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On January 15, 2025, Act No. 387/2024 Coll. entered into force, amending Act No. 297/2008 Coll. on the prevention of money laundering and the financing of terrorism and on amendments to certain laws, as amended, and amending certain laws dated November 27,2024.

What key changes did the amendment to the AML Act, effective as of January 15, 2025, bring? 

On January 15, 2025, Act No. 387/2024 Coll. came into effect, amending Act No. 297/2008 Coll. on the prevention of money laundering and terrorist financing and on amendments to certain laws, as amended, and amending certain laws dated November 27,2024. 

The aforementioned Act primarily amended and supplemented Act No. 297/2008 Coll. on the Prevention of Money Laundering and the Prevention of Terrorist Financing and on Amendments to Certain Acts (hereinafter also referred to as the “AML Act”), but it also affected many other legal regulations—e.g., Act No. 372/1990 Coll. on Misdemeanors, Act No. 455/1991 Coll. on Trade Licensing (Trade Licensing Act), Act No. 78/1992 Coll. on Tax Advisors and the Slovak Chamber of Tax Advisors, Act No. 171/1993 Coll. on the Police Force, Act No. 202/1995 Coll. Foreign Exchange Act, Act No. 199/2004 Coll. z. Customs Act, Act No. 129/2010 Z. z. on consumer credit and other loans and credits for consumers, and other – however, these laws were supplemented and amended largely only in connection with changes to the AML Act.     

The amendment to the AML Act was drafted by the Ministry of the Interior of the Slovak Republic in cooperation with the Ministry of Finance of the Slovak Republic, the Ministry of Justice of the Slovak Republic, and the National Bank of Slovakia, and its primary objective was, above all, the implementation of Regulation (EU) 2023/1113 of May 31, 2023, on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849 (hereinafter “Regulation (EU) 2023/1113”).  

What were the main objectives of the amendment to the AML Act from the perspective of European legislation and Moneyval? 

In addition to the main objective mentioned above, equally important objectives of the amendment to the AML Act were to address the shortcomings in Slovak legislation identified by the European Commission so to meet the requirements for the correct and complete transposition of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council (EU) No. 648/2012 and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC, as well as in accordance with Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and Directives 2009/138/EC and 2013/36/EU. Following the identification of shortcomings, the aim of this amendment was also to address the deficiencies identified in the Report of the 5th round of the mutual evaluation of the Slovak Republic by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval) (hereinafter referred to as the “Moneyval Committee”).   

In the explanatory memorandum to the amendment to the AML Act, the sponsor himself stated that failure to address the shortcomings identified by the Moneyval Committee could result in the application of the ICRG (International Country Risk Guide) against the Slovak Republic, with the possible subsequent inclusion of the Slovak Republic on the so-called “grey list.” According to the sponsor, placing a country on the grey list means, in addition to the negative impact on the country’s reputation itself, serious consequences in the form of increased scrutiny by international institutions, difficulties in conducting cross-border transactions, and a reduced ability to attract foreign investment. 

What key changes and obligations did the 2025 amendment to the AML Act introduce?  

For the purposes of this article, we briefly outline the key changes introduced by the amendment to the AML Act and their significance: 

1. classifying crypto-asset service providers as financial institutions and, at the same time, replacing the previously existing virtual currency exchange service providers and virtual currency wallet service providers 

2. new legal terms: “crypto-asset,” “transfer of crypto-assets,” and “high-risk country” – introduction of the new legal term “crypto-asset,” which replaces the previous term “virtual currency” (with reference to Article 3(14) of Regulation (EU) 2023/1113) 

3. numerous changes in the scope and content of the obligations of the obligated entity when identifying a legal entity, as well as in both standard and simplified customer due diligence—e.g., in addition to the client’s registered office address, the obligation to ascertain the address where the client actually conducts business, if it differs from the address of its registered office, or for verified persons in cases if the person has a representative not only on the basis of a power of attorney (as a result of the deficiency noted by the Moneyval Committee in relation to FATF Recommendation No. 10.4, according to which there must be a legal requirement to verify whether persons acting on behalf of someone else are authorized to do so, even in cases other than a power of attorney) 

