Appeal Against a Decision of the Czech National Bank

Appealing against a decision of the Czech National Bank (ČNB) is an important tool for protecting the rights of companies and individuals participating in the Czech financial market. ČNB decisions, whether they involve a refusal to issue a licence, the imposition of a fine, the revocation of a permit or other interference in business activities, may be appealed in accordance with the procedure provided for by Czech administrative law. The basis for this procedure is the Act on the ČNB and the Czech Administrative Code (správní řád), which establish the applicant’s right to review administrative acts.

The appeal must be submitted in writing directly to the ČNB, usually within 15 days of the official notification of the decision. The appeal must clearly state which decision is being appealed, provide legal and factual arguments supported by evidence, and suggest how the supervisory authority should amend or revoke the original act. Practice shows that it is advisable to attach copies of all documents confirming the applicant’s compliance with legal requirements, including financial statements, internal policies, and a description of internal control and risk management systems. After receiving the appeal, the ČNB is obliged to review the submitted materials and issue a new decision. In some cases, filing an appeal suspends the execution of the contested act, which is especially important when challenging fines or orders that could affect the company’s financial condition. If the applicant is not satisfied with the outcome of the ČNB’s review, it is possible to appeal to the administrative court, which will conduct an independent review of the legality of the regulator’s actions. To increase the chances of a successful appeal, it is recommended to conduct an internal audit in advance, collect all relevant evidence and, if necessary, engage legal experts familiar with the requirements of Czech financial regulation and administrative court proceedings. This approach allows you to build a strong legal position and minimise risks for your business. Regulated United Europe can provide practical assistance in these matters, accompanying the client at all stages of the appeal and representing their interests before the regulator and in court.

In Czech law, rozkladové řízení (appeal proceedings) is an internal mechanism for appealing administrative sanctions imposed by the Czech National Bank (ČNB) for offences in the capital market. This procedure allows entities supervised by the ČNB, including natural and legal persons operating in accordance with the Capital Market Undertakings Act, to challenge unfavourable decisions of the supervisory authority.

If the ČNB issues a decision establishing an offence on the capital market, the affected person has the right to file a rozklad – a formal appeal addressed to the ČNB’s Bank Board. In the first stage, the complaint is reviewed by a commission, which is an advisory body composed of lawyers and financial experts. The commission analyses the arguments of the parties, prepares a conclusion and refers the case to the Bank Board, which makes the final decision. This system of internal review ensures a balance between procedural fairness and the efficiency of administrative proceedings. On the one hand, it strengthens the rights of market participants by providing an opportunity for an independent assessment of the decision made by the supervisory authority. On the other hand, it preserves institutional consistency and expertise, as the review is carried out within the ČNB, without immediate recourse to the courts. Under current legislation, primarily the Act on the Czech National Bank and the Act on Capital Market Undertakings, all market participants supervised by the ČNB may appeal against decisions. These include companies providing investment services, asset managers, brokers and other professional capital market participants who are required to comply with the rules and prohibitions laid down by law. In a broader context, the ČNB’s supervision covers both preventive functions (licensing, registration, granting of consents, compliance monitoring) and repressive measures (fines, written warnings, administrative orders). The rozkladu procedure is an important part of the system for protecting the rights of market participants in the event of sanctions. It is based on the principles of the right to be heard, equal treatment of supervised entities and transparency of decision-making, which is in line with both national traditions of administrative law and the basic principles of European Union regulation. For professional capital market participants, knowledge of this procedure is crucial. If a sanction is imposed, it is necessary to promptly file a rozklad, substantiating both the factual and legal grounds for review, and to comply with the statutory requirements for the form and timing of the filing. Only active participation in the consideration of the case by the rozklad commission and the Banking Council allows one to hope for the cancellation or mitigation of the initial decision. Thus, rozkladové řízení before the ČNB is a formalised and expertly supported channel of appeal that ensures a combination of effective supervision and procedural fairness. It gives market participants a real opportunity to seek a review of unfavourable decisions and is an important part of the legal strategy for protection and compliance for all entities operating in the Czech capital market.

