A number of amendments to the law in the form of the Terrorist Financing Protection Act, the Asylum Act and the Health Insurance Act were passed at the end of 2024. Below we provide an overview of the main changes effective from the new year.
◻ Anti-Money Laundering Act
The Government of the Slovak Republic adopted an amendment to Act No. 297/2008 Coll. on the Protection against the Legalization of the Proceeds from Crime and the Financing of Terrorism. The draft amendment aims to strengthen the legal framework for the protection against illicit financial flows, improve the effectiveness of the prevention of money laundering and terrorist financing and improve cooperation with international organizations.
The main objective of the amendment is to improve the system of prevention against legalization of proceeds of crime (money laundering) and financing of terrorism in the Slovak Republic. It aims to strengthen the obligations for businesses and financial institutions involved in carrying out transactions, as well as to ensure stricter governance and coordination in the fight against these threats, which arise from
The aim of the amendment of the Anti-Money Laundering Act is based on European legislation, the conclusions of which we summarized in our June tax newsletter.
The main changes focus on the following areas:
- Increase in requirements on businesses and financial institutions
The amended law tightens the obligations of business entities, in particular financial institutions, in the area of client identification and monitoring of suspicious transactions. Increased attention is paid to the detailed monitoring and verification of customer identities, which have an impact on the prevention of money laundering and terrorist financing.
This focuses on:
- Cryptoasset transactions
- Trust Funds
- Limited partnerships and public companies and their members
- Persons from a high-risk country
- To the beneficiary of a life insurance policy
- End-user benefits
- Clients of the pan-European pension product
- Banks and financial institutions
- Stricter rules on digital and cryptocurrency transactions
The new rules impose obligations on platforms dealing in cryptocurrencies to carry out thorough checks to ensure transparency of financial transactions and prevent the misuse of digital assets for money laundering or terrorist financing.
The following authentication mechanisms shall be put in place for cryptoasset clients and service providers:
| 1. | determine whether the partner institution is licensed or registered |
| 2. | gather sufficient information about the partner institution to understand clearly the nature of its business, its reputation and, on the basis of publicly available information, whether it has been the subject of an investigation or proceeding in relation to a breach of the anti-money laundering and counter-terrorist financing measures |
| 3. | evaluate the partner institution’s control mechanisms for the prevention and detection of money laundering and terrorist financing |
| 4. | obtain the consent of the statutory body or a designated person before entering into a new correspondent relationship |
| 5. | identify and record the duties and responsibilities associated with the correspondent relationship in terms of the application of AML/CFT measures, in order to clearly understand the respective roles of each institution in this area |
| 6. | in relation to cryptocurrency payment and correspondent accounts, ascertain whether the peer institution has verified the identification of the customer who has direct access to the peer institution’s account and has exercised basic due diligence in relation to that customer |
A virtual currency wallet service provider or a virtual currency exchange service provider who was an obliged person until 14 January 2025 shall be deemed to be an obliged person from 15 January 2025 until the termination of its trade license.
- Increase in sanctions and penalties
The sanctions apply not only to financial institutions, but also to individuals involved in illegal activities. The aim is to motivate businesses and organizations to comply more closely with the rules and thus prevent the financial system from being used for illegal purposes.
- Improving cooperation with international organizations
The Bill highlights the need for international cooperation in the fight against money laundering and terrorist financing. The new changes improve the possibilities for information exchange between national and international tax and security authorities.
◻ Residence of Aliens and the Asylum Act
The Government of the Slovak Republic adopted amendments to the Act on the Residence of Aliens and the Act on Asylum in order to streamline the processes of granting temporary refuge status as well as the asylum policy with the standards of the European Union (securing the EU labour market).
The government’s proposal aims to optimize administrative procedures, improve conditions for foreigners seeking asylum and strengthen the protection of asylum seekers’ rights.
