Moldova Approves Legislative Amendments to Enhance Know Your Customer Regulations and Digitize Financial Services
Strengthening Know Your Customer (KYC) Regulations and Combating Money Laundering and Terrorist Financing (AML/CFT)
The Parliament of the Republic of Moldova has approved legislative amendments aimed at strengthening know your customer (KYC) regulations and combating money laundering and terrorist financing (AML/CFT). The reforms, which come into effect on July 1, 2023, will enable financial institutions to conduct all operations with customers online, using remote identification methods such as electronic signature or video identification.
Improving Regulatory Framework for Customer Identification Procedures
The amendments aim to improve the regulatory framework for customer identification procedures. Currently, financial entities are restricted from using non-face-to-face methods, which hinders business relationships and transactions for Moldovan citizens abroad.
- “E-KYC (Electronic Know Your Customer) is an efficient way to verify a customer’s identity digitally, facilitating their access to financial services,” said First Deputy Governor Vladimir Munteanu. “However, as with any new technology, there are potential risks and concerns that must be addressed.”
New Provisions on Customers’ Due Diligence, Source of Wealth Determination, and Transaction Record-Keeping Measures
The reforms introduce new provisions on:
- Customers’ due diligence
- Source of wealth determination
- Transaction record-keeping measures
Additionally, enhanced due diligence measures will be applied to residents of jurisdictions under international organization monitoring.
Supervisory Authorities’ Responsibilities
Supervisory authorities have six months from the law’s publication date to adjust their subordinate normative acts and draft new ones to implement the amendments. The National Bank of Moldova has announced plans to carry out several AML/CFT actions, including:
- Implementing an IT solution for monitoring money laundering risks
- Supervising bank shareholders
The NBM will also take over supervision of the insurance and microfinance sectors from July 1, 2023.
Ensuring Compliance with AML/CFT Requirements
According to the legislation, the NBM is responsible for ensuring compliance with AML/CFT requirements by:
- Banks
- Payment service providers
- Currency exchange offices
- Insurance and microfinance institutions (soon)
The reforms are part of a broader effort to enhance financial sector transparency and combat money laundering and terrorist financing in Moldova. The USAID project “Moldova Financial Sector Transparency Activity” (FSTA) has contributed to the drafting of the amendments and will continue to support implementation efforts.