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New Law on Banks Grants National Bank Sweeping Powers to Regulate Banking Sector
In a significant move, the new Law on Banks has been passed, granting the Governor of the National Bank sweeping powers to regulate the banking sector. The law outlines various measures that can be taken against banks, bank groups, or bank authorities in cases where they violate regulations.
Key Provisions
- According to Article 132 of the Law, the Governor has the right to take corresponding measures if there is a violation of regulations related to preventing money laundering.
- In cases where evidence suggests that a bank is involved in money laundering or other criminal offenses, the Governor can withdraw the permit for taking up and pursuing business.
- The law introduces a new provision allowing the National Bank to pronounce misdemeanor sanctions without mediation of a court.
Extension of Provisions
The law applies these provisions equally to savings banks and branches of foreign banks operating in the Republic of Macedonia.
Strengthening AML Measures
In related news, the Council of the National Bank has adopted a decision outlining the manner and procedure for establishing and applying a bank’s program for preventing money laundering and financing terrorism. The decision aims to strengthen the efficiency of anti-money laundering (AML) measures, particularly in areas such as:
- Enhanced client due diligence
- Business relations with high-risk clients
The decision also specifies obligations related to creating a risk profile on the basis of all relevant information and data about clients and business relationships.
Amendments to Law on Fast Money Transfer
In May 2007, amendments were made to the Law on Fast Money Transfer, strengthening criteria for licensing providers of fast money transfer services. The law also specifies cases where the Governor can withdraw a license, including:
- Violations of provisions related to preventing money laundering and other crimes
New Decision on Currency Exchange Operations
A new decision on currency exchange operations was adopted in February 2009, outlining conditions, procedures, and documents required for obtaining a license. The decision requires authorized currency exchange entities to possess a program for preventing money laundering in accordance with regulations defining prevention of money laundering and financing terrorism.
Consequences of Non-Compliance
- If the National Bank identifies that an authorized entity does not possess such a program or has a program lacking essential elements, it can withdraw the license.
- Similarly, the bank can revoke a license if currency exchange operations are performed contrary to regulations.
Conclusion
The new Law on Banks is expected to increase the efficiency of the National Bank in regulating the banking sector and improving conditions within the industry.