Appealing a decision of the Czech National Bank in court

Challenging a decision of the Czech National Bank (ČNB) is a mechanism provided for by law to protect the rights and legitimate interests of financial market participants if they consider the actions or decisions of the regulator to be unlawful or disproportionate to the objectives set. This procedure is seen as an element of ensuring proper state supervision and compliance with the principles of legal certainty. The practice of administrative proceedings in the financial sector includes clearly established procedural rules regulated by the Czech Administrative Code, specific time limits for filing a lawsuit ( ) and possible outcomes of judicial review, including the cancellation or amendment of the contested decision. Administrative proceedings in the Czech Republic are based on the provisions of Act No. 150/2002 Sb. The Code of Administrative Courts, which regulates the procedure for appealing against decisions of public authorities, including the Czech National Bank as the financial market supervisory authority. An action to declare a decision of the ČNB unlawful must be brought before the competent regional court, whose jurisdiction is determined by the location of the regulator, which in practice means the Municipal Court in Prague. Before going to court, the applicant is required to use all ordinary legal remedies provided by law, including filing a request for review or appeal to a higher authority, if such a possibility is provided for by applicable regulations. Only after a final decision has been made in the administrative procedure is it possible to initiate legal proceedings with a request to declare the ČNB’s act unlawful or to revoke it. The subject of judicial review is a comprehensive assessment of the Czech National Bank’s decision in terms of its compliance with the law and its validity. The court examines both the formal legality and the substantive correctness of the act, paying particular attention to the principle of proportionality of the measure or sanction applied. The analysis of legality involves determining whether the CNB’s decision was taken on the proper legal basis, whether the procedures provided for in the Administrative Code were followed, and whether it resulted in a violation of the applicant’s fundamental rights and legitimate interests. Such a review is comprehensive in nature and covers the entire administrative act, even if the applicant challenges only certain provisions thereof. In cases where the subject of the challenge is a sanction imposed by the Czech National Bank, such as an administrative fine, the court is entitled to assess its legality and proportionality exclusively within the framework of the arguments set out by the applicant in the statement of claim. In other words, the limits of judicial review are determined by the content of the complaint filed, and the court does not consider issues that are not directly raised by the claimant, even if they are indirectly related to the contested decision. This approach ensures a balance between the right to judicial protection and the principle of disposability of the proceedings. An action for review of a decision of the Czech National Bank must be filed within two months of the date of the decision on the last administrative appeal. This time limit is preclusive, and failure to meet it deprives the applicant of the right to judicial protection. The application must be in writing and must comply with the requirements set out in the Code of Administrative Courts. It must clearly indicate the decision being appealed, formulate the subject matter of the claim – for example, a request to revoke the act or change the amount of the penalty imposed – set out the factual circumstances and legal arguments confirming the illegality or disproportionate nature of the decision, and attach the evidence referred to by the claimant. If the statement of claim is drawn up in violation of formal requirements or contains incomplete information, the court shall invite the claimant to remedy the deficiencies within a specified period. Failure to comply with this obligation shall result in the dismissal of the claim without consideration on its merits.

The filing of a claim for review of a decision of the Czech National Bank is accompanied by the payment of a mandatory court fee in the fixed amount of CZK 3,000. If the applicant requests the suspension of the contested decision for the duration of the court proceedings, an additional fee of CZK 1,000 shall be paid. Late payment of the court fee or refusal to pay it within the time limit set by the court is grounds for dismissing the action without consideration.

