Financial Crime World

Macedonia Makes Progress in Fighting Money Laundering, but Gaps Remain

Skopje, Macedonia

International authorities have commended the country’s efforts to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) regime during their latest assessment visit to “the former Yugoslav Republic of Macedonia”. However, significant gaps remain, particularly in the areas of third-party risk management and supervisory oversight.

Progress Made

  • The AML/CFT Law requires reporting entities to maintain records for at least 10 years after the transaction is complete, which is broadly in line with international standards.
  • Significant progress has been made on wire transfer rules, with entities performing fast money transfers now required to determine the identity of clients and verify their transactions.

Areas Requiring Improvement

  • Many designated non-financial businesses and professions (DNFBPs) such as notaries, lawyers, and accountants lack awareness of beneficial ownership and Politically Exposed Persons (PEPs).
  • These entities also fail to apply a risk-based approach to customer due diligence.
  • The supervisory authorities have a limited sanctioning system in place for AML/CFT breaches. Only a few fines had been imposed in practice, which may not be sufficient to deter non-compliance.

Technical Compliance

  • Macedonia has made progress in increasing technical compliance with FATF Recommendations targeting the DNFBP sector.
  • All listed DNFBPs are now covered by the AML/CFT Law, except for internet casinos.

Assessment Highlights

  • Casinos and real estate representatives seem to cover AML/CFT requirements satisfactorily.
  • Other DNFBPs demonstrated lower awareness of beneficial ownership and PEPs.

Conclusion

While Macedonia has made progress in strengthening its AML/CFT regime, significant gaps remain, particularly in the areas of third-party risk management and supervisory oversight. The authorities must continue to work towards addressing these challenges to ensure that the country’s financial sector is effective in preventing money laundering and terrorist financing.