Macedonia Fights Money Laundering with Limited Success

Skopje, Macedonia - A Country Still Struggling with Anti-Money Laundering and Combating the Financing of Terrorism

Despite efforts to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime, Macedonia still faces significant challenges in preventing these crimes.

Limited Progress in Reporting Suspicious Transactions

According to a recent assessment by international experts, Macedonia’s financial institutions have made some progress in reporting suspicious transactions. However, the number of reports submitted by non-banking financial sectors remains limited.

Concerns about Effectiveness of Customer Due Diligence Procedures

The assessment found that customer due diligence (CDD) procedures are not regularly updated, and there are concerns about their effectiveness.

Insufficient Measures in Place for Savings Houses and Insurance Companies

While banks seem to have well-established AML/CFT functions, other sectors such as savings houses and insurance companies lack adequate measures in place.

Fit and Proper Requirements for Shareholders and Directors of Financial Institutions

The assessment highlighted concerns about the fit and proper requirements for shareholders and directors of financial institutions. Checks are carried out only to a limited extent in practice.

Weak Supervisory System

Macedonia’s supervisory system consists of five primary responsible authorities, but there is no clear allocation of competences and powers over specific financial institutions.

Low Fines for AML/CFT Breaches

The assessment found that fines imposed on financial institutions for AML/CFT breaches are very low. The highest fine ranges from €80,000 to €100,000 in denar counter-value.

Limited Sanctioning System

The information provided by the authorities shows a limited sanctioning system, with no data available on the number of criminal procedures initiated or convictions made.

Weaknesses in Approach to Designated Non-Financial Businesses and Professions (DNFBPs)

The assessment identified weaknesses in Macedonia’s approach to DNFBPs, such as real estate agents and lawyers. While some have made efforts to comply with AML/CFT requirements, others lack awareness of beneficial ownership and politically exposed persons (PEPs).

Low Number of Suspicious Transaction Reports from DNFBPs

The statistical data provided by the authorities showed that the number of suspicious transaction reports (STRs) received from DNFBPs remains very low. No TF-related STRs have ever been submitted.

Conclusion

The Macedonian authorities have made some progress in increasing technical compliance with FATF Recommendations targeting DNFBPs, but more needs to be done to address these weaknesses. The country’s AML/CFT regime is still plagued by limited awareness, inadequate measures, and a lack of effective supervision and enforcement.