Financial Crime World

Title: Moldova’s Progress in Financial Regulation Compliance: AML/CFT Measures and Challenges

Key Findings

The Republic of Moldova, a European nation, has made progress in strengthening its Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. A recent assessment by international evaluators sheds light on the country’s progress and remaining challenges in this domain.

  • Risk Assessment

    • Moldova’s National Risk Assessment (NRA), carried out in 2017, provides a comprehensive yet moderately limited understanding of threats, vulnerabilities, and risks.
    • The subsequent Action Plan has positively impacted authorities’ responses.

  • Financial Intelligence and Law Enforcement Cooperation

    • Service for Prevention and Fight of Money Laundering (SPCML) has a fairly thorough financial intelligence analysis procedure.
    • Cooperation between domestic authorities is generally satisfactory.

  • Investigations and Prosecutions

    • The number of ML cases investigated and prosecuted fluctuated due to high-profile cases.
    • Convictions have shown an overall growth trend.
    • A spectrum of ML investigations and prosecutions are conducted.

Areas for Improvement

Asset Confiscation

  • Moldova has a robust legal framework for confiscation.
  • Seized assets are low compared to the scale of proceeds-generating crime.
  • The asset management system has been reformed, creating division of responsibilities between the State Tax Service (STS), the Criminal Assets Recovery Agency (CARA), and the court bailiffs.

Terrorist Financing and Proliferation

  • While the FT risk is perceived as low, Moldova faces potential risks from transit of foreign terrorist fighters and neighboring areas.
  • The legal framework for implementing targeted financial sanctions (TFS) undergoes improvement.
  • Greater awareness and training among reporting entities and designated non-financial businesses and professions (DNFBPs) are needed.

Supervision and Transparency

  • Improvements have been made due to supervisory measures taken by financial institutions.
  • Challenges remain for DNFBPs and microfinance and foreign exchange offices.
  • Transparency of legal persons and arrangements is still a work in progress, with concerns around complex legal structures, insufficient understanding of the nature of trusts, and accurate and up-to-date BO data.

International Cooperation

  • Moldova’s legal framework for requesting and providing international cooperation is well-developed.
  • The FIU (SPCML) cooperates effectively with counterparts.
  • The effectiveness of cooperation regarding beneficial ownership (BO) information needs improvement.

Conclusion

Moldova has made significant strides in its AML/CFT compliance efforts, but there are challenges that persist. Addressing these challenges requires ongoing efforts to enhance financial intelligence usage, improve asset confiscation, strengthen supervision, and foster international cooperation.