banking sector is foreign-owned with 5,960 billion AuM as of three years ago. It consists of 45 banks, of which 23 are the branches of foreign banks. Terrorist finance is not a problem. The main predicate crimes are tax evasion and corruption, especially in subsidies and the public procurement sector. Plenty of money is laundered in the financial sector, often with the help of lawyers; in real estate; in betting; in virtual currencies; and (not a concern for private bankers) in trade.

The two main regulators are the Financial Analytical Unit (FAU) and  the Czech National Bank (CNB), but they do not have enough people to supervise firms properly for AML purposes. The FATF thinks that trials take too long.

It is good to note that a Czech Beneficial Ownership Register was in existence at the time of the report's writing in late 2018 in line with the European Union's fifth Money Laundering Directive, although many in Europe are still not ready to this day. The public register includes a commercial register, a register of associations, a register of foundations, a register of associations of unit owners and a register of benevolent associations. Compliance officers can access every public register directly on line and free of charge, although the Government keeps various information secret upon request, which might obviate the whole exercise. The country also has good laws for extraditing suspects - a recent FATF obsession - although there are administrative delays.