Certain mistakes regularly occur when setting up a currency exchange business and may lead to delays in the authorisation process, additional costs or complications when commencing operations. The following areas should therefore be addressed from the outset:
1. Treating a currency exchange office as an ordinary trade
Currency exchange activities cannot be commenced merely by incorporating a company. A currency exchange operator may carry on the business only after obtaining authorisation from the Czech National Bank.
The application must be submitted electronically through the CNB’s REGIS system. Submission by email, data box or in paper form is not permitted for this purpose.
2. Leaving the management and ownership structure until the last minute
The CNB does not assess only the applicant company. The applicant’s senior officers and beneficial owners must also meet the applicable good-repute requirements.
The person who will effectively manage the currency exchange business must have at least secondary education completed by a school-leaving examination. As a general rule, that person may not simultaneously manage the exchange activities of another operator outside the same corporate group.
The ownership and management structure should therefore be reviewed before the application is prepared.
3. Submitting an incomplete or inconsistent application
The information contained in the application, the Commercial Register, the Register of Beneficial Owners and the supporting documents should be mutually consistent.
Missing documents, unclear responsibilities or contradictory information may result in a request for additional information and unnecessary delays. The complete application should therefore be reviewed as a single set of documents before submission.
4. Relying on a generic AML template
A currency exchange operator is an obliged entity under the Czech AML Act. It must implement appropriate internal controls and risk-management procedures. A standard exchange office with employees will generally also require a written AML policy and a written risk assessment.
The documentation should reflect the operator’s actual business, including its customer base, currencies offered, transaction values, organisational structure and customer identification and due-diligence procedures.
Relevant employees must also be trained before being assigned to their positions and subsequently at least once during every 12-calendar-month period.
5. Forgetting to notify the business premises
The authorisation itself does not allow the operator to start conducting business at any location. The location of the currency exchange office must be notified to the CNB at least three business days before operations commence.
The premises must also be properly marked and prepared to comply with the information duties owed to customers.
6. Treating the authorisation as the end of the process
Before the first transaction is carried out, the operator should have its exchange-rate list, customer receipts, transaction records, AML forms, suspicious-transaction procedures and customer-rights processes ready.
The exchange-rate list and transaction receipt must comply with statutory content requirements and must be available at least in Czech and English.
