BANKS’ PRIORITY AML/CFT ISSUES FOLLOWING SUPERVISORY PRESSURE

A recent report has highlighted concerns over suspicious transactions and anti-money laundering/counter-terrorist financing (AML/CFT) measures in Moldova. Despite efforts by banks to prioritize these issues, internal controls beyond the financial sector remain underdeveloped.

Efforts to Improve Transparency

According to the report, the National Bank of Moldova (NBM) and the National Commission for Financial Markets (NCFM) have taken steps to improve transparency among shareholders’ structures of most supervised entities. However, deficiencies persist in low-risk sectors such as microfinance.

Background checks are conducted to identify beneficial owners and shareholder structures of financial institutions (FIs)
On-site and off-site controls are performed, reviewing the application and efficiency of certain obligations under the AML/CFT Law
Supervisors have an adequate understanding of money laundering (ML) risks for most sectors they supervise

Supervision Challenges

However, supervision could be enhanced with a more risk-based approach in line with FATF standards. Some FIs have had their licenses withdrawn, although not due to AML/CFT infringements.

Supervisors rely on awareness-raising activities rather than comprehensive measures to ensure compliance with AML/CFT obligations
Gaps exist in the supervisory framework for designated non-financial businesses and professions (DNFBPs), such as notaries, lawyers, casinos, and dealers in precious metals and stones

International Cooperation

Moldova is a member of various international organizations and has concluded bilateral and multilateral agreements. However, some issues were raised regarding MLA on freezing and confiscation, and the quality and timeliness of responses to requests for international assistance.

Priority Actions

To address these concerns, priority actions are recommended:

Ensure that reporting entities prioritize assessing ML/FT threats and vulnerabilities
Implement a new suspicion-based transaction reporting system
Challenge courts with more ML cases
Provide sufficient resources to law enforcement agencies
Consistently employ the legislative framework to raise the effectiveness of confiscation of proceeds