Czech Republic

KDU-CSL Party Congress: Leaders re-elected

25 May 2015

KDU-CSL party members met in the South Moravian town of Zlin to elect party chairman (Pavel Bělobraádek – unopposed), first deputy chairman (current Minister of Agriculture Marian Jurečka – re-elected) and four chairmen (Zuzana Roithová, Jan Bartošek were re-elected, Ondřej Benešík and Jiří Mihola were newly elected). According to P.Bělobrádek, Christian Democrats should aim at victory in the 2016 regional elections. The party has already succeeded in the elections to the Chamber of Deputies, the Senate, municipal elections, and elections to the European Parliament.

For more information in English clck here and here.

To read more in Czech click here and here.

The party congress passed a number of resolutions, expressing support to the euro adoption, territorial integrity of Ukraine, Transatlantic Trade and Investment Partnership between the EU and the USA, among others. Resolutions were adopted in the areas of foreign policy, political islam, transportation, agriculture, healthcare, national security and postal service.

To read more click here.

Czech Legislation Update March-April 2015

01 May 2015

At its session on 16 March 2015, the Government passed a material intent of the new Act on Public Procurement. New Directives of the EU in the field of public procurement (2014/24/EU, 2014/25/EU, 2014/23/EU) introduce major changes. Their transposition, according to the authors of the material intent (the Ministry for Regional Development), creates the need for brand new Act on Public Procurement.  The deadline for submitting the draft act to the Government is 30 June 2015, according to the respective resolution of the Government. The Ministry for Regional Development already sent the draft to the inter-ministerial round of comments on 23 April. Ministries have 20 days for submission of their comments. The Chamber of Deputies could review the draft act in autumn 2015. To view the material intent, click here. To read more about the preparation of the act, click here and here.

 

The draft amendment to the Act on Free Access to Information, Bill no. 395, had its first reading in the Chamber of Deputies on 1 April 2015. The stated intent of the Bill is to harmonize Czech legislation with the EU’s Public Sector Information Directive (2013/37/EU) on re-use of public sector information. The PSI Directive focuses on the economic aspects of re-use of information rather than on the access of citizens to information. The re-use of public sector information covers commercial and non-commercial use by users outside the public sector (businesses, NGOs, academic research). The public sector information could be accessible also via remote access, for example.

 

The draft amendment to the Insurance Act, Bill no. 414, had its first reading in the Chamber of Deputies on 8 April 2015 and is currently being debated in Committees of the Chamber. As of 1 January 2016 EU Directives 64/225/EHS, 73/239/EHS, 73/240/EHS, 76/580/EHS, 78/473/EHS, 84/641/EHS, 87/344/EHS, 88/357/EHS, 92/49/EHS, 98/78/ES, 2001/17/ES, 2002/83/ES and 2005/68/ES will be abolished and replaced by the Solvency II Directive, the aim of which is harmonization of the rules for the insurance and reinsurance businesses within the EU. The Solvency II Directive establishes the so-called EU Passport, which is a single licence for insurers to operate in all EU member states, given that they fulfill conditions set by the EU. The issuance of the passport-licence in the Czech Republic will fall under the competence of the Czech National Bank. The conditions for application and the process of licence issuance for entities with residence in the Czech Republic will stay more or less unchanged and the administrative burden related to the application for licence will be lower, the proponents of the draft amendment suggest. The licence will apply either to insurance or reinsurance business activities, i.e. it won’t cover both. The aim of the Directive is to minimize insolvency risks, too.



The Government passed a draft amendment to the Act on Universities, at its session on 15 April 2015. The draft amendment is currently in the Chamber of Deputies as Bill no. 464 and its intent is, among others, to regulate accreditation activities and ensure high quality of tertiary education in the Czech Republic, as well as regulate activities of branches of foreign universities operating in the Czech Republic. The Czech Republic experienced a surge in the number of university students between 2000 and 2014. In 2000, there were 8 private universities, compared with 44 private universities in 2014. The number of public universities increased by 2 (from 24 to 26) and the number of state universities decreased from 4 to 2 (3 army schools merged into 1) in the last 14 years. The number of new students entering Czech universities rised by 86 percentage points in that period and the share of those having tertiary education in the Czech population aged 25 to 64 grew from 10,96% to 19,28%. The diversity of study fields is high, with around 8829 study study fields in 2700 study programs (as of 30 June 2014). Source: The Czech Ministry for Education.



At its session on 23 April 2015 the Government rejected the draft amendment to the Act on State Prosecution. The Bill no. 432 is heading to the first reading in the Chamber of Deputies. The intent of the Bill is to reform the basic organization and management structure of the State Prosecution System and thus increase its effectivity. The Bill comprises also measures that establish liability of state prosecutors for lapses or mistakes.