- Objective of the amendment
The amendment also aims to ensure that the Slovak Republic is able to respond effectively to current migration challenges and to fulfil its obligations in the area of human rights protection.
Below we summarise the main changes to the Aliens Residence Act:
- Adjustment of conditions for long-term residence of foreigners
The modified conditions will focus on applicants who apply for long-term residence or are in the position of entrepreneurs, professionals who come to Slovakia to work.
- New conditions for work and study
A more streamlined permitting process is introduced for professionals and students wishing to take up long-term residence for the purposes of study or work. These conditions are also intended to improve employment in areas where there is a shortage of workers.
- Increased control of the stay of foreigners
The control of the stay of foreigners will focus on verifying compliance with the conditions under which the residence permit was granted in order to prevent illegal migration.
- Simplification of procedures for third-country nationals
Transparency and predictability of the whole process is introduced for third-country nationals, including simplification of the application for residence, registration and issuance of visas and permits.
On this basis, the electronic submission of residence applications is being introduced:
- Renewal of temporary residence
- Blue card renewal
- Granting permanent residence for an indefinite period
- Granting long-term residence
- Registering as an EU national
- Issuing a residence document
- Issuance of an alien’s passport
However, e‑application is only possible if applicants have already submitted their biometric data to the authorities. The changes affecting the rules for accommodation of Ukrainian citizens will enter into force on 1 March 2025.
Below we summarise the main changes to the Asylum Act:
- Streamlining the asylum procedure
The amendment will reduce the administrative burden by allowing Slovak companies issuing invitation letters to Schengen visa applicants to submit proof of bank account balance instead of a three‑month bank statement to verify the invitation letter.
- Enhancing the protection of the rights of asylum seekers
The change to the law aims to allow asylum seekers access to information about the asylum procedure and legal aid, as well as to avoid unnecessary delays throughout the procedure.
- Improving processes for repeated asylum applications
In the reapplication process, the conditions for reapplication are adjusted to focus the process primarily on those on the waiting list who are genuinely in need of asylum.
- Introducing new rules for children and families
The amendment introduces new treatment rules for vulnerable groups – children and families. Asylum-seeking children and families will have access to specific services to ensure they are protected and adequately cared for throughout the process.
These changes will also have a minor impact on health and social insurance laws. At the same time, we foresee a positive impact on labour law and employment conditions on the side of employers who will be able to employ other nationals.
◻ Health Insurance Act
From January 2025, public health insurance will cease if the following criteria are met:
a) the insured person does not have a general outpatient care agreement with any general outpatient care provider,
b) the competent health insurance company has not registered the provision of health care to the insured person in the territory of the Slovak Republic or abroad in the last five years,
c) no communication from the insured person has been recorded by the relevant health insurer in the last five years; and
d) the insured person has not changed health insurers in the last five years
At the same time, it is added that for posted workers who pay health insurance contributions to the host country (on the basis of the A1 form) and the health insurer only finds out about this after the end of the contribution period, the application for public health insurance is valid before the start of that period.
In carrying out work activities for:
- charities, communities
- a religious order, society or similar community
- the insured person is required to submit a copy of the agreement on the gratuitous performance of the activity, which contains their identification data within 8 days.
In this case, if the work activity is carried out exclusively for these organizations (the employee ceases to be an employee), the health insurance will be paid by the state on behalf of the individual.
In addition, the Act on Health Insurance Companies is amended, for which economically justified costs are defined as follows:
- a contribution to the activities of the emergency call centres of the ambulance service
- contribution to the operation of the Authority
- overpayment from the annual insurance premium settlement
- taxes and fees paid to the state budget
- the amount by which the participation limit has been exceeded
- contribution to the National Centre for Health Information
- reimbursement of reimbursement for the provision of health care in the framework of inpatient emergency services according to a special regulation
- contribution to the activities of the National Institute for Health Value and Technology
At the same time, the concept of technical provisions is replaced by the concept of claims expense.
