Financial Crime World

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Assessment of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Requirements in San Marino

The Financial Intelligence Authority (FIA) of San Marino has released a report assessing the implementation of AML/CFT requirements by financial institutions in the country. The report highlights several key points that are essential for understanding the progress made and areas for improvement.

Key Findings

Increase in Suspicious Transaction Reports (STRs)

  • Significant increase: The FIA has received a significant increase in STRs from reporting entities, including banks, financial and fiduciary companies, and other non-financial parties.
  • This suggests that financial institutions are actively reporting suspicious transactions to the authorities.

Legacy Customers Remain a Challenge

  • Many customers of financial institutions were accepted before the current AML/CFT requirements came into effect.
  • Their relationships may have been established in contexts with high risks of money laundering, making it challenging for financial institutions to effectively implement AML/CFT measures.

Effective Implementation Remains a Significant Challenge

  • The FIA notes that effective implementation of AML/CFT requirements by financial institutions remains a significant challenge, particularly for legacy customers.
  • This highlights the need for financial institutions to develop and implement robust AML/CFT systems that can effectively manage risk.

Importance of Customer Due Diligence (CDD)

  • The report emphasizes the importance of verification of customer identity and source of funds or income.
  • Risk-based profiling of clients and thorough ongoing monitoring of established business relations are also essential for effective implementation of CDD requirements.

Conclusion

The report highlights the progress made by San Marino in implementing AML/CFT requirements but also identifies areas for improvement, particularly with regards to legacy customers. By addressing these challenges, financial institutions can effectively implement AML/CFT measures and reduce the risk of money laundering and terrorist financing.