Banks Prioritize Anti-Money Laundering Measures, But Internal Controls Lag Behind

In recent years, banks in Moldova have made significant efforts to identify and report suspicious transactions in order to comply with international anti-money laundering (AML) standards. However, internal controls beyond the banking sector remain underdeveloped.

Supervisory Pressure on Financial Institutions

According to a recent report, supervisory authorities in Moldova have been putting pressure on financial institutions to improve their AML/Counter-Terrorism Financing (CFT) compliance functions and training programs. As a result, banks have become more proactive in identifying and reporting suspicious transactions.

Improvements Made by Banks

Financial institutions are now more vigilant in monitoring customer transactions
Suspicious transactions are being reported in a timely manner
Training programs for employees are being implemented to improve AML/CFT knowledge

Gaps in the Supervisory Framework

While progress has been made, there are still gaps in the supervisory framework for certain sectors. For example:

Microfinance: There is a lack of transparency and monitoring in this sector
Other Financial Institutions: Notaries, lawyers, casinos, and dealers in precious metals and stones are subject to licensing/authorization requirements, but there are deficiencies in the supervisory framework

Challenges Ahead

To improve its AML/CFT efforts, Moldova is advised to:

Prioritize the assessment of business-specific ML/FT threats and vulnerabilities by financial institutions
Implement a new suspicion-based transaction reporting system
Challenge courts with more money laundering cases
Provide sufficient resources and capacities for law enforcement agencies to effectively use financial intelligence

Conclusion

While progress has been made in some areas, there is still much work to be done to strengthen Moldova’s AML/CFT regime and prevent the misuse of legal entities for money laundering and terrorist financing purposes.