Financial Crime World

Macedonia Fights Money Laundering with Limited Success

Combating Money Laundering and Terrorist Financing Efforts

Skopje, Macedonia - In a bid to combat money laundering and terrorist financing, Macedonia has implemented various measures to enhance customer due diligence (CDD) and expand reporting obligations. However, despite progress made, the country’s efforts are still hampered by limited success in submitting suspicious transaction reports (STRs) from non-banking financial sectors.

Progress Made but Challenges Remain

According to a recent assessment report, Macedonia has expanded its STR reporting obligations to cover attempted transactions, and authorities have developed sets of indicators for recognizing suspicious transactions. However:

  • The number of STRs submitted by non-banking financial sectors remains limited.
  • Technical deficiencies were identified in the reporting system, but it seems to work properly in practice.

Reporting Obligations and Compliance

  • Banks and other reporting entities constantly fill out STRs, with a fair ratio of 1% to 8% of ML-related STRs, considering the size of the financial system and country risk.
  • Each reporting entity is obliged to appoint an authorized person, but there is no direct and unconditional obligation to appoint an Anti-Money Laundering (AML) compliance officer.

Fit and Proper Requirements

  • The fit and proper requirements for financial institutions (FIs) are not fully aligned with international standards.
  • Supervisory authorities in Macedonia have identified limited checks on shareholders and directors, and assessments have raised concerns that such checks are carried out only to a very limited extent.

Sanctions Against AML/CFT Breaches

  • The information provided by authorities shows a very limited sanctioning system, with fines ranging from €80,000 to €100,000 for legal entities and €5,000 to €10,000 for responsible persons.
  • Improved sanctions are needed against AML/CFT breaches.

Designated Non-Financial Businesses and Professions (DNFBPs)

  • While progress has been made in increasing technical compliance with FATF recommendations, awareness of beneficial owners and politically exposed persons (PEPs) remains low among certain DNFBPs.
  • The majority of DNFBPs do not apply a risk-based approach to customer due diligence.
  • Statistics provided by authorities show that the number of STRs received from DNFBPs remains very low, with no TF-related STRs ever submitted.

Conclusion

Overall, while Macedonia has made progress in implementing AML/CFT measures, there is still much work to be done to strengthen its efforts against money laundering and terrorist financing.