Note: The binding text of Act No. 38/1994 Coll. and Act No. 220/2009 Coll. have been
published in the Collection of Statutes. This working version of Act No. 38/1994 Coll. only
serves for the information of entrepreneurs
ACT
38/1994 Coll.
Of 15 February 1994
On Foreign Trade with Military Material and on Amending Act No. 455/1991 Coll., on TradeLicensed Business (Trade Licensing Act), as amended, and Act No. 140/1961 Coll., the Criminal
Code, as amended, as amended.
PART ONE
General Provisions
Scope of the Application of the Act and Definition of Basic Terms
Sec. 1
(1) This Act governs the conditions of carrying out foreign trade in military material
(hereinafter referred to as “trade in military material”) and the powers of state administrative
authorities in this area.
(2) The discharge of state administration with respect to trade in military material must be
in accordance with the international undertakings of the Czech Republic and its foreign policy,
trade, and security interests.
Sec. 2
(1) For the purpose of this Act, trade in military material shall mean:
a) The export of military material from the Czech Republic to another country, including export
to another European Union Member State;
b) The import of military material to the Czech Republic from another country, including import
from another European Union Member State;
c) The purchase of military material from a foreign entity, the sale of military material to a
foreign entity 1), as well as the performance of other obligations with respect to a foreign entity
and the acceptance of other deliverables from a foreign entity, provided that their subject is
military material.
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(2) Trade in military material shall also mean:
a) The intermediation of the activities referred to in paragraph 1;
b) The purchase of military material abroad and its resale to a country other than a European
Union Member State.
(3) For the purpose of this Act, a written expression of will directed at the conclusion of
agreements regulating the relations referred to in paragraphs (1) and (2) shall also be deemed to
constitute trade in military material.
Sec. 3
(1) This Act shall not apply to:
a) The export or handling of military material outside of the territory of the Czech Republic
during the operation of the armed forces of the Czech Republic, security corps 1a), or basic units
of the integrated rescue system of the Czech Republic 1b), in accordance with the announced
international treaties by which the Czech Republic is bound, including their re-import;
b) The import or handling of military material in the Czech Republic in connection with the
operations of the armed or rescue forces of other countries, the United Nations, and other
international organisations in the Czech Republic, in accordance with announced international
treaties by which the Czech Republic is bound, including their re-export;
c) The export or handling of military material outside of the territory of the Czech Republic for
the purpose of providing humanitarian aid or involvement in international humanitarian rescue
operations, including their re-import, should the Government so decide, and subject to the
conditions set by the Government;
d) The import or handling of military material in the Czech Republic for the purpose of the
acceptance of humanitarian aid, including their re-export, should the Government so decide, and
subject to the conditions set by the Government.
(2) Furthermore, this Act shall not apply to the provision of information, sending and
receiving experts for the purpose of research, development, construction, production,
modification, repair, maintenance, use, and control of military material in study programmes
accredited under a special legal regulation 1c), which are carried out by a military institution of
higher education.
Sec. 4
The following items may not constitute the subject of trade in military material:
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a) Weapons of mass destruction, which means nuclear, chemical, and biological weapons 1d);
b) Goods that are governed by the provision of special legal regulations or announced
international treaties by which the Czech Republic is governed that prohibit the use, storage,
production, and transfer of anti-personnel miles and order their destruction 1e) and prohibit or
restrict the use of certain conventional weapons that may cause excessive suffering or may have
indiscriminate effects 1f), unless an announced international treaty by which the Czech Republic
is governed stipulates otherwise.
Sec. 5
(1) For the purpose of this Act, military material shall mean:
a) Products, their components, and spare parts that are, due to their characteristic technical and
structural properties, assessed as being constructed or adapted for use in armed forces or security
corps, or are used en masse in those forces in carrying out tasks in defending the country and
ensuring its security;
b) Machines, equipment, investment units, technologies, programs, technical documentation, or
instructions, made, modified, equipped, constructed, or adapted for military use, in particular for
the development, production, control, and testing of other products, their components, and spare
parts listed in paragraph a).
(2) For the purpose of this Act, military material shall also mean services rendered in
connection with the military material stated in paragraph (1), namely the making of repairs and
modifications and the provision of information, and the sending and receipt of specialists for the
purpose of research, development, construction, production, modification, repair, maintenance,
use, and control of military material.
(3) A list of military material under the previous paragraphs shall be set by an
implementation regulation, pursuant to the Common Military List of the European Union.
PART TWO
Permitting Trade in Military Material
Sec. 6
(1) Trade in military material may only be carried out by a legal entity with its registered
seat in the Czech Republic (hereinafter referred to as “legal entity”) on the basis of a permit.
