Financial Crime World

New Law in Moldova: Revolutionizing the Financial Sector with Electronic Know Your Customer (eKYC) Procedures

The Parliament of the Republic of Moldova passed groundbreaking legislative amendments, enabling financial institutions to conduct online customer identification procedures. Backed by the USAID Moldova Financial Sector Transparency Activity (FSTA), this moveSignificant Step Towards Digitalizing Moldova’s Financial Sector represents a major leap in addressing the challenges faced by Moldovan citizens residing abroad.

Digitalizing the Financial Sector with eKYC

The new regulations incorporate recommendations from the MONEYVAL Committee and the EU’s 5th AML Directive, allowing for the widespread implementation of remote customer identification methods like qualified electronic signatures and photo/video identification. These methods will:

  • Facilitate online transactions
  • Save time and resources for both financial institutions and customers

Until now, local financial entities have been limited in their ability to use non-face-to-face customer identification procedures. The new eKYC regulations will make it easier for clients to:

  • Establish business relationships
  • Perform necessary transactions

Addressing Potential Risks

First Deputy Governor Vladimir Munteanu acknowledged the importance of effectively regulating electronic identification: “While electronic identification streamlines access to financial services, it’s crucial that this technology is securely utilized to ensure safe and reliable services.”

Broader Initiatives for Enhancing Transparency and Resilience

Beyond eKYC, the legislative package includes provisions for:

  • Additional customer due diligence
  • Source-of-wealth determination
  • Transaction record-keeping

The National Bank of Moldova (NBM) will oversee the implementation of these amendments, starting with the insurance and microfinance sectors on July 1, 2023. NBM has previously implemented IT solutions, such as:

  • Monitoring money laundering risks
  • Supervising shareholders [With Support from the USAID FSTA Project]

Training and Compliance

Training sessions have been arranged for employees and reporting entities to ensure understanding and compliance with the new regulations.

Strengthening Measures Against Money Laundering and Terrorist Financing

This legislation is part of a broader push to strengthen measures against money laundering and terrorist financing in Moldova. The National Bank and the USAID FSTA Project have collaborated on initiatives to:

  • Enhance the financial sector’s resilience and transparency
  • Ensure a more secure business environment for all stakeholders

With the implementation of these regulations, Moldova is set to join the ranks of other digitally advanced financial sectors, allowing its institutions to effectively serve clients both locally and abroad.