Financial Crime World

Assessment Report: Prevention of Money Laundering, Terrorist Financing, and the Financing of Proliferation of Weapons of Mass Destruction in “The Former Yugoslav Republic of Macedonia”

Introduction

This report is an assessment by MONEYVAL (the Council of Europe’s Committee of Experts on Money Laundering) of “The Former Yugoslav Republic of Macedonia” (FYROM) on its efforts to prevent money laundering, terrorist financing, and the financing of proliferation of weapons of mass destruction.

Positive Developments

  • The number of Suspicious Transaction Reports (STRs) has increased significantly.
  • Customer Due Diligence (CDD) measures have improved, but there are still deficiencies.
  • Politically Exposed Persons (PEPs) CDD measures have also improved.
  • Wire transfer transparency has improved.

Concerns

  • There are still deficiencies in the definition of a beneficial owner and verifying identity from “reliable, independent source documents, data and information”.
  • The confiscation regime is complicated and may hamper its effective application.
  • The possession and use of proceeds from crime are not fully criminalized.

Recommendations

To address these concerns, MONEYVAL recommends that:

  1. Improve CDD measures by clarifying the definition of a beneficial owner and verifying identity from reliable sources.
  2. Enhance PEP CDD measures to include establishing the source of wealth of customers who are PEPs.
  3. Simplify the confiscation regime to improve its effectiveness.
  4. Fully criminalize the possession and use of proceeds from crime.

Supervision

  • Supervisory responsibilities for AML/CFT compliance monitoring are divided between the Financial Intelligence Office (FIO) and prudential supervisors of financial institutions.
  • The supervisory system is well-constructed, but there are still deficiencies in applying fit and proper criteria and effectiveness issues.

Cooperation

“The Former Yugoslav Republic of Macedonia” actively cooperates with other jurisdictions at all levels. However, the application of dual criminality in the Criminal Procedure Code may negatively impact MLA due to shortcomings in FT criminalisation.

Overall Assessment

MONEYVAL concludes that while there have been positive developments in “The Former Yugoslav Republic of Macedonia’s” efforts to prevent money laundering and terrorist financing, there are still concerns that need to be addressed. The country needs to improve its CDD measures, confiscation regime, and supervision to ensure effective implementation of AML/CFT laws.