(2) The permits shall be issued by the Ministry of Industry and Trade (hereinafter referred
to as the “Ministry”) on the basis of the binding positions of the authorities concerned, which are:
a) The Ministry of Foreign Affairs, as concerns the foreign-policy interest of the Czech
Republic, and upholding the obligations arising for the Czech Republic from international treaties
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as well as from the membership of the Czech Republic in international organisations;
b) The Ministry of the Interior, as concerns public order, security, and protection of the
population;
c) The Ministry of Defence, as concerns ensuring the defence of the Czech Republic.
(3) The authority concerned referred to in paragraph (2) shall issue its binding position
within 20 days of the delivery of a counterpart of an application; the binding position shall
contain the consent or refusal of the authority concerned concerning the issuance of the permit.
Conditions for the Issuance of a Permit
Sec. 7
(1) A permit may be issued provided that:
a) No more than 49% of the share capital of the legal entity is comprised of contributions made
by foreign persons, except for contributions by foreign persons whose registered seat or address
is in a European Union Member State;
b) The members of the statutory body of the legal entity and its representatives by registered
proxy, if it has been granted, and members of the supervisory board, if it has been set up:
1. Have attained the age of 21 years;
2. Are citizens of a European Union Member State;
3. Have their permanent residence in a European Union Member State;
4. Have capacity to effect legal acts;
5. Meet the requirements for holding certain positions in state authorities and organisations under
a special legal regulation 2);
6. Meet the requirements for carrying out sensitive activities under a special act 2a);
c) The trade in military material will be carried out by the legal entity in its own name and on its
own account;
d) The financial backing for trading in military material by the legal entity is sufficient, given its
planned extent.
(2) The conditions stipulated in paragraph (1) (b) must also be met by the founders or
establishing members of a legal entity, if they are natural persons and if the legal entity has not
yet been registered in the Commercial Registry.
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Sec. 8
Sensitive activities under a special act 2a) shall mean:
a) Holding the position of a member of the statutory body of a legal entity that engages in trade in
military material;
b) Holding the position of a representative by registered proxy of a legal entity that engages in
trade in military material;
c) Holding the position of a member of the supervisory board of a legal entity that engages in
trade in military material.".
Sec. 9
Application for a Permit
(1) The following particulars shall be stated in an application for a permit (hereinafter
referred to as an “application for a permit”):
a) The company name or name and registered set of a legal entity;
b) The name or names, surname, permanent residence, and personal identification number for
each member of the statutory body of the legal entity and the holder of a registered proxy, if it
has been granted, stating the manner in which they represent the legal entity, and the name or
names, surname, permanent residence, and personal identification number for each member of
the supervisory board, if it has been set up; for citizens of another European Union Member
State, the name or names, surname, date of birth, and other information shall be presented as can
clearly identify the given person;
c) The identification number of the person (hereinafter referred to as “identification number”), if
one has been assigned;
d) The line of business of the legal entity;
e) The specification of the military materials within the meaning of Sec. 5 (3) of this Act, with
the territorial focus of the trade and the requested period of application of the permit.
(2) The following documents shall be presented with an application:
a) The agreement or deed on the founding or establishment of the legal entity, in the form of a
notarial record or an agreement or deed with the officially verified signatures of the founders, if
the legal entity is not yet registered in the Commercial Registry;
b) The relevant documents, should the information listed in the application differ from that
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recorded in the Commercial Registry;
c) A certificate of compliance with the requirements for holding certain positions in state
authorities and organisations in accordance with a special legal regulation 3),
d) A document about the security competence of a natural person for carrying out sensitive
activities, or a certificate for a natural person for the confidentiality level Confidential or higher,
in accordance with a special act 2a), for members of the statutory body of the legal entity, holders
of a registered proxy, it if has been granted, and members of the supervisory board, if it has been
set up.
(3) A sample of the application for a permit shall be provided by an implementation
regulation.
Sec. 10
(1) A decision concerning the issuing of a permit shall contain:
a) The company name or name and registered seat of the legal entity and its identification
number, if such has already been assigned;
b) The specification of the military material that constitutes the subject of the trade;
c) The territorial focus of the trade in military material;
d) Other conditions for carrying out trade in military material set for the legal entity, in
accordance with Sec. 1 (2) of this Act;
e) The term for which the permit shall be valid, which shall not exceed five years;
f) The number of the permit, the date of its issue, a stamp and a signature of the authorised
employee of the Ministry.
(2) The legal entity for whom the permit was issued shall inform the Ministry in writing
of, and document, any change in the information contained in the application for the permit or the
documents attached to the application, within 30 days of the day on which that change occurred.
Sec. 11
(1) The Ministry shall not issue the permit if the conditions for its issuance set in Sec. 7
through 9 are not met, or if the issuance of the permit would threaten the foreign-policy or trade
interests of the Czech Republic or public order, security, and the protection of the inhabitants.
(2) A permit shall not be issued for the three year period after the completion of
insolvency proceedings or after the issuance of a previous decision whereby a permit to engage in
trade in military material was not issued, or after the termination of a permit under Sec. 13 (1)
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(d).