4. proper transposition of European legislation (particularly directives) – addressing shortcomings in the transposition of the directives mentioned above, which were identified in assessments by the Moneyval Committee and the European Commission  

5. restriction, control, and declaration of cash—amending the obligation to declare cash when transporting it across the borders of the Slovak Republic, particularly in connection with mitigating the risk of financing illegal activities such as human trafficking, drugs, weapons, or terrorism 

6. increase in fines and penalties for violations of legal obligations – in accordance with the recommendations of the Moneyval Committee, the amendment to the AML Act also addresses the increase in fines and sanctions for failure to comply with obligations in the area of preventing money laundering and terrorist financing as an effective tool to ensure compliance with legal and increasing entities’ motivation to comply with the rules  

7. New requirements for responsible persons under the AML Act, the need to assess the adequacy of obligated entities’ internal control programs  

How has the amendment to the AML Act affected the registration of ultimate beneficial owners in the RPVS?   

Although the amendment to the AML Act did not directly amend Act No. 315/2016 Coll. on the Register of Public Sector Partners and on Amendments to Certain Acts (hereinafter also referred to as the “RPVS Act”), its impact on its application is significant. This Act explicitly refers to the definition of a beneficial owner under a “special regulation,” which is precisely the AML Act—specifically its Section 6a. 

Pursuant to Section 4 of the Public Sector Partner Register Act, the register also includes a list of the beneficial owners of a public sector partner, specifically: first name, surname, permanent address, date of birth, nationality, and information on whether the person is a public official performing a function in the Slovak Republic. 

Although the RPVS Act itself was not updated by the amendment, the expansion and clarification of the definition of “beneficial owner” in the AML Act has a direct impact on determining who, and in what cases, must be entered into the register as a beneficial owner. This applies to both public sector partners and authorized persons who make the entry and are responsible for its accuracy. 

In practice, this means that even without an amendment to the RPVS Act, it may be necessary in some cases to: 

• supplement or amend the entries for beneficial owners in the registry, 

• to change the authorized person’s internal procedures for identifying and verifying them, 

• to analyze more complex or foreign ownership structures more thoroughly. 

What new features and criteria does the amendment introduce for identifying the beneficial owner? 

The definition of the beneficial owner in Section 6a of the AML Act consists  

1. of a so-called general clause, according to which the beneficial owner is considered to be any natural person who actually controls or manages a legal entity, a natural person—entrepreneur or asset pool, and any natural person for whose benefit these entities conduct their activities or business (this part of the definition remains unchanged) 

2. from the illustrative list of persons who could be identified as beneficial owners in light of the so-called general clause for individual legal forms or categories of legal forms 

Originally, the AML Act listed only the criteria for a legal entity (Section 6a(1)(a)), a natural person—entrepreneur (Section 6a(1)(b)), and an asset pool (Section 6a(1)(c)). The amendment clarified the criteria for property associations and simultaneously expanded the scope of entities, precisely defining which persons would meet the definitional criteria specifically for: 

1. so-called foreign trust funds  

2. general partnerships and limited partnerships, and  

3. legal entities with a silent partner under a silent partnership agreement.  

How does the amendment to the AML Act clarify the identification of the beneficial owner in an asset pool? 