The examination of a claim in an administrative court may lead to various legal consequences depending on the nature of the violations identified. If the court concludes that the decision of the Czech National Bank was made in violation of the law or in violation of procedural rules, it shall be revoked and the case shall be referred for reconsideration. In such a case, the ČNB is obliged to take into account the legal position of the court and adopt a new decision that complies with the established requirements. In situations where the subject of the appeal is exclusively a sanction, the court has the right to change its amount, mitigate the measure of influence or completely exempt the applicant from its application if it considers it necessary to comply with the principle of proportionality. In the presence of gross legal defects, such as the issuance of an act by a body that does not have the relevant competence, the court may declare such an act null and void, which entails its legal invalidity from the moment of its issuance. If no violations are found in the decision, the court will uphold it and the claim will be dismissed, which means that the ČNB’s position on the matter will be definitively confirmed. After the decision is overturned, the Czech National Bank is obliged to reconsider the case, taking into account the legal positions set out in the court’s decision. The new decision must comply with the conclusions of the judicial authority and eliminate the identified violations. Ignoring the court’s legal assessment may have legal consequences for the ČNB, including the risk of the new act being declared illegal again in a subsequent appeal. A party dissatisfied with the district court’s decision has the right to file a cassation appeal with the Czech Supreme Administrative Court. Such an appeal is only possible on a limited list of grounds provided for by law, for example, in the case of a significant violation of procedural rules or incorrect interpretation of the law, cassation appeals may only be filed through a lawyer who is authorised to represent clients in administrative courts. The effectiveness of an appeal against a decision of the Czech National Bank largely depends on the quality of the statement of claim and the legal strategy. A well-drafted document with clear requirements, legal arguments and relevant evidence significantly increases the likelihood of a positive outcome. Professional support allows you to determine the advisability of challenging the ČNB’s act, correctly formulate arguments and motions, ensure compliance with procedural deadlines and present convincing evidence. If necessary, we can assist the client at the cassation appeal stage in the Supreme Administrative Court. For companies significantly affected by the ČNB’s decision, for example, those facing large fines or licence restrictions, engaging specialists with experience in dealing with the regulator is the optimal strategy.

How Regulated United Europe lawyers can help with appeals and court proceedings against the Czech National Bank’s decision

Companies and individuals operating in the Czech financial market regularly have to interact with the Czech National Bank (ČNB), which acts as a regulator and supervisory authority. ČNB decisions can have a significant impact on business, ranging from refusal to issue a licence to imposing fines or suspending operations. In such cases, it is extremely important to act quickly and professionally to protect your rights. Regulated United Europe‘s lawyers support clients at all stages of appealing against ČNB decisions. The first stage involves a legal analysis of the decision, including verification of its compliance with the law, analysis of compliance with procedural requirements and assessment of possible violations of the principle of proportionality. This expertise allows us to determine the prospects of an appeal and prepare a defence strategy. The team then prepares a written appeal (rozklad) within the statutory time limit, which is usually 15 days from the date of notification of the decision. The appeal must contain a clear statement of the claims, legal and factual arguments, references to regulatory acts, and evidence supporting the legitimacy of the client’s position. If necessary, our lawyers help to collect and structure documents: financial reports, internal policies, descriptions of control and risk management systems, minutes of management body meetings. After filing the appeal, Regulated United Europe represents the client’s interests at the stage of consideration of the complaint by the ČNB and before the appeal commission, which issues an opinion to the ČNB Banking Council. Our team monitors compliance with the procedure, prepares responses to requests from the regulator, and submits additional explanations and evidence. If the appeal does not bring the expected result, the lawyers move on to the next stage – a judicial appeal. A lawsuit to declare the ČNB’s decision unlawful is filed with the competent administrative court, most often the Prague Municipal Court. Regulated United Europe provides full support throughout the process: from preparing the lawsuit to representing the client in court. The lawsuit includes an analysis of the violations committed by the regulator, a description of the facts, evidence, and legal arguments. Particular attention is paid to compliance with procedural deadlines: the lawsuit must be filed within two months after the final administrative decision is issued. Our team monitors the payment of court fees and, if necessary, applies for a suspension of the contested decision for the duration of the proceedings.  During the court proceedings, Regulated United Europe defends the client at all stages: it participates in hearings, prepares written explanations and evidence, and, if necessary, files an appeal with the Supreme Administrative Court of the Czech Republic. This comprehensive approach increases the chances of overturning an unlawful act, mitigating sanctions or revising the CNB’s position. For companies whose activities are significantly affected by ČNB decisions, whether they are investment companies, brokers, asset managers or crypto companies, professional support at the appeal stage is a key factor in reducing risks. Timely consultation with specialists allows you to build a strong legal position, minimise the impact on your business and preserve your licence or reputation in the market.