Sec. 12
(1) The Ministry shall render a decision concerning the application for a permit within 60
days of its delivery. An administrative appeal may not be filed against that decision.
(2) Trading in military material in accordance with the permit issued shall only be
possible after this line of business has been registered in the Commercial Registry.
Sec. 12a
(1) Trade in military material on behalf of the Czech Republic may also be carried out by
the Ministry of Defence or the Ministry of the Interior, if this is required in order to ensure the
defence and security of the Czech Republic, or if it is carried out as a part of aid to other
countries and provided the Government has so decided. The decision of the Government shall
substitute for a permit issued by the Ministry under Sec. 6.
(2) The decision of the Government under paragraph (1) shall contain:
a) A designation of the organisational component of the State, its name, and registered seat;
b) The name or names, surname, and personal identification number of persons authorised to
represent that organisational unit of the State;
c) The identification information of the foreign contractual partner;
d) The subject of the agreement;
e) The basic conditions for the conclusion of a trading transaction in military material;
f) The term for which trade in military material is to be permitted.
(3) Changes in the information set out in paragraph (2) shall be subject to approval by the
Government.
Sec. 13
Cessation of the Permit
(1) A permit shall cease to exist:
a) If a legal entity is deleted from the Commercial Registry or another registry;
b) With a decision declaring the bankruptcy of the legal entity;
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c) With the expiration of the term of the permit;
d) With the decision of the Ministry to abolish the permit, if:
1. The permit was granted on the basis of incorrect or incomplete information;
2. The legal entity no longer complies with the requirements for the granting of the permit;
3. The foreign-policy, trade, and security interests of the Czech Republic so require;
4. The holder of the permit has seriously breached the provisions of this Act or a legal regulation
of the European Union, legal regulation of a European Union country, or an announced
international treaty by which the Czech Republic is bound, provided that they regulate the trading
in or the handling of military material;
e) With the announcement of the legal entity that it has ceased to engage in the permitted activity;
f) In the cases described in Sec. 12a, by a decision of the Government.
(2) A permit shall not be transferrable; should the legal entity cease to exist, it shall not
transfer to its successor.
PART THREE
Conditions for the Granting of a Licence and for its Use
Sec. 14
Licence
(1) A legal entity for which a permit was issued under this Act shall be entitled to carry
out a particular trade in military material only on the basis of a licence and to the extent and
subject to the conditions set in the licence.
(2) A legal entity shall request the granting of a licence for every agreement the subject of
which is trade in military material under Sec. 2 (1) or (2); trade in military material under Sec. 2
(3) may be carried out even without a licence.
(3) In the event of trade in military material where the foreign contractual partners have
their registered seat in a particular European Union Member State, which is set out in the
application, a licence may be requested solely for that state, although the end users have their
registered seat in, and the military material will be finally used in, any other European Union
Member State. A list of the military material that may constitute the subject of that licence shall
be set by an implementation regulation.
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(4) The Ministry of Defence or the Ministry of the Interior, which are entitled to engage in
trade in military material, shall apply for a licence on the basis of, to the extent of, and subject to,
the conditions stipulated in the decision of the Government under Sec. 12a, and shall comply
with the obligations of legal entities under Sec. 15 through 22, with the exception of Sec. 15 (3)
(d) and Sec. 16 (3) (b). The Ministry shall grant these licences to the extent set out by the
Government decision under Sec. 12a (2).
Application for a Licence
Sec. 15
(1) An application for a licence shall be submitted to the Ministry by a legal entity that
has received a permit to engage in trade in military material (hereinafter referred to as the
“applicant”).
(2) An application for a licence under Sec. 14 (2) shall be submitted following a written
expression of the will of a foreign contractual partner, made for the purpose of concluding an
agreement concerning trading in a specific kind and volume of military material. In the event of
the applicant’s involvement in an international public tender, the applicant may submit an
application for a licence after the public tender has been called, or after an invitation to present a
bid in a public tender has been extended.
(3) An application for a licence under Sec. 14 (2) shall contain:
a) The company name or name and registered seat of the applicant;
b) The identification number of the applicant;
c) The company name or name and registered seat, or name or names, surname, and place of
business of a foreign contractual partner or a domestic contractual partner;
d) The number of the permit for engaging in trade in military material;
e) Number or item or sub-item in the combined nomenclature of the customs tariff 3a);
f) The name of the military material according to a list of military material and its volume, and
for important military material under Sec. 20, also the registry or production numbers, if they
have been assigned;
g) The proposed duration of the term of the licence;
h) The name of the country:
1. From which the military material is to be imported, in the case of its import for an end user in
the Czech Republic;
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2. From which the military material is to be imported, and also the name of the country in the
territory of which is located the end user of the military material, in the case of its import to the
Czech Republic and subsequent export; or
3. In the territory of which is located the end user, in the case of the export of military material;
4. In which the military material is to be purchased, and also the name of the country in the
territory of which is located the end user of the military material, in the case that the military
material is not imported to the Czech Republic;
i) The purpose of the foreign trade in military material, stating whether this is a transaction within
the meaning of Sec. 2 (2);
j) The offer or contractual price per unit of the volume of military material in CZK and the
overall price in CZK;
k) The company name or name and registered seat, or the name or names, surname, and place of
business of the end user;
l) The geographic name and coordinates of the place where military material that is restricted by
an international treaty shall be stored in the Czech Republic before its export or after its import, if
the subject of the agreement is important military material, within the meaning of Sec. 20 (4).
