Fraud Prevention

9.8.2017

Fraud prevention

Prague Safe Deposit s. r. o. based on Železná 483/2, 110 00 Prague 1, Reg.No: 27608760 (hereinafter referred to as "PSD") wants to provide its services in accordance with the highest ethical and professional standards and focuses on building the kind of corporate culture, which is the highest priority of regulatory compliance. It is determined to do everything necessary for the preservation of its good name and prevent it to become an instrument or victim of any illegal activity such as the legitimisation of the proceeds of crime (or so-called "money laundering").

As part of the fight against the legitimisation of the proceeds of crime and the financing of terrorism,

PSD has implemented a system of internal principles, procedures and control measures which are legislation-based and are fully compliant with:

  • Act No. 253/2008 Coll., on selected measures against the legitimisation of the proceeds of crime and financing of terrorism;
  • Act No. 69/2006 Coll., on Carrying Out of International Sanctions;

The aim of these measures is to prevent and detect money laundering and the financing of terrorism.

PSD is the obliged entity within the meaning of the Act No. 253/2008 and always has to identify the client in case of „an agreement to use a safety deposit box or an agreement on custody“ according to §7 of this Act.

Certain requirements and rights of PSD stemming from Act No. 253/2008 Coll.

Client identification

We must identify a client:

  • regardless of the limit, prior to the conclusion or prolongation of the agreement of rent of safety deposit boxes
  • regardless of the limit, in terms of the suspect trade.

Requirements for client identification:

a. individual - all names, surname, birth identification number (for a person with no birth

identification number a date of birth), place of birth, sex, permanent or other residence and citizenship, type and number of the identity card, country of issue, validity and the issuing body;

b. individual/entrepreneur - the same details as for an individual + business name, appendix to the business name or any other identification features, place of business and business identification number;

c. legal body – company name or names (incl. its appendixes or other identification features), company's registered office, business identification number or a business identification number given under foreign law. PSD will take a record of and verify identification data from their business registration documents, and, to the extent stipulated in point a., identify the individual acting in the transaction on behalf of such legal body; should the statutory body, its member, or the person in control of such legal body be another legal body, PSD will also record such person’s data. Should the client be represented by a holder of a power of attorney, such holder’s identification will follow the procedure stipulated above and the holder shall submit the respective power of attorney. For individuals acting as statutory bodies or their members, the same details are given as for individuals.

In addition to identification details, we also find out if the client is a politically exposed person and in the case of legal body, their ownership structure.

Client Due Dilligence

PSD is obliged to verify a client in the scope corresponding to the type of client and the intended trade before conclusion of the agreement of rent of safety deposit box - in the case of the suspect trade, the conclusion of the agreement with a politically exposed person and further at the time of the duration of the rent agreement, also performs client due dilligence:

  • information on the purpose and intended nature of the business relation;
  • information on and identification of the actual owners of legal bodies.

PSD will perform customer due diligence to the extent necessary to determine the potential risk of legitimisation of proceeds of crime and financing of terrorism depending on the type of client, business relationship, product. Verification is always performed with the client’s cooperation and in the method as defined by law.

PSD may, for the purposes of the Act No. 253/2008 take copies of or extracts from the documents submitted and process the obtained information to fulfill the purpose of this Act.

Rejection of transactions

According to section 15 of the Act we have the right to refuse conclusion of the contract of rent of safety deposit box if:

  • the client refuses the identification process,
  • the client fails to provide the necessary cooperation in due dilligence,
  • for any other reason it is impossible to perform the identification or control of the client, or PSD has a doubts about the veracity of the information or the authenticity of the documents,
  • in the case of politically exposed persons if PSD does not know the origin of assets, that the transaction relates to.

Clients whose information (which we have available) is not fully up-to- date will be asked to add current details.

Basic concepts

Financing of terrorism is considered to be:

gathering or providing financial or other assets knowing that such assets will be, in full or in part, used to commit a crime of terror, terrorist attack or a criminal activity intending to facilitate or support such crime or to support an individual or a group of individuals planning such a crime; or acting with the intention to remunerate or compesate a person who has committed an act of terror, terrorist attack or a crime intended to facilitate or support such crime, or collecting assets to pay such remuneration or compensation.

Legitimisation of the proceeds of crime – for the purpose of Act No. 253/2008 Coll. shall mean an activity performed to conceal the illicit origin of proceeds of crime with the intention to present the illicit proceeds as legal income. The above activity may particularly be in the form of:

conversion or transfer of assets, knowing that such assets come from criminal proceeds, for the purpose of concealing or disguising the illicit origin of the assets or of assisting a person involved in the commission of such activity to avoid the legal consequences of such conduct; concealment or disguise of the true nature, source, location, disposition, or movement of assets, or change of ownership rights with respect to assets, knowing that such assets derive from crime; acquisition, possession, use or handling of assets knowing that they originate from crime; criminal association or any other type of cooperation serving the purpose of conduct stipulated above

Beneficial owner means

for an entrepreneur:

a natural person having real or legal direct or indirect control over the management or operations of such entrepreneur, indirect control shall mean control via other person or persons; a natural person, holding in person or in contract with a business partner or partners more than 25 per cent of the voting rights of such entrepreneur; disposing of voting rights shall mean having an opportunity to vote based on one’s own will regardless of the legal background of such right or an opportunity to influence voting by other person; natural persons acting in concert and holding over 25 per cent of the voting rights of such entrepreneur; or a natural person who is, for other reason, a real recipient of such entrepreneur’s revenue; for a foundation or a foundation fund:

a natural person who is to recieve at least 25 percent of the distributed funds; or a natural person or a group of persons in whose interest a foundation or a foundation fund have been established or whose interests they promote in case the beneficiary of such foundation or a foundation fund has not yet been determined for an association under lex specialis 16), an institution, a public service organization or any other similar legal person and for a trusteeship or any other similar legal arrangement under a foreign law,

a natural person who: holds over 25 per cent of its voting rights or assets; is a recipient of at least 25 per cent of the distributed assets; or in whose interest they have been established or whose interests they promote, should it yet to be determined who is their future beneficiary.

Politically exposed person (PEP) means:

a natural person in a prominent public position and with nation-wide responsibilities,such as a head of state, a head of government, a minister and deputy or assistant minister, a member of the parliament, a member of a supreme court, a constitutional court or another high-level judicial body, decisions of which are not subject to further appeal, except in exceptional circumstances, a member of a court of auditors or a central bank board, a high-ranking military officer, a member of an administrative, supervisory, or management board of a state-owned business, an ambassador or chargé d’affaires, or a natural person, having similar responsibilities on a Community or international level; all the above for the entire period of the position and for one year after the termination of such position, and provided the person has residence outside the territory of the Czech Republic, or holds such important public position outside the Czech Republic; a natural person who is the spouse, partner equivalent to the spouse or a parent of the person under point 1); is a son or daughter of a person specified in point 1) or a spouse or a partner of such son or daughter (a son or daughter in law) is a business partner or beneficial owner of the same legal person, a trust or any other business entity under a foreign law, as the person under point 1), or is known to the obligated entity as aperson in close business relationship with a person under point 1); or is a business partner or a beneficial owner of the same legal person, a trust or any other businessentity under a foreign law known to have been established in benefit of a person under point 1).

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