The Chamber of Deputies of the Parliament of the Czech Republic passed the draft amendment to the Labor Code, Bill no. 376, in the first reading on 11 February 2015. The amendment suggests that provisions governing liability of an employer for damage caused as a result of work-related accidents and occupational disease, which are currently placed among transitional provisions of the Labor Code, should become an integral part of the Labor Code (in force from 1 January 2009). Originally, the administration of the employee accident insurance should have been transferred from employers to the social security system, based on the separate Act on Employee Accident Insurance. The Act should have come into force on 1 January 2010, but the actual date has been postponed several times - recently until January 2017. The Bill is heading to the second reading in the Chamber of Deputies.



Another draft amendment to the Labor Code, Bill no. 393 is heading to the first reading in the Chamber of Deputies. The intent of the Bill is to eliminate the institute of the so-called „karencni lhuta“. The employee, who has been recognized to be temporarily unfit for work (i.e. whose temporary incapacity for work has been recognized) or whose quarantine has been ordered, is entitled during the first 14 calendar days (or during the first 21 calendar days when it is from 1 January 2012 to 31 December 2013) of his temporary incapacity for work or quarantine to compensatory wage or salary. However, the employee is not entitled to compensation of wage or salary for the first three days of his/her temporary incapacity for work (the so-called karencni lhuta). The Czech Constitutiomal Court rejected the institute of “karencni lhuta“as unconstitutional in 2008, but it was re-introduced later.

ČSSD weekend party congress

16 March 2015

ČSSD party members met during the annual conference in Ostrava on 13th and 14th of March to pass a resolution stipulating concrete requirements for the Czech Republic: clearer legal definition of confict of interest, tighter rules for party financing and election campaigns as well as precise media legislation. All these measurements need to be adopted, according to ČSSD, to ensure more democratic state. Bohuslav Sobotka has been re-elected as the Chairman of the party with 85% of votes from the delegates. Milan Chovanec has been elected as the First Vice Chairman. Prague candidates have got a strong representation in the top leadership of the party which however seems to be a problem for the regional Mayors. Yet, the Prime Minister and Chairman of the party has commented that ČSSD cohesive and stable management is considered to be a good news for the stability of the government.

For more information click here, here and here. For coverage in English click here.

Robert Pelikan and new insolvency law - ambitious task going forward

06 March 2015

New Minister of Justice Robert Pelikán proclaims that new strategy towards insolvency proceedings is the priority task in his sector. “The major weakness of the law is in the people who are involved”, he mentions. He pledges that the Ministry of Justice will make considerable efforts to improve the cooperation with the Ministry of Interior, the Police and Public prosecutors´ office and create a new team that would be able to effectively identify crime in this area and find evidence on people who continue to make a living out of frauds.

Solving insolvency proceedings is a complicated issue that requires specific knowledge of commercial law and business affairs that the police and inexperienced prosecutors do not always possess. It is alarming that there are problems on so many levels, which the new ambitious minister however promises to deal with. For example, insolvency administrators are establishing new fictitious offices to get more cases and more remuneration; companies are filing bullying petitions to harm their competitors and exclude them from bidding for a public contracts; firms are changing their addresses on purpose just before the petition is filed; or certain companies go to a particular court where they have “good contacts”.

Read more about the issue of insolvency and Robert Pelikán click here and here

List of fraudulent Chinese companies was created

27 February 2015

As a reaction on the current state of affairs when more than 50 small and medium Czech companies fell victim to fraudulent Chinese companies the Association of Entrepreneurs published the list of these companies and handed over this list to the Embassy of the People’s Republic of China in order for the investigation to be started. These Chinese fraudulent companies often promise the opportunity of entering Chinese market, communicate on very professional level or even invite Czech entrepreneurs to travel to China and then demand payments in advance for materials, for bribes, for registration. Once the money is transferred they either send the products in lower quality than promised and stop all communication or simply stop communicating at all in the first place. Another bad practices are sending fake e‑mails from domains very similar to those of established companies or offer to sell the Chinese .ch domain for exaggerated prices.

For the list click here.

For more click here, here, here and here.