Under the amendment to the AML Act, the beneficial owner of an asset pool is considered to be a natural person who: 

1. is the founder or establisher of the asset pool; if the founder or establisher is a legal entity, a natural person as defined in Section 6a(1)(a) of the AML Act, 

2. has the right to appoint, otherwise designate, or dismiss the statutory body, management body, supervisory body, or audit body of the asset pool or a member thereof, or is a member of a body that has the right to appoint, otherwise designate, or dismiss these bodies or a member thereof, 

3. is a statutory body, management body, supervisory body, control body, or a member of such bodies, 

4. is the recipient of at least 25% of the funds provided by the asset association, if the future recipients of these funds have been designated; if future beneficiaries are designated based on characteristics, such characteristics are specified, and the ultimate beneficial owners become such at the moment of their identification or designation; and if future beneficiaries of the assets of the association have not been designated, the group of persons who derive significant benefit from the establishment or operation of the trust shall be deemed the ultimate beneficial owners, 

5. is appointed to represent and protect the interests of the beneficiaries of the trust. 

In this case, the amendment to the AML Act clarified that if the future beneficiaries are designated based on characteristics, then the characteristics must be determined, and specific natural persons become beneficial owners only at the moment of their identification or designation. Under the amendment to the AML Act, a natural person appointed to represent and protect the interests of the beneficiaries of a trust is also considered a beneficial owner.  

The proposal addresses a shortcoming in relation to FATF Recommendation 10.11(a), which requires that the beneficial owners of a trust also include beneficiaries designated by class, becoming so upon their identification or designation, and which requires that, in the case of trust arrangements, the so-called protector that is, a person appointed to represent and protect the interests of the beneficiaries of the trust. 

How is the ultimate beneficial owner determined in the case of a foreign trust fund? 

Since the obligation to register in the Public Sector Partners Register may arise for any legal entity, which may also have a legal form not regulated by Slovak legislation, it often happens that the authorized person and the public sector partner, during the process of registration in the public sector partner registry, had to identify the ultimate beneficial owner even for an entity that is a so-called trust established under the legal system of another country.  

Despite reports that the Ministry of Justice of the Slovak Republic is preparing legislation governing trust funds, it is currently not possible under Slovak law to establish or set up a trust fund or trust, even though some legal regulations use this term (the term “trust” is currently used in Act No. 359/2015 Coll. on the automatic exchange of information on financial accounts for tax administration purposes and on amendments to certain acts, and in Act No. 507/2023 Coll. on a catch-up tax to ensure a minimum level of taxation of multinational enterprise groups and large domestic groups and amending Act No. 563/2009 Coll. on Tax Administration (Tax Code) and on Amendments to Certain Acts, as amended).   

However, among legal professionals and in light of practical application, the implementation of such a legal form is both discussed and necessary. The Czech legal system recognizes this legal form, and it is often the case that Slovak entities establish trust funds under Czech law, partly due to the similarity of the legal systems and the Czech language. 

A trust fund represents a set of assets, such as business shares in a family business, that is set aside for a specific purpose and is managed by a third party (trustee) for the benefit of a predetermined person (beneficiary). A trust fund allows the owner of the assets to determine how their assets will be managed in the future, thereby preserving the unity of the assets and preventing their division, while also ensuring that such assets are not subject to inheritance. The rules for managing the assets in a trust fund are defined in the trust fund’s charter, which are binding on the trust fund administrator, who is obligated to manage the assets exclusively in accordance with the trust fund’s charter. The charter can therefore clearly define who, in what manner, and to what extent will participate in the family business and enjoy the benefits arising from it (https://www.legalfirm.sk/sk/stranky/clanok/zvereneck%C3%A9-fondy-porovnanie-pr%C3%A1vne-poriadky).  

Under the amendment to the AML Act, a natural person who is 

1. the founder of a foreign trust fund, 

2. the administrator of a foreign trust fund, 

3. a person exercising supervision over the management of a foreign trust fund, if designated, 

4. a beneficiary of funds from a foreign trust fund, if a future beneficiary of the funds has not yet been designated, a group of persons who derive a significant benefit from the establishment or operation of a foreign trust fund, 

5. exercises effective control over the assets entrusted to the foreign trust fund through direct or indirect ownership or by other means and is not listed in points 1 through 4 

According to the translator, the reason for the proposed amendment was a criticism by the European Commission regarding the transposition of Directive 2015/849, as amended, as well as shortcomings identified in the 5th round of the Moneyval Committee’s mutual evaluation, according to which it is necessary to identify the ultimate beneficial owner even in the case of a so-called trust fund, and according to the European Commission’s opinion, it is also necessary to address “cross-border situations,” i.e., situations where a trust is established under the law of another state—the proposed amendment transposes Article 3(6)(b) of Directive 2015/849, as amended. 

