Financial Crime World

Anti-Money Laundering and Counter-Terrorist Financing Measures in Moldova

Overview

The Republic of Moldova has made significant strides in combating money laundering (ML) and terrorist financing (TF), but there are still areas that require improvement. This report highlights the strengths and weaknesses of Moldova’s efforts to combat ML/TF, along with recommendations for enhancing its effectiveness.

Strengths

  • Supervisory Understanding: Financial Institutions (FIs) supervisors have a good grasp of ML risks, particularly in the banking sector.
  • Improved Governance: Supervisory actions have led to better governance among banks and some non-banking FIs.
  • Legislative Framework: The legal framework for international cooperation is well-developed.

Weaknesses

  • Limited Understanding of ML/FT Risks Related to Legal Entities (LEs): The National Regulatory Authority (NRA) does not provide a comprehensive analysis of ML/FT risks related to LEs.
  • Gaps in Supervisory Framework: Supervision of the degree of compliance with AML/CFT obligations for Designated Non-Financial Business and Professions (DNFBPs) is limited.
  • Inadequate Capacity to Track Down Fictitious Entities: The Public Service Agency (PSA) lacks sufficient resources to keep information on LEs accurate and up-to-date.
  • Insufficient Understanding of Trusts and Similar Arrangements: There is a lack of understanding among authorities and banks regarding the nature of trusts and similar arrangements.

Recommendations

  1. Assess Business-Specific ML/FT Threats and Vulnerabilities: Ensure that Reporting Entities (REs) prioritize assessing their business-specific ML/TF threats and vulnerabilities.
  2. Implement a New Suspicion-Based Transaction Reporting System: Implement the new suspicion-based transaction reporting system as a priority.
  3. Increase Court Cases Involving ML: Challenge courts with more ML cases relying on inferences from available evidence.
  4. Enhance Law Enforcement Capabilities: Provide LEAs with sufficient resources and capacities to make effective use of financial intelligence.
  5. Raise Effectiveness of Confiscation of Proceeds: Consistently employ the legislative framework to increase the effectiveness of confiscation of proceeds.

These recommendations aim to address some of the weaknesses identified in the report, such as improving understanding and supervision of ML/TF risks, enhancing capacity to track down fictitious entities, and increasing the effectiveness of confiscation of proceeds.