Financial Crime World

Banks Prioritize Anti-Money Laundering Efforts Amid Supervisory Pressure

Strengthening AML and CFT Measures in Moldova

In a bid to enhance its anti-money laundering (AML) and counter-terrorist financing (CFT) measures, banks in Moldova have been given higher priority to assess business-specific ML/FT threats and vulnerabilities. This move comes as supervisory authorities exert pressure on financial institutions to put in place AML/CFT compliance functions and training programs.

Assessing Business-Specific Risks

According to sources close to the matter, supervisors have been urging financial institutions to identify suspicious transactions and implement measures to prevent money laundering and terrorist financing. While internal controls within these entities are less developed, authorities acknowledge that some progress has been made in identifying suspicious transactions.

The Public Services Agency (PSA) has taken steps to prevent the misuse of legal entities (LEs), particularly in the context of uncovering value-added tax fraud. However, concerns remain regarding the ability of the PSA to keep basic information on LEs accurate and up-to-date without sanctioning power.

  • Concerns include:
    • Inaccurate and outdated information on LEs
    • Limited capacity of banks to provide BO information for LEs
  • A recently created bank account registry may improve data availability

International Cooperation

Moldova’s legal framework for international cooperation is well-developed and frequently used. Authorities actively seek assistance from foreign counterparts for money laundering and predicate offense cases.

  • Issues regarding the quality and timeliness of responses to requests for mutual legal assistance (MLA) and extradition have been raised
  • Moldova is a member of various international organizations, enhancing its capability of providing and seeking cooperation

Priority Actions

In light of these findings, authorities are urging financial institutions to:

  • Assess business-specific ML/FT threats and vulnerabilities
  • Apply customer due diligence (CDD) measures that are appropriate for the identified risks

Additionally, Moldova is urged to:

  • Implement a new suspicion-based transaction reporting system as a matter of priority
  • Ensure that internal processes aimed at identifying and reporting ML/FT suspicions are tested and supervised for effectiveness and quality

Authorities also recommend:

  • Providing law enforcement agencies with sufficient resources and capacities to make more effective use of financial intelligence
  • Consistently employing the legislative framework to raise the effectiveness of confiscation of proceeds