(4) An application for a licence under Sec. 14 (3) shall contain:
a) The company name or name and registered seat of the applicant;
b) The identification number of the applicant;
c) The number of the permit to engage in trade in military material;
d) The number item or sub-item in the combined nomenclature of the customs tariff;
e) The name of the military material according to the list of military material;
f) The proposed duration of the term of the licence;
g) The name of the country or countries from which the military material is to be imported or to
which it is to be exported;
h) The name of the European Union Member State in which the place of the end use of the
military material is located, the company name or name and registered seat, or name or names,
surname, and place of business of the end user in a European Union Member State.
(5) The following documents shall be submitted with an application for a licence under
Sec. 14 (2):
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a) A proposal for the conclusion of an agreement or an already concluded agreement; these
documents must contain a precise specification of the military material, including its amount;
b) A document concerning the end use;
c) Other information identifying the military material, if that is required for the due assessment of
the application.
(6) A document concerning the end use, under paragraph (5) (b), shall not be more than
12 months old and shall specify:
a) The name of the country in which the place of the end use of the military material is located;
b) The name of the authority that issued it;
c) The company name or name and registered seat of the applicant;
d) The company name or name and registered seat, or the name or names, surname, and place of
business of the end user;
e) A precise description of the military material, namely its amount, characteristic, and value;
f) The date of issue;
g) An anti-re-export clause;
h) The name or names, surname, and stamp and signature of the authorised representative of the
authority that issued the document;
i) Information about the end use of the military material.
(7) Samples of the applications for a licence shall be provided by an implementation
regulation.
Sec. 16
(1) The Ministry shall render a decision concerning an application for a licence within 60
days of the day of its delivery, on the basis of the binding positions of:
a) The Ministry of Foreign Affairs, as concerns the foreign-policy interest of the Czech Republic,
and adherence to the international obligations of the Czech Republic, namely those that arise for
the Czech Republic from international treaties by which the Czech Republic is bound and from
the membership of the Czech Republic in international organisations;
b) The Ministry of the Interior, as concerns public order, security, and the protection of the
population;
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c) The Ministry of Defence, as concerns ensuring the defence of the Czech Republic, if important
military material under Sec. 20 is concerned.
(2) A binding position under paragraph (1) shall be issued by the authority concerned
within 20 days of the delivery of a counterpart of an application; in especially complex cases and
on the basis of a written agreement of the ministries, this period may be reasonably extended.
The binding position shall contain the consent or refusal of the authority concerned. The binding
position of the Ministry of Foreign Affairs under paragraph (1) (a) shall not be required if an
application for a licence has been filed under Sec. 14 (3).
(3) A decision to grant a licence under Sec. 14 (2) shall contain:
a) The company name or name, registered seat, and identification number of the applicant;
b) The number of the permit to engage in trade in military material
c) The number or the item or sub-item in the combined nomenclature of the customs tariff;
d) The name of the military material and its amount;
e) The total price of the military material in CZK;
f) The company name or name and registered seat, or the name or names, surname, and place of
business of the foreign contractual partner and end user of the military material;
g) The term of the validity of the licence;
h) Any other conditions tied to the licence.
(4) A decision to grant a licence under Sec. 14 (3) shall contain:
a) The company name or name, registered seat and identification number of the applicant;
b) The number of the permit to engage in trade in military material;
c) The name of the military material;
d) The date and place of the issuance of the licence and the term of its validity;
e) Any other conditions tied to the licence.
(5) Space shall be set out in the decision for records of customs authorities concerning the
use of the licence.
Sec. 17
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(1) The legal entity to which the licence has been granted shall inform the Ministry about
the use of the licence by the tenth day of the month following the completion of the first and
second calendar half years. The information shall be provided to the extent stipulated by the
implementation regulation. The correctness and completeness of the information concerning the
use of the licence shall be confirmed by the signature of the person who is authorised to represent
the legal entity.
(2) The legal entity to which the licence has been granted shall return the original of the
decision to grant a licence that will not be used, or on the basis of which the purpose for which it
was granted has been fulfilled, or the term of which has expired, to the Ministry within 15 days.
