Czech ACT OF 26 SEPTEMBER 1995
FOREIGN EXCHANGE ACT
The Parliament has agreed upon the following Act of the Czech Republic:
PART ONE
BASIC PROVISIONS
§ 1
Definition of Terms
For the purposes of this Act the main terms are defined as follows:
a) "domestic territory" is the territory of the Czech Republic,
b) "resident" is a natural person permanently domiciled in the Czech Republic or a legal person having its seat in the Czech Republic,
c) "non-resident" is a natural or legal person not stated under letter b),
d) "foreign exchange values" are foreign currencies, gold and foreign securities, and, furthermore, rights and commitments derived from any of these (hereinafter "financial derivatives") which can be valued in money,
e) "gold" is gold bullion negotiable world-wide, the purity of which is certified by seal or attached certificate issued by an authorised person,
f) "securities" are documents, or records substituting for them, granting the right of ownership participation or the right of financial settlement,
g) "foreign securities" are securities issued by a non-resident,
h) "domestic securities" are securities issued by a resident,
i) a "financial credit" is the granting of Czech or foreign currency to which is connected an obligation to return them in the form of money; a financial loan is also deemed a financial credit,
j) a "trade in foreign exchange values" is the purchase or sale of foreign exchange values executed on one's own or someone else's account; exchange of foreign exchange values is also deemed trade in foreign exchange values; repayment of a financial credit in currency other than that in which it was extended or accepted is not an exchange of foreign exchange values if the agreement is made in writing,
k) "direct investment" is such use of money or other ownership values or property rights which can be evaluated in money, the purpose of which is to establish, acquire or enlarge lasting economic relations by a resident investor with a business activity abroad or by a non-resident investor with a business activity in the Czech Republic in one of the following forms:
- establishment or acquisition of an exclusive share in a business activity including its enlargement,
- participation in a newly established or existing business activity if an investor owns or acquires at least a 10% share of the authorised capital of the business company or at least a 10% share of the capital of any other form of business activity or at least 10% of the voting rights,
- a financial credit for five or more years extended by an investor for the purpose of business activities in which the investor participates under item 1 or 2, or a credit linked to the agreement on the share of the division of profits,
- the use of profits from an existing direct investment in the same investment (profit reinvestment),
l) "foreign exchange authorities" are the Ministry of Finance and the Czech National Bank,
m) "foreign exchange entity" is:
- a bank with a seat in the Czech Republic or a foreign bank branch office which, within the scope of their banking licence provided under a separate Act, are authorised to trade in foreign exchange values or effect payments and transfers vis-a-vis abroad,
- a person who, under this Act, was granted a foreign exchange licence to trade in foreign exchange values or provide money services,
- a person granted a licence and issued a licensing certificate under a separate Act to carry out money exchange bureaux activities,
n) "providing money services" is the intermediation of payments and transfers to and accepting payments and transfers from abroad.
§ 2
Division of Powers between Foreign Exchange and Customs Authorities
1) Under this Act state administration is executed by the Ministry of Finance and the Czech National Bank.
2) The Ministry of Finance under this Act exercises its powers vis-a-vis ministries and other administrative authorities, territorial self-administrative entities, budgetary organisations, state funds and vis-a-vis all persons in the area of credits being extended to or accepted by the Czech Republic.
3) The Czech National Bank under this Act exercises its powers vis-a-vis other residents and vis-a-vis non-residents.
4) Customs authorities under this Act exercise their powers with respect to imports and exports under § 5, item 3 and § 20, item 3.
§ 3
Foreign Exchange Licence and Foreign Exchange Permit
1) A foreign exchange authority grants a foreign exchange licence to a foreign exchange entity which is not a bank under a separate Act to trade in foreign exchange values or provide money services, provided this activity is a business activity.
2) A foreign exchange permit is necessary in those cases as defined in § § 6, 9, 10, 11, 12, 14, 15, 16 and 18, unless otherwise stipulated by this Act.
3) A foreign exchange permit is not required if:
a) the Czech Republic or the Czech National Bank is the participant in the legal relationship ,
b) the activity to be permitted by a permit under this Act is carried out by a foreign exchange entity under its name and on its own account within the scope stipulated in its banking licence or its foreign exchange licence.
