Financial Crime World

BANKS GIVE HIGHER PRIORITY TO ANTI-MONEY LAUNDERING COMPLIANCE FOLLOWING SUPERVISORY PRESSURE

In response to increased supervisory pressure, banks in Moldova have been prioritizing anti-money laundering (AML) and combating the financing of terrorism (CFT) compliance functions and training programs.

Banks Take Action

  • Prioritize AML/CFT compliance functions
  • Implement training programs for employees

However, internal controls beyond banks are much less developed. This has raised concerns among financial experts who believe that a more risk-based approach is needed to enhance supervision of financial institutions (FIs).

Supervision Challenges

  • Background checks conducted by supervisors to identify beneficial owners and shareholder structures of FIs
  • On-site controls performed, including review of application and efficiency of certain obligations under the AML/CFT Law
  • Deficiencies still exist in certain low-risk sectors such as microfinance
  • Supervision could be enhanced with a more risk-based approach in line with FATF standards

Licences Withdrawn

In related news, licences have been withdrawn from some financial institutions, although not due to AML/CFT infringements.

LACK OF UNDERSTANDING ON MONEY LAUNDERING RISKS

According to sources, the FIs’ supervisors have an adequate level of understanding of money laundering risks for the majority of sectors they supervise. However, there are concerns that this understanding is limited and may not be comprehensive.

Gaps in Supervisory Framework

  • Certain gaps exist in the supervisory framework for non-banking financial businesses and professions (DNFBPs), including:
    • Notaries
    • Lawyers
    • Casinos
    • Dealers in precious metals and stones

CALL TO ACTION

Experts have called on Moldova to take immediate action to address these concerns. Specifically, they recommend that:

  • Assess business-specific ML/FT threats and vulnerabilities: Prioritize the assessment of business-specific ML/FT threats and vulnerabilities
  • Implement new suspicion-based transaction reporting system: Implement the new suspicion-based transaction reporting system as a matter of priority
  • Provide LEAs with sufficient resources and capacities: Provide law enforcement agencies (LEAs) with sufficient resources and capacities to make effective use of financial intelligence
  • Raise effectiveness of confiscation of proceeds: Raise the effectiveness of confiscation of proceeds by consistently employing the legislative framework

By taking these steps, Moldova can strengthen its efforts to combat money laundering and terrorist financing, and ensure a safer financial environment for its citizens.