(3) The legal entity to which the licence has been granted shall inform the Ministry in
writing within 15 days of having learned of any facts that prevent it from making use of the
licence granted.
The Non-Granting and Withdrawal of a Licence
Sec. 18
The Ministry shall not grant a licence if:
a) The applicant has failed to comply with the requirements set out in Sec. 15; or
b) The applicant has seriously breached the provisions of this Act or a legal regulation of the
European Union, legal regulation of a European Union country, or an announced international
treaty by which the Czech Republic is bound, provided that they regulate the trading in or
handling of military material; or
c) It is supported by foreign-policy reasons or the trade interests of the Czech Republic, or for the
protection of public order, security, and protection of the population.
Sec. 19
(1) The Ministry shall withdraw a licence it has granted if the trade in military material
has not been implemented or has not been fully completed and:
a) The licence had been granted on the basis of false or incomplete information; or
b) It is supported by foreign-policy reasons or the trade interests of the Czech Republic, or for the
protection of public order, security, and protection of the population; or
c) The conditions set out in the licence have not been met; or
d) The permit under Sec. 13 of this Act has ceased to exist.
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(2) In the cases listed in paragraph 1, the State shall not be liable with respect to the legal
entity to which the licence has been granted, for any damage caused to it by the withdrawal of the
licence.
Sec. 20
Important Military Material
(1) For military material that is important in terms of the efficiency of its use in combat,
or in terms of its volume (hereinafter referred to as “important military material”), the applicant
may, before the submission of an application for a licence, submit an application for preliminary
consent for its negotiations with its foreign partner.
(2) In its application for preliminary consent, it shall state the expected information
required by Sec. 15 (2).
(3) The Ministry shall render a decision concerning the application, following prior
discussion with the Ministry of Foreign Affairs, within 30 days of the request. The preliminary
consent granted may be changed if a change in the conditions under which it was issued has
occurred. The preliminary consent shall not stand in the place of a licence.
(4) The designation of important military material under paragraph (1) shall be made in an
implementation regulation.
Sec. 21
A legal entity to which has been granted a licence that allows for the export or import of
military material from or to the Czech Republic (hereinafter referred to as a “licence holder”)
shall, in the case of trade in military material where the foreign contractual partner or end user
does not have its seat in a European Union Member State, undergo proceedings on the
assignment of a customs-approved designation 3b) and present the original of the licence to the
customs authority having local jurisdiction with its seat in the Czech Republic.
Sec. 22
A declaration about the end use of the military material imported to the Czech Republic
shall be issued to foreign entities by the Ministry.
PART FOUR
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Oversight over the Conduct of Trade in Military Material
Sec. 23
(1) The Ministry shall oversee adherence to this Act by the legal entities to which a permit
for trading in military material has been issued, and by legal entities and natural persons who can
be reasonably assumed to engage in trade in military material, and by the Ministry of Defence
and the Ministry of the Interior, which engage in trade in military material under Sec. 12a
(hereinafter referred to as an “entity”). The Ministry shall make a protocol of control findings
with respect to the oversight thus conducted.
(2) The entities overseen in accordance with paragraph (1) shall make available to the
employees authorised by the Ministry to carry out the oversight any and all documents relating to
the oversight, and allow them to inspect buildings and goods, to the extent set out by the Ministry
in advance; the integrity of homes shall be guaranteed. Entities to which a permit for trading in
military material has been issued are obliged to inform the Ministry in writing, within the period
stipulated by the Ministry, of any information required by Ministry concerning trade in military
material, in particular to report the use of a granted licence.
(3) The entities subject to oversight shall be entitled to acquaint themselves with the
contents of the protocol of control findings, receive a counterpart of that protocol, and give their
position on the contents of the protocol within the time-period appointed.
(4) The provisions of the preceding paragraphs shall not prejudice the oversight powers
stipulated by special acts. 4)
Sec. 23a
Oversight by Customs Authorities
(1) Customs authorities shall oversee whether trade in military material is only carried out
by legal entities that have been granted a permit under this Act, and whether it is carried out to
the extent and subject to the conditions set out in the relevant licences.
(2) In carrying out its oversight under paragraph (1), the customs authority may ask a
licence holder to present the original of the licence and to make records in the licence about
significant information concerning circumstances related to its use; records made in the licence
shall be accompanied by the date on which the record was made and information clearly
identifying the person who made the record.
(3) Should the customs authority find that trade in military material is not being carried
out in accordance with this Act or other legal regulations or the conditions set out in the related
licence, it shall inform the Ministry in writing without delay.
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(4) For ensuring oversight under paragraph (1), the Ministry shall provide to the General
Customs Directorate, to the extent necessary, information about licences granted under this Act.
The General Customs Directorate shall provide to the Ministry information that has arisen during
the activity of customs authorities that was related to the use of licences granted under this Act.