4) A foreign exchange licence or a foreign exchange permit is granted on the basis of an application in the name of the person to whom the foreign exchange licence or foreign exchange permit is granted. The granted foreign exchange licence or foreign exchange permit cannot be transferred to another person nor passed on to a legal successor.
5) When deciding on a foreign exchange licence or a foreign exchange permit application, foreign exchange authorities take into consideration primarily developments in the foreign exchange economy and the balance of payments of the Czech Republic. The granting of a foreign exchange licence or a foreign exchange permit is not a legal right. An appeal can be filed with the Minister of Finance against a decision of the Ministry of Finance and with the Board of the Bank against a decision of the Czech National Bank. Their decision is final without the right of appeal. An appeal does not defer execution of the decision,
6) For money exchange bureaux activities a Czech National Bank expert opinion issued under a separate Act substitutes for a foreign exchange licence. The aforesaid person, if a legal person, can also be granted by the Czech National Bank a foreign exchange licence to sell foreign currencies for Czech currency.
7) A foreign exchange licence to trade in foreign securities can be granted only to a person having a licence to perform activities under a separate Act. The foreign exchange licence is granted by the Czech National Bank in agreement with the Ministry of Finance.
8) A foreign exchange licence or a foreign exchange permit stipulates the scope of authorisation, the period for which it is granted and the preconditions which the person to whom the foreign exchange licence or foreign exchange permit is granted is obliged to keep.
9) A person with neither a banking licence with the required scope of authorisation nor a foreign exchange licence with required scope of authorisation, must not publicly offer trading in foreign exchange values or the providing of financial services.
PART TWO
RIGHTS AND OBLIGATIONS OF RESIDENTS AND NON-RESIDENTS
§ 4
Rights of Residents and Non-residents
1) A resident is allowed, without a foreign exchange permit, to enter into contractual commitments vis-a-vis a non-resident and meet the commitments arising from these relations in Czech and foreign currency, unless otherwise stipulated by this Act.
2) A resident is allowed to acquire foreign exchange values, assets and property abroad, and import and export Czech and foreign currency, unless otherwise stipulated by this Act.
3) A non-resident is allowed to buy in the Czech Republic foreign money for Czech currency and vice versa, to acquire other foreign exchange values, real estate, to import and export Czech and foreign currencies, unless otherwise stipulated by this Act.
§ 5
Reporting Obligation
1) A non-resident who is a foreign exchange entity, and a resident are both obliged to report on facts concerning:
a) financial claims and liabilities vis-a-vis residents abroad and vis-a-vis non-residents,
b) direct and other investments, financial credits, securities and associated collections, payments and transfers vis-a-vis residents abroad and non-residents, financial market operations, including operations performed through non-residents,
c) establishment of and balances on their accounts abroad.
2) A resident and a non-resident is obliged to report on facts concerning the import and export of Czech and foreign currencies in cash, travellers cheques, gold and gold coins.
3) The reporting obligation is carried out vis-a-vis a foreign exchange authority directly or through a foreign exchange entity or a customs authority in the terms and in the manner stipulated by the Order of the Czech National Bank and the Ministry of Finance, or when required by a foreign exchange authority.
4) Foreign exchange entities and customs authorities, through which a reporting obligation is being carried out, are obliged to pass on the reported facts to a foreign exchange authority in the manner stipulated by item 3 of this § 5.
5) Foreign exchange entities and customs authorities are obliged to handle information acquired while involved in a reporting obligation in such a manner as to prevent its misuse.
§ 6
Obligation to Transfer Money from Abroad
1) A resident is obliged to transfer or import to the Czech Republic all money in Czech and foreign currencies acquired abroad net of the payment of all fees, taxes and other expenditures abroad connected to their acquisition, and this without unnecessary delay; but at the latest 30 days from the day when he acquired them, or learned, or could learn about their acquisition, or 30 days after the person becomes a resident, unless otherwise further stipulated.
