Financial Crime World

Moldova’s Battle Against Money Laundering and Terrorist Financing: A Progress Report

The Republic of Moldova has been making significant strides in enhancing its anti-money laundering (AML) and counter-terrorist financing (CTF) measures. In this progress report, we will discuss the key findings from the latest assessment report by the Financial Action Task Force (FATF).

Key Findings

  1. Conducting and Responding to the National Risk Assessment (NRA):

    • The NRA was conducted in 2017, which identified principal vulnerabilities and threats.
    • Authorities have taken measures to mitigate risks, particularly in addressing money laundering (ML) and predicate offenses.
    • More communication among non-financial regulators regarding NRA results is essential for financing terrorism (FT) risks.

  2. Enhancing Financial Intelligence:

    • The Service for Prevention and Fight of Money Laundering (SPCML) has a thorough analysis process for developing financial intelligence.
    • However, the high number of Suspicious Transaction Reports (STRs) received needs attention, and more techniques must be employed to dismantle ML cases.

  3. Improving the AML/CTF Framework:

    • Several strategic documents have been adopted and implemented, showing a commitment to improving the overall AML/CTF framework.
    • The provisions for confiscating assets have been revised and implemented effectively.
    • A risk-based approach to supervision is being embraced, with a focus on enhancing financial intelligence and cooperation among agencies.

  4. Asset Recovery:

    • Asset recovery efforts have improved but remain unbalanced, with a lack of a central database to help better understand their efficiency.
    • Authorities are working to manage seized/confiscated assets through the involvement of the State Tax Service (STS), the Criminal Assets Recovery Agency (CARA), and courts.

  5. Addressing Financing Terrorism Risks:

    • The Sector for Security and Intelligence (SIS) and the Prosecutor’s Office for Combating Organized Crime and Special Causes (PCCOCS) demonstrate a good understanding of FT risks and have the necessary powers to obtain financial intelligence.
    • While FT investigations have resulted in convictions, challenges persist regarding the application of targeted financial sanctions (TFS) and awareness among non-bank financial institutions and designated non-financial businesses and professions.

FATF’s Recommendations

The assessment indicates the Republic of Moldova is taking substantial steps to mitigate financial crimes. However, challenges still remain, including addressing high volumes of STRs, ensuring effective implementation of TFS, and enhancing collaboration among regulators and financial institutions to improve transparency and effectiveness. Here are some of the FATF’s recommendations for further strengthening:

  • Enhancing collaboration among different authorities to better understand FT risks.
  • Improving the implementation of TFS and raising awareness among relevant stakeholders.
  • Strengthening the institutional framework to prevent and detect ML and FT crimes more effectively.
  • Ensuring that AML/CTF measures are effectively implemented in the banking and non-banking sectors, including supervision and enforcement.
  • Developing and implementing effective financial intelligence units (FIUs) and ensuring that there is sufficient capacity within these units to effectively analyze and disseminate financial intelligence received.