Financial intelligence unit

What it means

The financial intelligence unit is a police unit that receives and analyses unusual transaction reports from banks, accountants, notaries and other obliged entities. It is Slovakia's part of the international network of financial intelligence units.

Its task is to detect money laundering and terrorist financing. It analyses reports, links them with other information, cooperates with foreign units and passes suspicions to law enforcement or the tax administration.

It also supervises compliance with the anti-money laundering act by obliged entities not supervised by the National Bank of Slovakia. It can impose fines for failing to meet obligations, such as missing client identification or an unreported transaction.

How it works in practice

An obliged entity must report an unusual transaction without undue delay and must not tell the client about the report. The unit can order the transaction to be held for a short time to check whether it involves money laundering and, if necessary, freeze the funds.

Accountants and tax advisers are obliged entities. They must have an AML programme, carry out customer due diligence, including identifying the ultimate beneficial owner, and keep identification records.

During an inspection, the unit checks whether the obliged entity can demonstrate its procedures: client risk assessments, identification records, staff training and how unusual transactions are evaluated. A well-designed system is the best protection against sanctions.

What to watch out for

Breaching the act can bring heavy fines and, for serious violations, criminal consequences. For smaller accounting firms the main risks are underestimating client identification and missing documentation.

Reporting an unusual transaction is not an accusation against the client, and an obliged entity reporting in good faith is not liable. The ban on tipping off the client is strict, however, and breaching it can derail an investigation and lead to sanctions.