2) The obligation under item 1 does not refer to the following:
a) a foreign exchange entity, if it follows from its banking licence or foreign exchange licence,
b) foreign or Czech currency that a resident acquires in cash during his stay abroad and uses up during this stay abroad,
c) re-investment of profit from direct investment (§ 1, letter k, point 4),
d) foreign or Czech currency on the account of a resident abroad in compliance with a foreign exchange permit granted by a foreign exchange authority.
3) A resident may ask abroad to establish or maintain an account in foreign or Czech currency, or enter into a contractual commitment to confide or to deposit his foreign or Czech currency to an account maintained abroad, only with a foreign exchange permit from a foreign exchange authority.
4) A foreign exchange permit is not required under item 3 for the establishment and maintenance of a resident's account:
a) if the resident is a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities,
b) during his stay abroad,
c) for the payment of demonstrable operational costs of his organisational unit or representation office abroad,
d) for the deposit of his money if the transfer of this money to the Czech Republic is barred by legal obstacles in force abroad,
e) to pay fees, taxes and further expenditures demonstrably connected to the maintenance and administration of real estate abroad during the period when the ownership right to this real estate is in effect.
§ 7
Other Obligations
1) Payments and transfers to and from abroad can be effected non-cash only through foreign exchange entities having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities, unless otherwise stipulated in a permit of a foreign exchange authority.
2) Residents and non-residents are obliged to submit to a foreign exchange entity a valid foreign exchange permit if it is required according to this Act, and, when demanded, to submit documents proving the purpose of the payment or transfer required.
3) Residents and non-residents are obliged, upon demand of a foreign exchange entity, to specify the purpose of the payment or transfer from abroad if the purpose is not given.
§ 8
Rights and Obligations of Foreign Exchange Entities
1) A foreign exchange entity is obliged, prior to executing a particular payment or transfer, to require submission of a valid foreign exchange permit if this permit is required under this Act.
2) A foreign exchange entity is entitled, prior to executing a particular payment or transfer, to require submission of documents proving the purpose of the payment or transfer required.
3) A foreign exchange entity is entitled to ask a recipient of a payment or transfer from abroad to specify its purpose if this purpose is not given.
4) A foreign exchange entity may execute only operations which are in compliance with the Foreign Exchange Act, legal regulations issued for its implementation, international agreements by which the Czech Republic is bound and which regulate relations otherwise regulated by this Act in a manner different to this Act, and with foreign exchange licences, licensing certificates for money exchange bureaux activities issued under a separate Act and foreign exchange permits (hereinafter "foreign exchange regulations").
5) A foreign exchange entity is obliged without unnecessary delay to report to a respective foreign exchange authority on breaches found of foreign exchange regulations or suspicion of their breaching.
6) The Czech National Bank shall declare, through a Regulation issued in full wording in the Collection of Laws, the procedure for foreign exchange entities in effecting payments and transfers to and from abroad and vis-a-vis non-residents.
§ 9
Trading in Foreign Exchange Values
1) Only foreign exchange entities are allowed within the scope stipulated by the banking licence or foreign exchange licence to trade in foreign exchange values, to effect payments and transfers vis-a-vis abroad, or provide money services vis-a-vis abroad as a business activity.
2) A foreign exchange licence is not required to execute transactions with publicly tradable foreign bonds denominated in Czech currency, issued in the Czech Republic under § 11 item 1, for persons who were granted a permit to carry out this activity pursuant to a separate Act.
3) Persons who are not foreign exchange entities having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities may execute a trade in foreign exchange values only with a foreign exchange permit from a foreign exchange authority, unless otherwise stipulated by this Act. Foreign exchange permit is required also in cases when such a trade is intermediated by a foreign exchange entity, unless otherwise stipulated by this Act.
4) The Czech National Bank may declare, through a Regulation issued in full wording in the Collection of Laws, the terms for foreign exchange entities when effecting trade in foreign exchange values, including the procedure for handling forged or altered money in Czech or foreign currency. The terms of effecting trade in foreign securities for foreign exchange entities under § 3, item 7, may be declared by the Czech National Bank through a Regulation issued in agreement with the Ministry of Finance and published in full wording in the Collection of Laws.