Who is the beneficial owner in a general partnership and a limited partnership? 

Under the amendment to the AML Act, the beneficial owner of a general partnership and a limited partnership is considered to be a natural person who 

1. is a partner, 

2. directly or indirectly, through an ownership interest or by other means, controls a partner that is a legal entity. 

According to the proposer, the amendment is based on the peer review of the Slovak Republic by the OECD Global Forum on Transparency and Exchange of Information (hereinafter “GF”) and the recommendations in the area of exchange of tax information upon request that resulted from the review (The document is available on the website: https://www.oecd.org/slovakia/global-forum-on-transparency-and-exchange-of-information-for-tax-purposes-slovak-republic-2020-second-round-960316d9-en.htm) - In order to address the identified shortcomings and align with global standards, the Slovak Republic was specifically recommended to ensure that, in the context of partnerships (partnerships), which in the Slovak Republic include general partnerships and limited partnerships, information on beneficial owners is available, taking into account their form and organizational structure. According to the GF’s reasoning, the general regulation regarding the definition of beneficial owners for business entities is insufficient, but specific legal provisions are needed to ensure that, in the case of these companies, partners who are natural persons are always considered beneficial owners. If the partners are legal entities, it is necessary to identify the natural persons behind these legal entities in accordance with the rules for determining beneficial owners. 

Is a silent partner considered a beneficial owner?  

The amendment to the AML Act clarified that a natural person who is a silent partner of a legal entity is considered a beneficial owner if they are entitled to at least 25% of the economic benefits from the business activities of that legal entity.  

In our legal opinion, the aforementioned provision merely specified, or rather singled out, one of the defining characteristics for determining the beneficial owner listed in Section 6a( 1 of the AML Act, namely the right to economic benefit of a legal entity, and defined the scope of this right, namely at least 25% of the right to economic benefit.   

The GF’s recommendations also called for specific provisions regarding beneficial ownership for silent partners under a silent partnership agreement, with regard to the economic benefit which they may derive from investing in a commercial company. The proposer also suggested the aforementioned amendment because the GF considers the interpretation of the provisions of Act No. 297/2008 Coll. in the guidelines of the Financial Intelligence Unit, which are non-binding.  

Is it necessary to update the data in the Public Sector Partners Register following the amendment to the AML Act? 

We assume, given that the amendment to the AML Act takes effect on January 15, 2025, that authorized persons have verified the identity of the ultimate beneficial owner of a public sector partner as of December 31,2024 in accordance with the AML Act amendment and, upon the entity’s initial entry into the public sector partner registry, are proceeding in accordance with current legislation.  

However, since we also believe that the amendment did not introduce changes to the criteria for identifying a natural person as the beneficial owner, but merely specified these criteria in greater detail, we believe that changes to the persons identified as beneficial owners were not even necessary. When assessing both the original and the amended criteria, we believe that an authorized person (as well as a public sector partner) would identify the same persons as beneficial owners, taking into account the amendment to the so-called general clause and thus the identification of a natural person who actually controls or manages a legal entity, a natural person—an entrepreneur or an asset pool—and any natural person for whose benefit these entities conduct their activities or business.  

The amendment to the AML Act represents an important step toward strengthening the transparency of the business environment in Slovakia and aligning it with European and global standards. For the legal community, this means the need for a more thorough analysis of clients’ ownership structures, particularly in cross-border cases or less traditional legal forms. Although the amendment does not formally change the concept of beneficial ownership, it significantly impacts the method of its identification in practice. Therefore, its implications should not be overlooked in day-to-day corporate or compliance work.