Financial Crime World

New Law on Banks Grants Governor of National Bank Sweeping Powers

The newly adopted Law on Banks in Macedonia has granted significant powers to the governor of the National Bank, allowing them to take a range of measures against banks, bank groups, and authorities that violate regulations.

Key Provisions

  • The governor can issue recommendations, warnings, or conclude protocols with banks, as well as impose restrictions on certain activities or even withdraw permits for taking up and pursuing business.
  • The law also grants the governor the right to take corresponding measures in cases where 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.

Misdemeanour Sanctions

  • The new Law on Banks enables sentencing of misdemeanour to banks, responsible persons, legal entities obliged to act according to the law (shareholders with qualified participation, brokerage houses, audit companies, persons connected to the bank), and responsible persons in those legal entities.
  • All previously listed provisions of the Law on Banks are correspondingly applied in the case of savings banks and branches of foreign banks located in the Republic of Macedonia.

Prevention of Money Laundering and Financing Terrorism

  • The National Bank has adopted a Decision on the Manner and Procedure for Establishment and Application of the Bank’s Program for Prevention of Money Laundering and Financing Terrorism.
  • The decision specifies obligations of banks regarding creation of risk profiles based on all relevant information and data on clients and business relations.
  • This approach enables application of a client due diligence procedure based on the degree of risk arising from money laundering and financing terrorism.
  • Amendments to the Law amending the Law on Fast Money Transfer were adopted in May 2007, strengthening criteria for licensing providers of fast money transfer and specifying cases where the Governor can withdraw licenses.
  • The law also provides for sentencing of misdemeanour sanctions for providers of fast money transfer and responsible persons.

Currency Exchange Operations

  • A new Decision on Currency Exchange Operations has been adopted by the National Bank, defining conditions, manner, procedure, and documents needed for obtaining a license for currency exchange operations.
  • 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.
  • If the National Bank identifies that an authorized currency exchange entity does not possess such a program or possesses a program that does not contain all necessary elements, it has the right to withdraw the license. Similarly, the National Bank can revoke licenses in cases where currency exchange operations are performed contrary to regulations.