§ 10
Purchase and Sale of Foreign Currency and Gold
A resident or a non-resident is allowed to purchase or sell, without a foreign exchange permit, foreign currency or gold, only provided that one of the following applies:
a) he is a foreign exchange entity having a banking licence with a required scope of activities, or foreign exchange licence with a required scope of activities,
b) the second participant in the trade is a foreign exchange entity which executes this trade in its name and on its own account,
c) one of the participants in the trade was granted a foreign exchange permit by a foreign exchange authority,
d) this concerns the purchase or sale of money during a stay abroad ,
e) this concerns an incidental purchase or sale of money in the Czech Republic: none of the participants in this trade may publicly offer the purchase or sale of money.
§ 11
Operations in Foreign Securities
1) The issue of foreign securities for public and non-public trade in the Czech Republic or their introduction on the domestic market is possible only with a foreign exchange permit from the Czech National Bank. In cases where a separate Act requires a permit from the Ministry of Finance, this foreign exchange permit shall be a precondition for its granting.
2) A resident who is not a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities is allowed to conclude an agreement on the purchase of a foreign security and buy a foreign security, or, except for a direct investment, a bill of exchange or a cheque, accept from a non-resident foreign securities as reimbursement for his financial claim on the non-resident only with a foreign exchange permit from a foreign exchange authority.
3) A foreign exchange permit under item 2 is not required for the purchase of:
a) foreign securities within the framework of a direct investment under § 1, letter k,
b) foreign securities from an own account of a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities,
c) foreign securities effected through a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities, in its own name on the account of a resident,
d) publicly tradable foreign bonds denominated in Czech currency issued in the Czech Republic under item 1,
e) employee shares and other financially preferred shares issued by a non-resident if the shares are being purchased by his domestic employees or domestic employees of a resident in whose enterprise the issuer has an ownership participation,
f) foreign securities acquired from another resident pursuant to a separate Act.
§ 12
Operations in Financial Derivatives
1) A resident who is not a foreign exchange entity having a banking licence with a required scope of activities or foreign exchange licence with a required scope of activities may conclude agreements on financial derivatives and trade in them only with a foreign exchange permit from a foreign exchange authority. A foreign exchange permit is not required if an agreement or a trade is to be concluded with a foreign exchange entity having a banking licence with a required scope of activities or foreign exchange licence with a required scope of activities.
2) The Czech National Bank may declare, through a Regulation issued in agreement with the Ministry of Finance and published in full wording in the Collection of Laws, the terms of operations in financial derivatives carried out by foreign exchange entities.
§ 13
Money Market Operations
The Czech National Bank may declare, through a Regulation issued in agreement with the Ministry of Finance and published in full wording in the Collection of Laws, the terms for carrying out transactions of residents, except for banks, in Czech or foreign currency on the foreign money market.
§ 14
Extending Financial Credits
1) A resident who is not a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities may conclude an agreement on the granting of a financial credit to a non-resident and provide a financial credit to a non-resident only with a foreign exchange permit.
2) A resident who is not a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities may give his consent that a non-resident take over a debt from a financial credit extended to another resident only with a foreign exchange permit.
3) A foreign exchange permit is not required:
a) if the granting of a financial credit is a direct investment under § 1, letter k, on the condition that the credit is not reimbursed within five years from the date of its receipt,
b) when granting a loan by a resident to a non-resident if it concerns a loan between natural persons not intended for business activities.
§ 15
The Use of Sureties
A resident who is not a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities may provide a guarantee or give an order to secure an obligation of a non-resident only with a foreign exchange permit from a foreign exchange authority.
§ 16
Other than Direct Investments
A resident who is not a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities may only with a foreign exchange permit from a foreign exchange authority enter into contractual commitments and fulfil financial commitments in Czech currency or foreign exchange values connected to the establishment or acquisition of an ownership participation in a business activity abroad or participation in a business abroad as well as
in an activity abroad which does not possess business activity features, unless this is a
direct investment under § 1, letter k. The foreign exchange permit to buy a foreign security, required under § 11, item 2, substitutes for the permit required pursuant to this provision.