Securing Military Material
Sec. 23b
(1) A customs authority may secure military material if it can be reasonably assumed that
the military material was used or intended for committing an administrative offence or that it was
obtained through an administrative offence or in exchange for an item obtained through an
administrative offence.
(2) In securing military material under paragraph (1), the customs authority shall proceed
such as to not restrict the rights of third parties, beyond the extent necessary to fulfil the purpose
of the securing.
Sec. 23c
(1) The customs authority shall issue a decision concerning the securing of military
material. An appeal against that decision shall not have a dilatory effect.
(2) In its decision on the securing of military material, it shall state the reasons for which
the military material is being secured and shall also state that the decision on securing military
materials shall have the effects of a decision on security for the fulfilment of an obligation under
Sec. 147 (6) of the Administrative Code, unless a fine is paid.
(3) If it has reason to do so, the customs authority in issuing a decision under paragraph
(2) can state that it shall leave the military material with the person who owns or holds the
material; that person must not use the military material, transfer it to another person, or make any
other dispositions with it.
Sec. 23d
(1) The person to whom a decision about the securing of military material has been
delivered shall relinquish that military material to the customs authority, unless the customs
authority proceeds in accordance with Sec. 23c (3).
(2) If the military material is not relinquished at the request of the customs authority, the
customs authority may remove the customs material from the possession of the person who has it.
(3) An official record shall be made of the relinquishing or removing of military material,
in which a description of the military material shall be provided. The customs authority shall
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issue a confirmation of the relinquishing or taking away of the military material for the entity that
relinquished the military material or from which it was removed.
Sec. 23e
If the secured military material is no longer required for further proceedings, and its
forfeiture or confiscation are not feasible in proceedings concerning the administrative offence or
their sale or other use, it shall be returned to the person from whom it was secured.
Sec. 24
(1) The Ministry may request information from all state authorities concerning persons
engaged in trade in military material and persons requesting a permit for such trade, as well as
about their business activities, provided they are related to trade in military material. The
provision of such information shall be governed by special legal regulations 5).
(2) The Ministry shall provide, without undue delay:
a) To the authorities concerned by this Act:
1. The information stated in an application for a permit or a licence;
2. The information stated in a final decision on the issuance or non-issuance of a permit;
3. The information stated in a final decision on the non-issuance of a licence or withdrawal of a
licence;
4. The information about the cessation of a permit, with the exception of the case listed in Sec. 13
(1) (c),
b) To the General Customs Directorate:
1. The information stated in a final decision on the issuance or non-issuance of a permit;
2. The information stated in a final decision on the non-issuance of a licence or withdrawal of a
licence;
3. The information about the cessation of a permit, with the exception of the case listed in Sec. 13
(1) (c);
c) To the Ministry of Defence, in addition to the data and information listed under (a), also
information about inspections on the trade in important military material and information about
oversight or about securing military material under Sec. 23 through 23e;
d) To the Czech Authority for The Testing of Weapons and Ammunition, information about any
licences issued in cases when the subject of foreign trade is products subject to verification under
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a special legal regulation 5a).
PART FIVE
ADMINISTRATIVE OFFENCES
[Heading deleted]
Sec. 25
Administrative Offences of Legal Entities
(1) A legal entity has committed a legal offence by trading in military material without a
permit under Sec. 6 (1) or without a licence under Sec. 14 (1).
(2) A legal entity applying for a permit has committed an administrative offence by:
a) Stating in its application for a permit under Sec. 9 (1) incorrect or incomplete information that
is required for the issuance of the permit; or
b) Presents background documents under Sec. 9 (2) which were changed without an authorisation
or forged.
(3) A legal entity to which a permit has been issued has committed an administrative
offence by:
a) Failing to inform the Ministry of a change under Sec. 10 (2) or failing to document that
change; or
b) Changing information in the permit.
(4) A legal entity to which a permit has been issued and which is applying for a licence
has committed an administrative offence by:
a) Stating in its application for a licence under Sec. 15 (3) or (4) incorrect or incomplete
information that is required for the granting of a licence; or
b) Presents background documents under Sec. 15 (5) that were changed without an authorisation
or forged.
(5) A legal entity to which a licence has been granted has committed an administrative
offence by:
a) Failing to meet the obligation to inform about the use of a licence under Sec. 17 (1);
b) Changing the information in the licence, including the records of customs authorities; or
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c) Failing to meet the obligation to return the original of the licence under Sec. 17 (2) or the
obligation to inform under Sec. 17 (3).
(6) The following fines shall be imposed for administrative offences:
a) Of up to CZK 50,000,000 in the event of an administrative offence under paragraph (1);
b) Of up to CZK 15,000,000 in the event of an administrative offence under paragraph (5) (a) or
(b);
c) Of up to CZK 5,000,000 in the event of an administrative offence under paragraphs (2), (3), or
(4) or under paragraph 5 (c).
