Financial Crime World

Moldova’s Golden Visa Program Raises Concerns Over Money Laundering

===========================================================

The Republic of Moldova has launched a new citizenship-by-investment program, which is expected to bring in approximately $1.3 billion in foreign investment. However, experts warn that the program may also facilitate money laundering and other financial crimes.

What’s at Stake

The Golden Visa Program allows non-EU individuals to obtain Moldovan citizenship in exchange for investing at least €1 million in the country’s economy. However, what’s raising eyebrows is that these new citizens will not be required to report their foreign bank accounts to EU authorities, a move that could potentially facilitate money laundering and tax evasion.

AML/CFT Shortcomings

Moldova has also been criticized for its anti-money laundering (AML) and combating the financing of terrorism (CFT) laws. Despite approving a new AML/CFT law in December 2017, several shortcomings remain.

  • Lack of Holistic Approach: The new law focuses solely on the private sector, without addressing corruption within state institutions. This has led to concerns that the measures may be ineffective and even exploited by corrupt officials.
  • Inadequate National Risk Assessment: Moldova’s report lacks references to major money laundering schemes, including the Russian Laundromat, and does not provide a detailed analysis of cash flows related to human trafficking and other crimes.

Recommendations

Experts have called for a more comprehensive approach to addressing money laundering and other financial crimes in Moldova. They recommend:

  • Holistic Approach: Adopting a holistic approach by addressing corruption and organized crime, as well as expanding AML/CFT measures to cover state institutions.
  • Thorough National Risk Assessment: Conducting a thorough national risk assessment to identify new patterns of money laundering schemes and develop targeted measures to mitigate the risks.

Conclusion

While Moldova’s Golden Visa Program may bring in significant foreign investment, it is crucial that the country addresses its AML/CFT shortcomings to ensure the integrity of its financial system. Otherwise, the program may become a haven for money launderers and other financial criminals.