Financial Crime World

New Eurasian Group Report: Mixed Results in Belarus’s Fight Against Financial Crimes

According to the latest mutual evaluation report by the Eurasian Group (EAG), Belarus’s anti-money laundering and countering the financing of terrorism (AML/CFT) measures have received a mixed assessment. This report reveals both progress and significant deficiencies, primarily in the areas of risk analysis, supervision, and prevention.

Key Findings

  • Belarus’s National Risk Assessment (NRA) for 2018: Insufficient Comprehensiveness

    • Critical areas, like illegal drug trafficking and private sector vulnerabilities, were inadequately addressed.

  • Understanding of Current ML/TF Threats

    • Belarusian competent authorities have a good understanding of current ML and TF threats at an appropriate interagency level.
    • Interaction on proliferation financing (PF) issues is limited.

  • Access to Financial Intelligence

    • Competent authorities have comprehensive access to financial intelligence for detection, investigation, and suppression.

  • Effectiveness of Proceeds Confiscation

    • Confiscation efforts are a priority, but the lack of adequate statistics makes assessing their effectiveness difficult.

  • Focus on Terrorism and Extremism Prevention

    • Reporting entities comply with targeted financial sanctions (TFS) obligations.
    • The understanding of TF risks in the NPO sector is inadequate.

  • Financial Institutions and DNFBPs Understanding and Application of Measures

    • Financial institutions and DNFBPs understand their ML/TF risks and take adequate measures.
    • DNFBPs have demonstrated limited application of these measures.

  • Effectiveness of Recent Legislative Changes

    • Supervisors have a good understanding of ML/TF risks in relevant sectors.
    • The overall effectiveness of recent legislative changes is uncertain.

  • Identifying and Investigating Predicate Offenses

    • Belarusian competent authorities make significant efforts to identify and investigate predicate offenses.
    • Lack of detailed statistics makes assessing the effectiveness of these measures challenging.

Recommendations

The EAG’s mutual evaluation report suggests several actions to strengthen Belarus’s AML/CFT system, including:

  1. Assessing risks and applying a risk-based approach: Conduct comprehensive analysis of ML/TF risks and vulnerabilities, focusing on legal persons, NPOs, information technology-related crimes, and drug trafficking.

  2. Improving national cooperation and coordination: Enhance interaction on PF issues and increase cooperation between law enforcement and regulatory agencies.

  3. Enhancing legislation and regulatory frameworks: Address the lack of comprehensive risk assessments for abuse of legal entities and NPOs as well as cross-border risks.

  4. Strengthening human and technical capacity: Provide adequate resources, improve skills and expertise, and increase capacity to investigate and prosecute ML/TF crimes.

  5. Enhancing financial intelligence and reporting mechanisms: Improve the quality and availability of financial intelligence and strengthen reporting mechanisms for suspicious transactions and activities.

  6. Enhancing supervisory approaches: Develop specialized criteria and apply risk-based supervision effectively.

  7. Combating proliferation financing: Implement effective measures against proliferation of weapons of mass destruction and terrorism financing.

  8. Enhancing the regulatory framework for DNFBPs: Strengthen requirements to verify affiliated persons during licensing and develop effective mechanisms to determine beneficial ownership.

  9. Enhancing international cooperation: Improve cooperation with foreign jurisdictions through mutual legal assistance, extradition, and other forms of international cooperation.

By addressing these deficiencies, Belarus can build a more robust AML/CFT framework, effectively combating money laundering, terrorist financing, and proliferation financing.