Sec. 26
Forfeiture of Military Material
(1) The forfeiture of military material may be imposed separately or in conjunction with a
fine if the military material belongs to a legal entity that has committed an administrative offence
and the military material was:
a) Used or intended for the commitment of the administrative offence; or
b) Obtained through an administrative offence or obtained in exchange for an item obtained
through an administrative offence.
(2) Forfeiture of military material cannot be imposed if its value is disproportionate to the
nature of the administrative offence.
(3) The State shall become the owner of forfeited military material.
Sec. 27
Confiscation of Military Material
(1) If the forfeiture of military material under Sec. 26 has not been imposed for an
administrative offence, a decision may be made to confiscate such military material if:
a) It belongs to a legal entity that cannot be punished for an administrative offence; or
b) If it does not belong to the legal entity that committed the administrative offence or does not
belong to it fully;
and if it is required by the safety of persons or property or another general interest.
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(2) A decision to confiscate military material may not be made if its value is
disproportionate to the nature of the administrative offence, or if 6 years have passed since the
conduct that manifests signs of an administrative offence.
(3) The State shall become the owner of confiscated military material.
Sec. 27a
Common Provisions
(1) A legal entity shall not be liable for an administrative offence if it proves that it has
exerted all reasonable efforts to prevent the breach of the legal obligation.
(2) In determining the penalty for a legal entity, the seriousness of the administrative
offence shall be taken into account, in particular the manner in which it was committed, and its
consequences and the circumstances under which it was committed.
(3) The liability of a legal entity for an administrative offence shall cease to exist if the
administrative authority has failed to commence proceedings with respect to it within 4 years
from the day on which it learned of it, but no later than 10 years from the day on which it was
committed.
(4) In the first instance, administrative offences under Sec. 25 (1) to (4) and under Sec. 25
(5) (a) and (c) shall be reviewed by the Ministry; and administrative offences under Sec. 25 (5)
(b) shall be reviewed by the customs authority in the first instance.
(5) Fines shall be collected by the authority that imposed them. The income from fines
shall constitute income of the national budget.
PART SIX
Supplementation of Act No. 455/1991 Coll., on Trade-Licensed Business (Trade Licensing Act),
as amended
Sec. 28
In Sec. 3 (2) of Act No. 455/1991 Coll., on Trade-Licensed Business (Trade Licensing
Act), as amended by Act No. 231/1992 Coll., of Act No. 591/1992 Coll., of Act No. 600/1992
Coll., and of Act No. 273/1993 Coll., paragraph (m) shall be supplemented, with the following
wording: "(m) Foreign trade in military material.".
PART SEVEN
[Abolished]
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Sec. 29
[Deleted]
PART EIGHT
Common, Interim, and Concluding Provisions
Sec. 30
If the positions of the authorities concerned, under Sec. 6 and 16, and the information
provided on the basis of Sec. 24, contain confidential information 2a), the parts of the file
containing such information shall be kept separately from the file.
Sec. 30a
(1) In judicial proceedings conducted on the basis of an action challenging a decision
issued under this Act, evidence shall be reviewed such as to respect the obligation to keep
confidential any confidential information contained in the positions of the authorities concerned,
provided under Sec. 6 and 16, as well as the information provided on the basis of Sec. 24.
Evidence in the form of witness testimony may only be obtained with respect to these facts if the
person bound by the obligation of confidentiality has been released from that obligation by the
relevant authority; a release from the obligation of confidentiality shall not be possible in cases
when the activities of intelligence services or the Police of the Czech Republic may be
compromised or seriously disrupted; this provision shall be applied similarly in cases when
evidence is being obtained by means other than witness testimony.
(2) The authority that provided the information shall mark the facts listed in paragraph
(1), about which it claims that a release from confidentiality is impossible with regard to them,
and the chairman of the judicial panel shall rule that the parts of the file to which these facts
relate shall be kept separate, for otherwise the activities of intelligence services or the Police of
the Czech Republic may be compromised or seriously disrupted.
Sec. 31
(1) Employees and officers in a service relationship to the state authorities listed in Sec.
24 (2) shall keep confidential any facts that have the nature of a business and service secret and
which they learned in connection with the issuance of permits, granting of licences, or overseeing
of trade in military material, even after they are no longer employed by those authorities or after
their service relationship to those service authorities has terminated. They may be released from
that obligation for serious reasons by the head of the administrative authority referred to in
sentence one, to which they are or were subordinated.
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(2) Employees and officers in a service relationship to the state authorities listed in Sec.
24 (2) who are taking part in implementing this Act, and are obliged to maintain confidentiality
under the previous paragraph, must not be employed by a legal entity entitled to engage in trade
in military material, for the three years after the termination of their employment or service
relationship.
Sec. 32
(1) Any valid official permit issued under existing legislation 6) shall be deemed to
constitute a licence under this Act.
