Czech Republic Country Summary

FATF Status

The Czech Republic is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Czech Republic was undertaken in 2022. According to that Evaluation, The Czech Republic remains Compliant for 6 and Largely Compliant for 29 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings.

Czech law criminalizes bribery and mandates annual asset declarations for public officials, with penalties for non-compliance. The government has implemented various regulations to enhance transparency in political financing and public procurement, including the Beneficial Ownership Law to ensure clarity on company ownership. Recent developments include a whistleblower protection law and improvements in anti-money laundering measures, although challenges remain in prosecuting high-level corruption and protecting anonymous whistleblowers.

Czechia has an export-led economy, with 72.7% of its GDP derived from exports, primarily in the automotive and engineering sectors. Despite a small GDP of $312 billion and low unemployment rates, the economy faced a year-on-year GDP decline of 0.2% in 2023, largely due to high inflation and energy prices. The country has made strides in diversifying its industrial base and is heavily integrated into the EU market, with Germany as its largest trading partner.

Czechia actively seeks to attract foreign investment through competitive policies, including the amended Investment Incentives law, which focuses on high value-added investments in R&D and technology sectors. The government provides various incentives such as corporate tax relief and cash grants for job creation, while CzechInvest assists foreign investors with project implementation and market entry. Overall, the investment climate is favorable, with no discrimination against foreign investors and substantial foreign direct investment, totaling $202.5 billion by the end of 2022.