AML

What it means

AML is the body of rules against laundering the proceeds of crime and financing terrorism. In Slovakia it is Act 297/2008 Coll., and it does not stop at banks: an accountant, a tax adviser, a lawyer, an estate agent or a car dealer is an obliged entity too.

An obliged entity has to identify and verify the client (KYC), establish the ultimate beneficial owner, assess the risk of the relationship and keep watching whether transactions fit the declared business. An unusual transaction is reported to the financial intelligence unit.

The law does not ask for the same checklist on every client. Depth follows risk: an ordinary domestic company with plain ownership needs basic due diligence, while a politically exposed person, a layered structure or ties to high-risk countries call for enhanced due diligence. AML itself is only one of the areas covered by the broader field of compliance.

How it works in practice

In practice, taking on a client means asking for the director’s ID, an extract from the commercial register, the ownership chain and a short description of the business. It is neither red tape nor distrust - without it an accounting firm may not sign the engagement at all.

The firm maintains its own AML programme, sanctions screening of counterparties and written risk assessments. An inspection asks for exactly those documents, not for whether you have ever filed a report.

The duties do not end when the engagement is signed. When a client’s shareholder or director changes, or payments suddenly appear on the account that do not fit its registered business activity, we update the records and ask where the money comes from. The answer and the documents go on file, so that it can later be shown what the assessment rested on.

What to watch out for

Fines for a missing AML programme run into tens of thousands of euros and land on companies that never laundered anything - the absence of procedure is itself the offence. The second risk is tipping off: the client must never be told that a report was filed.

If a client does not supply the data or cannot explain who owns it, an obliged entity may not simply proceed on trust: the law requires it to decline the relationship or end it. Companies often learn this only when they change accountants, as the new firm asks for documents the old one never requested and the handover of the books slips by weeks.