(2) Legal entities that hold valid official permits for trading in military material as at the
effective date of this Act may continue to engage in that trade for six months after the effective
date of this Act; in that period, they shall be obliged to submit an application for a permit in
accordance with Part Two of this Act, to which the provision of Sec. 9 (3) applies, even though
the legal entity is inscribed in the Commercial Registry. Should they fail to do so, the existing
official permit for trading in military material shall cease to exist with the expiration of that timeperiod.
Sec. 33
The Ministry, upon agreement with the Ministry of Foreign Affairs, Ministry of Defence,
and Ministry of the Interior, shall issue a regulation to implement Sec. 5 (3), Sec. 9 (3), Sec. 14
(3), Sec. 15 (7), Sec. 17 (1), and Sec. 20 (4) of this Act.
Sec. 34
This Act shall take effect on 1 April 1994.
Uhde m.p.
Havel m.p.
Klaus m.p.
Selected provisions of amendments
Art.XXIV of Act No. 413/2005 Coll.
Interim Provisions
Legal entities holding permits for foreign trade in military material that have established a
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supervisory board shall present to the Ministry documents under Sec. 7 (1) (b) for each member
of the supervisory board, within 8 months of the effective date of Act No. 412/2005 Coll., on the
Protection of Confidential Information and on Security Competence.
Art. II of Act No. 220/2009 Coll.
Interim Provisions
Proceedings concerning the issuance of a permit or the granting of a licence commenced
before the effective date of this Act shall be completed in accordance with Act No. 38/1994 Coll.,
as amended as at the effective date of this Act.
___________________
1) Sec. 21 (2) of Act No. 513/1991 Coll., the Commercial Code, as amended.
1a) Act No. 361/2003 Coll., on the Service Relations of the Members of Security Forces, as
amended.
1b) Act No. 239/2000 Coll., on the Integrated Rescue System and on Amending Certain Acts, as
amended.
1c) Act No. 111/1998 Coll., on Institutions of Higher Education and Amending and
Supplementing Other Acts (the Act on Institutions of Higher Education), as amended.
1d) E.g., Treaty on the Non-Proliferation of Nuclear Weapons, announced under No. 61/1974
Coll., Convention on the Prohibition of the Development, Production, Stockpiling, and Use of
Chemical Weapons, and on their Destruction, announced under No. 14/2009 Coll. Int. Tr., Act
No. 19/1997 Coll., on Certain Measures Connected to the Prohibition of Chemical Weapons and
on Changing and Supplementing Act No. 50/1976 Coll., on Zoning and Building Rules (the
Building Code), as amended, Act No. 455/1991 Coll., on Trade-Licensed Business (Trade
Licensing Act), as amended, and Act No. 140/1961 Coll., Criminal Code, as amended, as
amended, Convention on the Prohibition of the Development, Production and Stockpiling of
Bacteriological (Biological) and Toxin Weapons and on their Destruction, announced under No.
96/1975 Coll., Act No. 281/2002 Coll., on Certain Measures Related to the Prohibition of
Bacteriological (Biological) and Toxin Weapons and on Amending the Trade Licensing Act, as
amended.
1e) Act No. 305/1999 Coll., on the Prohibition of the Use, Stockpiling, Production, and
Transmission of Anti-personnel Mines and on Their Destruction and on Amending Act No.
140/1961 Coll., the Criminal Code, as amended, as amended by Act No. 41/2009 Coll.
1f) Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons
Which May Be Deemed to Be Excessively Injurious or to Have Indiscriminate Effects,
announced under No. 21/1999 Coll.
2) Sec. 2 (1) (a) and (b) of Act No. 451/1991 Coll., Setting Out Certain Further Prerequisites for
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the Holding of Certain Positions in State Authorities and Organisations of the Czech and Slovak
Federal Republic and the Czech Republic and the Slovak Republic.
2a) Act No. 412/2005 Coll., on the Protection of Confidential Information and on Security
Competence.
3) Sec. 4 (1) of Act No. 451/1991 Coll.
3a) Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the Tariff and Statistical
Nomenclature and on the Common Customs Tariff, as amended by Commission Regulation (EC)
No. 2031/2001 of 6 August 2001.
3b) Sec. 102 of the Customs Act
4) E.g., Act of the Czech National Council No. 13/1993 Coll., the Customs Act.
5) E.g., Act No. 153/1994 Coll., on the Intelligence Services of the Czech Republic, as amended.
5a) Act No. 156/2000 Coll., on the Verification of Firearms, Ammunition and Pyrotechnical
Items and on amending Act No. 288/1995 Coll., on Firearms and Ammunition (the Firearms
Act), as amended by Act No. 13/1998 Coll., and Act No. 368/1992 Coll., on Administrative Fees,
as amended, as amended.
6) Regulation of the Federal Ministry of Foreign Trade No. 560/1991 Coll., on the Conditions for
Issuing Official Permits for the Import and Export of Goods and Services, as amended.
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