Banks Prioritize Anti-Money Laundering Measures Amid Supervisory Pressure

Banks Implement Compliance Functions and Training Programs Under Supervisory Pressure

In a move to boost its anti-money laundering (AML) and counter-terrorism financing (CFT) efforts, banks in Moldova have given higher priority to these issues. As a result, they are implementing compliance functions and training programs under supervisory pressure.

Internal Controls Beyond the Banking Sector Less Developed

However, internal controls beyond the banking sector are less developed, highlighting a need for improvement. The National Bank of Moldova (NBM) and the National Commission for Financial Markets (NCFM) have taken steps to enhance transparency among supervised entities, but deficiencies persist in certain low-risk sectors, such as microfinance.

Supervisory Actions and Measures

Background checks and on-site controls are conducted by both supervisors to identify beneficial owners (BOs) and shareholder structures of financial institutions (FIs). The NBM and NCFM also review the application and efficiency of certain obligations for FIs under AML/CFT legislation. However, a more risk-based approach is needed to enhance supervision in line with FATF standards.

Supervisors’ Understanding of Money Laundering Risks

Supervisors have an adequate understanding of money laundering risks for most sectors they oversee, which represent the most material areas in Moldova. This understanding derives mainly from the National Risk Assessment and sectorial analysis. Supervisory actions have led to better governance by banking entities and some non-banking FIs, including improvements in internal risk assessments.

Designated Non-Financial Businesses and Professions (DNFBPs)

The country’s supervision framework for DNFBPs, such as notaries, lawyers, casinos, and dealers in precious metals and stones, lacks gaps. Main measures focused on awareness-raising activities regarding new AML/CFT requirements have been implemented.

Priority Actions to Enhance Moldova’s AML/CFT Efforts

To further improve Moldova’s AML/CFT efforts, the following priority actions are needed:

• Ensure that financial institutions prioritize the assessment of business-specific ML/FT threats and vulnerabilities.
• Implement a suspicion-based transaction reporting system as a matter of priority.
• Challenge courts with more ML cases, relying on inferences from available evidence.
• Provide law enforcement agencies with sufficient resources to make effective use of financial intelligence.
• Consistently employ the legislative framework to raise the effectiveness of confiscation of proceeds.

Outstanding Concerns

The authorities’ ability to track down fictitious entities and ensure the accuracy of data recorded in their BO registry are also concerns that need to be addressed.