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.

The Czech Republic has established a legal framework to combat corruption, criminalizing both the payment and receipt of bribes, with penalties reaching up to 12 years for officials. While there have been successful prosecutions, experts note that legal proceedings can be lengthy and complicated. The government has implemented various measures, including asset declarations for public officials and regulations on political party financing and public procurement, although concerns remain regarding the effective enforcement of these laws.

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, the economy faced a decline of 0.4% in 2023, largely due to high inflation and energy prices exacerbated by geopolitical tensions. The country is working on diversifying its industrial base and has made strides in research and development, supported by significant EU investments.

Czechia actively seeks to attract foreign investment through competitive policies and incentives, particularly in high value-added sectors such as R&D and advanced technologies. The Czech Investment Incentives law provides various benefits for investments that create jobs for university graduates, while the government has implemented a screening law to monitor foreign investments with national security implications. Overall, the investment climate is favorable, with substantial foreign direct investment and no significant discrimination against foreign investors.