Financial Crime World

Moldova’s Anti-Money Laundering and Counter-Terrorist Financing Measures: A Fifth Round Evaluation

The Financial Action Task Force (FATF) has published the Fifth Round Mutual Evaluation Report on the Republic of Moldova’s efforts to combat money laundering and terrorist financing. This report assesses the effectiveness of Moldova’s systems and provides recommendations for improvements.

Key Findings

  • National Risk Assessment (NRA): Moldova’s NRA has been conducted, and the resulting Action Plan is addressing major risks. However, communication of NRA results to all relevant parties and addressing FT risks more comprehensively could be improved.
  • Financial Intelligence Use: Financial intelligence is used in some ML and proceeds generating offenses investigations but their number is high. LEA cooperation is generally satisfactory.
  • Investigations and Convictions: AML cases have been investigated, and there has been a trend towards increased convictions. However, the number of investigations leading to prosecutions is limited, and deriving criminals of the proceeds of crime remains a challenge.
  • FT Risks: FT risks are considered low, and there have been two terrorism-related cases resulting in convictions without any identified FT aspects.
  • Terrorist Financing: Moldova has implemented TFS through UNSCRs, but awareness and understanding among reporting entities is lacking, and no designations or requests for assistance have been made.

Risks and General Situation

Moldova: Moldova is not a significant financial center, and its financial sector primarily consists of banking. Predicate offenses such as drug trafficking, corruption, tax evasion, and smuggling generate the majority of illicit revenues. Corruption is a significant issue and has been identified as a common concern.

Moldova has demonstrated a substantial level of effectiveness in assessing ML/FT risks, domestic coordination, FT investigation and prosecution, and engagement in international cooperation. A moderate level of effectiveness has been observed in supervision of the financial and DNFBP sector, preventive measures by FIs and DNFBPs, the prevention of misuse of legal persons and arrangements, and the collection and use of financial intelligence. However, Moldova could not demonstrate sufficient effectiveness on the application of PF-related financial sanctions.

Areas for Improvement and Recommendations

  • Enhance NRA Communication: Enhance communication of NRA results to all relevant parties.
  • Broaden the Scope of NRA: Address FT risks more comprehensively within NRA.
  • Improve Use and Analysis of STRs: Improve the use and analysis of suspicious transactions reports.
  • Increase Prosecutions: Increase the number of investigations leading to prosecutions.
  • Update BO Information: Ensure accurate and current BO information is available for competent authorities.
  • Improve AML/CFT Awareness: Improve awareness and understanding of AML/CFT among reporting entities.
  • Develop Policy Coordination: Develop coordination of policies on combating PF.