This article is devoted to the new act of registry of contracts (Act No. 340/2015 Coll.), which became effective as of 1 July 2016.
The Act establishes in the Czech Republic a registry of contracts, an informative system of the public administration that serves as a platform for publication of contracts prescribed by law, which should contribute to public awareness and control of spending of public funds and assets.
The registry falls under the administration of the Czech Ministry of Interior Affairs and is accessible by remote access, free of charge.
All contracts in which one party is one of so called obligatory entities must be published in the registry. Contracts that are subject to publication in the registry, must be concluded in a mandatory written form.
The law provides for a comprehensive list of obligatory entities. Such entities include, inter alia: the Czech Republic, municipalities, state-funded organisations, state funds, public universities, state-owned companies, Czech Radio, Czech TV, or legal entities in which the state or municipality have a majority ownership share (directly or indirectly). The obligation to register the contract does not apply to legal entities established under foreign law that operate mainly outside the Czech Republic.
The Act also provides for a list of exemptions from the obligation to register. Information that is not required to be provided pursuant to the free access to information legislation cannot be published. Such information includes, for example: classified information, personal data or trade secrets (if not concerning public funds).
Certain contracts, for which the publishing duty is not mandatory, may be published voluntarily. This may include contracts that are to be performed mainly outside the Czech Republic or contracts with a value of CZK 50,000 without VAT or less.
Contracts are published by placing an electronic picture of the text in open and computer readable format. If the contract includes information that is not published pursuant to the free access to information legislation, such information may be made unreadable.
The publishing entity can be either of the contracting parties. The party that contractually undertakes to publish the contracts is liable for due performance of this duty.
The act imbeds a new rule under which the contracts that are to be published mandatorily will become effective only as of the date of their publication. If a contract is not published in the registry within three months from execution, it will become null and void, ex tunc. This rule, however, will become effective only as of 1 July 2017.
Closing word
Although the main aim of the new Act is to provide for public control of spending of public funds, this law should also be taken into the account by business (private) entities that enter into contractual relations with obligatory entities, as the publication duty and other duties according to this Act will also apply to them.