§ 17
Acquiring Real Estate in the Czech Republic
A non-resident who is not a citizen of the Czech Republic may acquire an ownership right towards real estate in the Czech Republic, unless otherwise stipulated by a separate Act, only:
a) by heritage,
b) for the diplomatic representation of a foreign country under the terms of reciprocity,
c) if it is real estate acquired in an unapportioned co-ownership of a married couple of which only one is a non-resident, or where a non-resident acquires property from a husband, wife, parents or grandparents,
d) through the exchange of domestic real estate which he owns for other domestic real estate the usual price of which does not exceed the usual price of the former real estate,
e) if he has a preemption by reason of a proportioned co-ownership of real estate,
f) if it is a construction built by a non-resident on his own land,
g) provided it is explicitly so stipulated by a separate Act.
§ 18
Import and Export of Banknotes and Coins
1) The import and export of banknotes and coins in Czech currency and foreign currency for travel purposes or in a postal or other consignment is limited, the amount of such limit being set by an Order of the Czech National Bank and the Ministry of Finance. When setting the limit, the need to protect the public interest is considered. Should a limit not be set, the import and export of banknotes and coins in Czech currency and foreign currency is unrestricted.
2) Import and export of banknotes and coins above the limit set under item 1 is possible only with a foreign exchange permit from a foreign exchange authority.
3) Border customs authorities are obliged upon the request of an importing or exporting person to take into custody banknotes and coins imported or exported above the limit set under item 1 if the importing or exporting person does not submit a foreign exchange permit, and with regard to the place and the time of crossing the border, is not able to pass these values into the custody of a foreign exchange entity having a banking licence with a required scope of activities or a foreign exchange licence with a required scope of activities. However, the right to return the object of such custody expires and this object shall belong to the State if the person upon whose request the object was taken into custody, does not ask for its return within one year from the day when the customs authority took the object into custody.
4) A foreign exchange permit under item 2 is not required for:
a) the import and export of banknotes and coins performed by a foreign exchange entity stated in § 1, letter m, point 1, in connection with the performance of its activities,
b) the import of banknotes and coins acquired for provision of transport and associated services abroad,
c) the import of banknotes and coins in connection with the fulfilment of an obligation under § 6.
5) An importing or exporting person is obliged to prove, by the submission of a relevant document, that this involves banknotes and coins for the import and export of which a foreign exchange permit is not required under item 4.
§ 19
If the balance of payments development is favourable, the Government may, through a Decree, stipulate further cases when a foreign exchange permit is not required.
PART III
Foreign Exchange Supervision, Inspection and Examination
§ 20
Supervisory Authorities
1) Within the framework of its powers, a foreign exchange authority supervises the fulfilment and adherence to foreign exchange regulations. In connection with this, a foreign exchange authority is entitled to require the necessary co-operation of persons being supervised, particularly the submission of required documents and explanations.
2) When carrying out an on-site foreign exchange inspection, the relations between the foreign exchange authority and the persons being inspected are governed by the basic rules of supervisory activity as stipulated by a separate Act, unless otherwise stipulated by this Act.
3) Customs authorities perform the examination(15) of the import and export of banknotes and coins pursuant to § 18 and of the full observance of the reporting obligation pursuant to § 5, item 2. In this connection, they are authorised to require the necessary co-operation of the persons being examined.
§ 21
Obligations of Persons Being Inspected or Examined
1) Persons being inspected or examined are obliged, in connection with a foreign exchange inspection or an examination by customs authorities, to provide the foreign exchange authority or customs authority with the necessary co-operation.
2) If the import or export of banknotes and coins is conditioned by a foreign exchange permit or by another document pursuant to § 18, items 2 and 5, the importing or exporting person is obliged to submit these documents to the customs authorities when importing or exporting. If a person being examined does not submit the said documents, the customs authority does not permit these banknotes and coins to be imported or exported.
3) Persons sending abroad postal or other consignments containing banknotes and coins for whose export a foreign exchange permit is necessary, or travellers cheques, gold or gold coins, are obliged to submit such a consignment to the customs authority for examination and, if necessary, to fulfil the reporting obligation with this authority.
