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by Kristína Bartošková 

Who is the Beneficial Owner?

The Czech Anti Money Laundering Act (“AML Act”) defines the term beneficial owner as an individual having factually or legally the possibility of exerting direct or indirect decisive influence over a legal entity. The AML Act further stipulates specific assumptions according to which the beneficial owner can be determined.

Identification of Beneficial Owner in Public Procurement

Pursuant to the amendment to the Czech Public Procurement Act (“PPA”), being effective as of 1 January 2018, the supplier selected in the public tender is no longer obligated to provide identification of its beneficial owner(s) and evidencing documentation thereto as a prerequisite for the conclusion of contract. 

Instead, the contracting authorities will search the relevant information in the Register of Beneficial Owners,  maintained by registry courts, which was introduced by the amendment. All entities registered in the Commercial Register are obligated to apply for registration of information on their beneficial owners with the respective registry court until 1 January 2019.

If the beneficial owner cannot be identified from the Register of Beneficial Owners, the contracting authority requests that the selected supplier presents an extract from a register similar to the Register of Beneficial Owners (e.g. in case of foreign entities) or to communicate the identification data of the beneficial owner(s) and to produce documents evidencing their relationship to the supplier. These documents include, in particular, an extract from the Commercial Register or other similar register, list of shareholders, the statutory body resolution on the payment of dividends, memorandum or articles of association, founding deed and by-laws.

Conclusion

In the light of the amendment to the PPA, Czech contracting authorities should only require suppliers to provide identification data of their beneficial owner if they are not available from the Register of Beneficial Owners or a similar register.