Prime Minister Bohuslav Sobotka and Minister of Transportation Dan Ťok visited South Korea

27 February 2015

On 23rd-27th February Czech Prime Minister Bohuslav Sobotka accompanied by Minister of Transportation Dan Ťok in accordance with government priorities of acquisition of investments and securing new jobs visited South Korea. There PM Bohulsav Sobotka met with Korean President Park Geun-hye and discussed mutual cooperation. As a result four important memoranda were signed. First one was Joint Declaration on the strategic partnership between the Czech Republic and the Republic of Korea outlining specific areas for further cooperation and promoting the relationship of both countries to the level of strategic partnership. Other memoranda were Memorandum of Understanding between the Ministries of Foreign Affairs of regular political consultations, Memorandum of Understanding and on cooperation in railway transport between the Ministry of Transportation and the Ministry of Land, Infrastructure and Transport of the Republic of Korea. These latter one was signed by Minister Dan Ťok. And Eventually also the Memorandum of Cooperation between Ministry of Defense of the Czech Republic and Ministry of National Defense of the Republic of Korea. As a result future cooperation in transportation, for example in constructing rail to Prague airport, in nuclear energy, in construction of new blocs in Temelín when the competition is resumed, or cooperation in joint defense programs is possible and Czech companies could benefit from this cooperation. Also the CzechInvest agency opened its mission in South Korea and some contracts, for example in the value of 120 million CZK for the porcelain manufacturer in Dubí, were already negotiated.

For more click here, here, here, here and here.

According to the court the Czech Republic unlawfully taxed emission permits

26 February 2015

According to the ruling of Court of Justice of the European Union the donation tax of 32 % on emission permits issued in between 2011 and 2012 was not in accordance with the European Law if more than 10 % permits were affected. According to the EU Directive the donation of emission permits in 2008-2012 should have been free and could only be paid for if the amount didn’t exceed the 10 % limit of permits. Last year ČEZ and Alpiq requested the tax reimbursement and company Ško-Energo addressed the court. The case finally got to the CoJ of the EU which ruled that the tax wasn’t in accordance with the European law. Using the above mentioned donation tax of 32 % the Czech Republic raised in 2011 4.8 bn CZK and in 2012 2.7 bn CZK that partly covered the program of support of the renewable resources. Now the Czech Republic will be forced to reimburse at least part of this money to the affected parties.

For more click here and here.

Government approved the so called “financial constitution”

23 February 2015

On its meeting on Monday 23rd February the government approved the act on fiscal responsibility, so called “financial constitution.” This act is originally drafted as the implementation of EU restrictions towards indebting of the member but in the Czech regulation it is extended and also includes the regulation of regions and municipalities. The key ratio is 55 % where the public debt in relation to GDP could not be higher than that otherwise the government would be forced to function on the basis of budgetary provisory and to cut the wages of state officials such as deputies, senators, judges etc. For the municipalities the ratio is less strict and is set to 60 %. In order for this act to be approved the government coalition needs to negotiate the constitutional majority within the Chamber of Deputies. These additional votes could be obtained from the deputies of Úsvit Movement that recently split themselves from their formal leader Tomio Okamura.

For more click here, here, here and here.

Institute for Nuclear Research began new promising project

22 February 2015

According to the press conference held on Monday 16th February the Institute for Nuclear Research in Řež began in December 2014 new promising research of properties of fluoride salts that could become the coolant for the IV. generation of nuclear reactors because of their excellent properties. This research was made possible thanks also to the Agreement on cooperation signed between the Czech Minister of Industry and Commerce and US Minister of Energy. Also the material for this experiment in the form of container of pure fluoride salt was provided by the USA. Last week the Institute also presented results of its study of small modular reactors with the output of maximum 300 MW that could power cities and smaller regions instead of classical gas or coal power plants. Core supporters of this technology claim that it could be used already in the next decade. This study was done in cooperation of Institute of Nuclear Research in Řež and Nuclear and Engineering Faculty of ČVUT.

For more click here and here.

Minister of Industry and Commerce Jan Mládek went to Ukraine

19 February 2015

On 16th and 17th February the Minister of Industry and Commerce Jan Mládek went to Ukraine on a business trip. Before the the trip Ministe Jan Mládek stated that his goal there would be to look for the opportunities on how to engage Czech firms in the process of reconstruction of Ukrainian economy. Once there Minister Mládek met with Ukrainian ministers of economic development and business, of infrastructure and of energy. Jan Mládek also spoke with PM aide for the stabilization of export Valeriy Piatnicky , deputy of Ukrainian Parliament Oksana Prodan and President of Ukrainian Confederation of Industrialists and Entrepreneurs Anatoliy Kynach. Among the key discussed topic were energy and energy security in terms of transit of oil, start of the Free Trade Zone with the EU that is scheduled to 1st January 2016. As for the proclaimed goal of this bussines trip the Czech Minister discussed it with his Ukrainian Minister of Infrastructure. They discussed the involvement of Czech companies in infrastructure projects and possible Ukrainian governmental guarantees accompanied with insurance of project from Czech Export Bank or EGAP.

For more click here and here.

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