The Procedure for Foreign Exchange Authorities when Finding a Breach of Foreign Exchange Regulations
§ 22
1) If a foreign exchange authority finds that a person has breached the foreign exchange regulations (§ 8, item 4), it sets an adequate term for him to remedy the shortcomings or it orders termination of the unauthorised activity.
2) Exceeding the scope of a permit and violating the terms stipulated in a foreign exchange licence, licensing certificate for money exchange bureaux activities or foreign exchange permit is deemed a breach of foreign exchange regulations.
3) According to the degree and nature of the breach of the foreign exchange regulations, a foreign exchange authority, in an administrative procedure:
a) cancels the foreign exchange permit, restricts, suspends or revokes the foreign exchange licence,
b) imposes a financial fine, and this also despite the fact that the shortcomings were remedied within the set term.
4) If a foreign exchange authority finds a breach of foreign exchange regulations regarding the carrying out of money exchange bureaux activity, it may propose the suspension or cancellation of the licensing certificate for money exchange bureaux activities.
5) A fine may also be imposed jointly with the procedure pursuant to item 1, item 3, letter a), and item 4. If the breach of foreign exchange regulations is less serious, and for a special reason, the foreign exchange authority may refrain from fine imposition.
6) When a customs authority finds a breach of foreign exchange regulations, it proceeds pursuant to § 25, 26, 27 and 28.
7) An appeal may be filed against a decision of a foreign exchange authority pursuant to item 3. An appeal filed against a decision pursuant to item 3, letter a), does not defer execution of the decision.
8) When finding a breach of foreign exchange regulations by a bank, the Czech National Bank proceeds pursuant to a separate Act.
Fines
§ 23
1) A foreign exchange authority, pursuant to § 22, item 3, letter b), imposes on a person who breaches foreign exchange regulations:
a) when a person does not fulfil the reporting obligation, including the stating of false or incomplete data, or does not fulfil the obligation to provide assistance to a foreign exchange authority during the performance of a foreign exchange inspection, a fine of up to CZK 1 million,
b) when a person does not fulfil the obligation pursuant to § 6, a fine of up to 50% of the non-transferred amount,
c) when a person does not fulfil the depository obligation, a fine of up to 0.3% of the obligatory deposit for each calendar day during which the depository obligation was not fulfilled,
d) when a person does not take actions ordered him under this Act to remedy the shortcomings within the set period, a fine of up to CZK 1 mil.
e) concerning other activities in breach of foreign exchange regulations, a fine of up to 50% of the amount to which the unauthorised activities relate,
f) concerning activities in breach of foreign exchange regulations, when it is not possible to establish the volume of the amount to which the unauthorised activities relate, a fine of up to CZK 50 mil.
2) Where there is a simultaneous breach of foreign exchange regulations pursuant to letters a) to f), a fine may be imposed even in one decision separately for each breach of the foreign exchange regulations.
3) Pursuant to § 22, item 3, letter b), a fine may be imposed within one year from the day of finding the breach of foreign exchange regulations, but no later than within five years from the day when the foreign exchange regulations were breached.
4) In specifying the amount of a fine, in particular the degree, manner and duration of the foreign exchange breach shall be considered.
§ 24
1) A fine imposed under § 22, item 3, letter b), is an income of the state budget of the Czech Republic and is due for payment within 30 days from the day when the decision to impose a fine came into effect.
2) A fine, when due, is levied by the foreign exchange authority which imposed it. The fine is enforced by a fiscal office.
Procedures for a Customs Authority when Finding a Breach of Foreign Exchange Regulations
§ 25
1) If a customs authority finds that a resident or a non-resident breached foreign exchange regulations during import or export, it imposes a fine upon him up to the following amount:
a) 10% of the amount of imported or exported banknotes and coins in the case of banknotes and coins being imported or exported without a foreign exchange permit or other document pursuant to § 18, item 2 and 5, or
b) CZK 1 mil., if he does not fulfil the reporting obligation pursuant to § 5, item 2.
2) The breach of foreign exchange regulations is adjudicated by the customs authority in whose territorial district the foreign exchange regulations were breached.
