Financial Crime World

Moldova’s Progress in Anti-Money Laundering and Counter-Terrorist Financing

Overview

Moldova has made some progress in implementing anti-money laundering and counter-terrorist financing (AML/CFT) measures, but there are still significant challenges and areas for improvement. This article highlights the strengths and weaknesses of Moldova’s AML/CFT framework and provides recommendations for further improvement.

Strengths

  • Good understanding of money laundering risks: The Financial Intelligence Unit (FIU) has a good understanding of money laundering (ML) risks for most sectors.
  • Improved governance by banking entities and non-banking financial institutions: Supervisory actions have led to better governance by banking entities and non-banking financial institutions.
  • Prevention of misuse of legal entities: The country has taken steps to prevent the misuse of legal entities, particularly in the context of VAT fraud.

Weaknesses

  • Gaps in supervisory framework for DNFBPs: There are gaps in the supervisory framework for designated non-financial businesses and professions (DNFBPs), such as notaries, lawyers, casinos, and dealers in precious metals and stones.
  • Capacity issues with beneficial ownership registry: The National Bank of Moldova (NBM) lacks the capacity to verify the accuracy of data recorded in its beneficial ownership registry.
  • Insufficient understanding of trusts and similar arrangements: There is an insufficient understanding among authorities and banks regarding the nature of trusts and similar arrangements.

Recommendations

  1. Prioritize business-specific ML/FT threats and vulnerabilities: Reporting entities (REs) should prioritize the assessment of business-specific ML/FT threats and vulnerabilities.
  2. Implement a new suspicion-based transaction reporting system: A new suspicion-based transaction reporting system should be implemented, and REs’ internal processes for identifying and reporting ML/FT suspicions should be tested.
  3. Increase ML cases relying on inferences from available evidence: Courts should be challenged with more ML cases relying on inferences from available evidence.
  4. Provide LEAs with sufficient resources and capacities: Law enforcement agencies (LEAs) should be provided with sufficient resources and capacities to make effective use of financial intelligence.
  5. Consistently employ the legislative framework for confiscation: The legislative framework should be consistently employed to raise the effectiveness of confiscation of proceeds.

Conclusion

Moldova needs to continue improving its AML/CFT framework, enhancing supervisory powers, and increasing awareness among stakeholders about ML/FT risks. By addressing these challenges, Moldova can strengthen its efforts to prevent money laundering and counter-terrorist financing.