Title: Macedonia’s Progress and Challenges in Combating Money Laundering and Terrorist Financing

Date: April 3, 2014

The Former Yugoslav Republic of Macedonia (FYROM) underwent a comprehensive evaluation by the Committee of Experts on Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). The organization adopted the 4th assessment report on FYROM during its 44th Plenary held in Strasbourg from March 31 to April 4, 2014.

Background

FYROM, a MONEYVAL member since 2002, has taken steps to address risks and strengthen its Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework since its last evaluation in 2011. During the evaluation, experts assessed the country’s progress in implementing international standards and identified challenges in various areas.

Key Findings

Risk Assessment: FYROM participated in an IMF project for a preliminary risk assessment of money laundering in 2011, but there is no specific national risk assessment available since the last evaluation. FYROM is considered a transit point for international channels for trafficking in human beings and has links to organized criminal groups, particularly in the fields of drug trafficking and human smuggling.
Money Laundering: The Financial Intelligence Office (FIO) identified various money laundering (ML) typologies in FYROM, including use of fast money transfer services, smurfed transactions, purchase of immovable and movable property, and trade-based ML techniques. Authorities have introduced measures to enhance customer due diligence (CDD) and have made significant progress in confiscating proceeds from crime.
Terrorist Financing: FYROM introduced an autonomous terrorist financing (TF) office in 2008, but deficiencies remain. These include a limited applicability of the TF offence, a lack of investigations and prosecutions for TF offences, and the absence of specific TF regulations.

Progress and Challenges

Legislation and Regulations

FYROM has taken steps to align its domestic AML legislation with international standards. Welcome developments include the removal of the value threshold from the ML offence and the explicit inclusion of the possession and use of proceeds from crime among the material elements of the offence.

Reporting and Disclosure

Reporting obligations have been brought more in line with international standards. The FIO has issued separate lists of indicators for suspicious transactions reporting applicable to various industries. The number of suspicious transaction reports has increased significantly since the last evaluation.

CDD Measures and Enhanced Due Diligence

While detailed CDD measures are in place, there are deficiencies. These include the lack of a requirement to verify the identity of customers from reliable, independent source documents, data, and information, and the absence of enhanced due diligence measures for politically exposed persons (PEPs) with regard to the beneficial owner.

FYROM cooperates with other jurisdictions at all levels and comprehensively addresses mechanisms for national and international cooperation. However, the application of dual criminality in the Criminal Procedure Code may negatively impact its ability to provide mutual legal assistance due to shortcomings in TF criminalisation.

Conclusion

FYROM has made progress in addressing money laundering and terrorist financing risks. However, deficiencies remain in certain areas, such as risk assessment, investigation and prosecution of TF offences, and the implementation of specific legal and regulatory measures to prevent criminals or their associates from holding significant interests in or operating casinos. Additional measures are needed to enhance the effectiveness of the AML/CFT framework and ensure full compliance with international standards.