3) The customs authority competent to adjudicate the breach of foreign exchange regulations, pursuant to item 2, may submit the matter for adjudication to the customs authority in whose territorial district the resident who had breached the foreign exchange regulations has been permanently domiciled, or in which he works.
4) When specifying the amount of a fine, the customs authority takes into account, in particular, the degree, manner, time of duration and consequences of the breach of foreign exchange regulations.
5) A fine imposed under item 1 is due within 30 days from the day when the decision on its imposition came into effect. The fine is an income of the state budget of the Czech Republic.
6) When levying and enforcing fines, the customs authority proceeds pursuant to a special regulation.
7) A fine may be imposed within one year from the day of finding a breach of foreign exchange regulations, but no later than within five years from the day when the regulations were breached.
§ 26
1) By its decision, the customs authority may, for the purpose of adjudicating the breach of foreign exchange regulations, detain 10% of the total amount of the imported or exported banknotes and coins used when breaching the regulations. A filed appeal shall not defer execution of the decision.
2) The person to whom a decision was delivered on the detention of banknotes and coins is obliged to surrender them to the customs authority. If the detained banknotes and coins are not surrendered to the customs authority on demand, they may be withdrawn from the person who holds them. The person who surrendered the banknotes and coins, or from whom they were withdrawn, shall be issued by the customs authority a confirmation of their surrender or withdrawal.
3) If the fine imposed is not voluntarily paid when due, the customs authority shall use for its payment the detained banknotes and coins.
4) If the banknotes and coins detained are not necessary for further proceedings, and if their use to pay the fine does not come into consideration, the customs authority shall return the banknotes and coins to the person who surrendered them, or from whom they were withdrawn.
§ 27
1) If a fine does not exceed the amount of CZK 5 000, it may be imposed through an on-the-spot-ticket fine if the breach of foreign exchange regulations is clearly established, and if the person who had breached the foreign exchange regulations is willing to pay the fine on the spot. It is not possible under the procedure of an on-the-spot -ticket fine to file an appeal.
2) The ticket, through which the imposition of a fine shall be decided, shall indicate to whom, when and for which breach of legal obligations the fine was imposed. At the same time, the ticket shall hold valid as receipt for the cash payment of the on-the-spot fine.
§ 28
Unless otherwise stipulated by this Act, adjudication proceedings carried out by a customs authority on a breach of foreign exchange regulations are governed by the Administrative Rules.
PART FOUR
SPECIAL PROVISIONS
§ 29
1) The depository obligation is an obligation of persons, in the interests of the stability of the currency, to hold for a certain period on a special account with a bank in the Czech Republic, a set percentage of the volume of money:
a) from interbank deposits by foreign banks with banks in the Czech Republic,
b) from deposits by non-residents who are not a bank, with banks in the Czech Republic,
c) from financial credits accepted by a resident from a non-resident,
d) acquired from the issue of domestic bonds and other securities issued abroad, to which is connected a right to financial settlement.
2) During the duration of a depository obligation, persons to whom the depository obligation pertains are not allowed to use freely the money deposited on this account and they are not allowed to transfer to another person the right to disburse this money.
3) The Czech National Bank through a Regulation issued in agreement with the Ministry of Finance, and published in full wording in the Collection of Laws, specifies the persons exempted from the depository obligation, the extent, duration and other details applying to this obligation pursuant to item 1, and notifies with which bank the special account is being held.
PART FIVE
COMMON, Authorising, Temporary and Final Provision
§ 30
1) A foreign exchange authority, when exercising its powers pursuant to this Act, is governed by the Administrative Rules with the exceptions under provisions of § 3, item 5 and § 22, item 7.
2) Administrative procedures do not refer to the procedures pursuant to § 22, items 1 and 4.
§ 31
Relations vis-a-vis International Agreements
The provisions of this Act shall be used unless otherwise stipulated by an international agreement by which the Czech Republic is bound.
