Financial Crime World

Moldova, Republic of Fails to Meet Anti-Money Laundering Standards

A recent evaluation by the Financial Action Task Force (FATF) has found that Moldova, Republic of has fallen short in its efforts to combat money laundering and terrorist financing.

Assessment Highlights Shortcomings

The assessment, which evaluated 40 key standards related to anti-money laundering (AML), revealed significant shortcomings in Moldova’s AML regime. While the country was deemed “largely compliant” in some areas, such as assessing risk and applying a risk-based approach, and national cooperation and coordination, several other key areas fell short of FATF standards.

Partially Compliant Areas

Moldova was found to be:

  • Partially compliant with regards to:
    • Money laundering offence
    • Confiscation and provisional measures
    • Targeted financial sanctions related to terrorism and terrorist financing
    • Transparency and beneficial ownership of legal persons and arrangements

Additionally, the country’s:

  • Financial institution secrecy laws were deemed “largely compliant”
  • Customer due diligence procedures were found to be “partially compliant”

Shortcomings in Record Keeping and More

Moldova was also found to have shortcomings in its:

  • Record keeping
  • Reliance on third parties
  • Internal controls and foreign branches and subsidiaries
  • Reporting of suspicious transactions
  • Tipping-off and confidentiality
  • DNFBPs (Designated Non-Financial Businesses and Professions) customer due diligence
  • Regulation and supervision of financial institutions

Need for Improvement

The FATF evaluation highlighted the need for Moldova to improve its:

  • Powers of supervisors
  • Regulation and supervision of DNFBPs
  • Financial intelligence units
  • Responsibilities of law enforcement and investigative authorities
  • Powers of law enforcement and investigative authorities
  • Cash couriers
  • Statistics
  • Guidance and feedback
  • Sanctions
  • International instruments
  • Mutual legal assistance
  • Extradition
  • Other forms of international cooperation

Consequences of Non-Compliance

The Moldovan government has been given a deadline to address these shortcomings and bring its AML regime in line with FATF standards. Failure to do so could result in the country being placed on the FATF’s blacklist, which would have significant consequences for its financial sector and economy as a whole.

Conclusion

Moldova, Republic of has been found lacking in its efforts to combat money laundering and terrorist financing. The country must take immediate action to address these shortcomings and bring its AML regime in line with FATF standards to avoid severe consequences.