Cabinet Approves New Law against Letterbox Companies

Justice Minister Lucia Zitnanska (stock photo by TASR)

Bratislava, August 17 (TASR) – Thanks to a new law against letterbox companies that was approved by the Cabinet at its session on Wednesday, the state will require more information on private companies when doing business with them.

This law is one of three legislative proposals that Justice Minister Lucia Zitnanska (Most-Hid) submitted for Wednesday’s session. The others are a law introducing electronic payment orders and amendments to the Criminal Code regarding extremism and racially motivated crimes.

The new law is a kind of follow-up to existing legal regulations aimed against money laundering. Zitnanska said that it could significantly improve the level of transparency of relations between the state or public administration and the private sector. It covers all forms of operations involving public resources. Every firm that would like to do business with the state will have to sign up with the registry of public sector partners and disclose its whole ownership structure.

The registry should be managed by Zilina District Court and be freely accessible via the internet. The data will be verified by lawyers, banks, tax advisors, auditors and notaries, which will then authorise an applicant to be included in the registry if it has been proven trustworthy. If a firm supplies false information about itself, severe sanctions will follow.

Not only companies applying for money from the state or local administration budgets will have to register, but also those applying for money from state funds or state-run companies. Even suppliers of goods and services for health insurance companies will have to be registered.

Public officials will have to be registered on the list as well, and not only as end users. If they are part of the management or ownership structures of a private company, they will have to reveal this. False data could result in their dismissal or in the stripping of profits from the firm concerned.

All those taking part in a public competition or restructuring that claim receivables worth more than €1 million from an entity that is or has been registered in the last five years as a partner of the public sector will have to register as well.

Non-governmental organisations will be obliged to register only if they apply for a contract ordered by the state or public administration.

Firms listed on the stock market won’t be obliged to register, as they already have to disclose certain information and are under supervision. Banks receiving loan repayments from the state or local authorities and entities supplying representative offices abroad won’t have to be enrolled, either.