Financial Crime World

Representatives Lack Full Appreciation of Money Laundering Risks

Despite having knowledge of applicable requirements, financial institutions (FIs) and relevant bodies in San Marino may be lacking a full understanding of the risks associated with money laundering (ML). A recent report has highlighted concerns over the ability of smaller FIs and designated non-financial businesses and professions (DNFBPs) to properly identify and verify beneficial ownership information.

Understanding of Customer Due Diligence Measures

The report assesses the country’s anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, noting that most DNFBPs have a basic understanding of customer due diligence (CDD) measures. However, there are concerns over the accuracy of sources used to obtain this information.

Ongoing Checks and Preventive Measures

Furthermore, the report highlights the lack of ongoing checks on the fit and proper requirements of DNFBPs, as well as the absence of measures to prevent associates of criminals from owning or controlling these entities.

Supervision by the Financial Intelligence Agency

The Financial Intelligence Agency (FIA), which is responsible for supervising FIs and DNFBPs in San Marino, has been praised for its risk-based approach to AML/CFT supervision. However, concerns have been raised over the limited number of on-site inspections carried out by the agency, particularly for higher-risk DNFBPs.

Comprehensive Identification and Assessment of ML Risks

The report also notes that San Marino’s authorities have a good understanding of ML risks associated with legal persons and arrangements, but there is a lack of comprehensive and systematic identification and assessment of these risks.

Key Concerns

  • Smaller FIs and DNFBPs may not properly identify and verify beneficial ownership information.
  • There are concerns over the accuracy of sources used to obtain customer due diligence information.
  • Ongoing checks on the fit and proper requirements of DNFBPs are lacking.
  • Preventive measures to prevent associates of criminals from owning or controlling entities are absent.
  • The Financial Intelligence Agency has limited on-site inspections, particularly for higher-risk DNFBPs.
  • San Marino’s authorities lack a comprehensive and systematic identification and assessment of ML risks associated with legal persons and arrangements.