§ 32
A State of Emergency in the Foreign Exchange Economy
1) During a state of emergency in the foreign exchange economy, if the solvency vis-a-vis abroad is immediately and gravely jeopardised, it is forbidden, unless a foreign exchange authority has granted a special permit:
a) to acquire foreign exchange values for Czech currency,
b) to effect any payments and transfers from the Czech Republic abroad, including transfers of money between banks and their branch offices,
c) to deposit money on accounts abroad .
2) In a state of emergency in the foreign exchange economy, if the internal currency balance of the Czech Republic is immediately and gravely jeopardised, it is forbidden, unless a foreign exchange authority has granted a special permit:
a) to sell domestic securities to non-residents,
b) to accept financial credits from non-residents,
c) to establish in the Czech Republic accounts for non-residents and to deposit money to accounts of non-residents,
d) to transfer money from abroad to the Czech Republic between banks and their branch offices .
3) The Government may declare a state of emergency in the foreign exchange economy, when the balance of payments development is unfavourable and immediately and gravely jeopardising the solvency vis-a-vis abroad or the internal monetary balance of the Czech Republic. A state of emergency in the foreign exchange economy shall start on the day when declared by the Government in an announcement in the mass media, and shall terminate on the day set by the Government when declaring it, but no later than within three months from the day when declared in the mass media.
4) When declaring a state of emergency in the foreign exchange economy, the Government, at the same time, shall specify if it is a state of emergency in the foreign exchange economy to which relate the prohibitions under items 1 or 2 or both these items.
5) A foreign exchange authority shall grant, for the period of a state of emergency, a special permit pursuant to items 1 and 2 only in case of danger to the life and health of persons, the defence and safety of the State and the running of its diplomatic services, and for activities which lead to a demonstrable improvement of the balance of payments position. A special permit is not required if the participant in a legal relation is the Czech Republic or the Czech National Bank.
§ 33
Temporary Provisions
1) A foreign exchange permit granted pursuant to the preceding Foreign Exchange Act is deemed a foreign exchange permit pursuant to this Act if, according to its provisions, it continues to be required.
2) Persons specified in § 1, letter 1, point 2 or 3, performing activities on the basis of a foreign exchange permit pursuant to the preceding Foreign Exchange Act must ask a foreign exchange authority to grant a foreign exchange licence pursuant to this Act no later than one year from its coming into effect, otherwise the foreign exchange permit or authorisation to carry out activities expires pursuant to this Act after the passage of this period.
3) Proceedings started into activities not authorised pursuant to preceding regulations which are activities not unauthorised pursuant to this Act are terminated on the day this Act comes into effect.
4) Activities which had been performed in breach of the preceding Foreign Exchange Act, and which are unauthorised also pursuant to this Act, are punished in accordance with preceding regulations with the exception under item 5. Proceedings dealing with these activities started prior to this Act coming into effect are to be continued to a conclusion in accordance with preceding regulations, with the exception under item 5.
5) Persons who, pursuant to the preceding Foreign Exchange Act, committed a transgression of the foreign exchange regulations cannot be punished after the effect of the preceding Act terminates. Proceedings in the matter of foreign exchange transgressions pursuant to the preceding Act which are not finished by a final decision are terminated on the day this Act comes into effect.
§ 34
Nullifying Provision
The following shall hereby be nullified:
1) The Foreign Exchange Act No. 528/1990 of the Coll. of Laws, in the wording of Act No. 228/1992 of the Coll. of Laws, Act No. 264/1992 of the Coll. of Laws, and Act No. 82/1995 of the Coll. of Laws.
2) The Order of the Federal Ministry of Finance and the State Bank of Czechoslovakia No. 303/1992 of the Coll. of Laws through which the Foreign Exchange Act is implemented, in the wording of Order No. 169/1994 of the Coll. of Laws.
3) The Regulation of the Czech National Bank No. 282/1993 of the Coll. of Laws, stipulating the terms of some trades in foreign exchange values carried out by banks.
4) The Regulation of the State Bank of Czechoslovakia No. 35/1992 of the Coll. of Laws, stipulating procedures of foreign exchange residents-legal persons when accepting payments in foreign exchange means in cash, concerning records and reporting.
§ 35
Effect
This Act enters into effect on 1 October, 1995.
Milan Uhde
Václav Havel
Václav Klaus
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