Financial Crime World

Moldova’s Commitment to Combat Money Laundering and Financial Crime: A Look at the Republic’s Legislation and Practices

The Republic of Moldova, a small European country, has been making significant strides in preventing and combating money laundering (ML) and terrorist financing (TF). In this article, we explore Moldova’s legal framework in these areas, focusing on the provisions addressing ML and TF offenses, identification and reporting mechanisms, and international cooperation.

Money Laundering Legislation

Article 243 of the Criminal Code: While initially introduced in September 2002, the current version of Article 243, which deals with ML, complies with international standards. It covers all designated predicate offenses, except for insider dealing. Penalties for both natural and legal persons are in line with international practices. The country has made progress since its last evaluation round, bringing its money laundering legislation more in line with the Vienna and Palermo conventions.

Financing of Terrorism

Article 279 of the Criminal Code: Addresses both domestic and international terrorism. The latest amendments address the general concept of financing terrorist organizations and individual terrorists. Moldovan criminal substantive law is observed to cover all offenses within the scope of the nine treaties listed in the Annex to the TF Convention. Provisional measures and confiscation are provided for in the newly adopted Criminal Procedure Code.

Enforcement and Cooperation

  • Centre for Combating Economic Crimes and Corruption (CCCEC): Invests cases uncovered through its own inquiries into predicate offenses.
  • Ministry of Internal Affairs and Information and Security Service (SIS): Primarily focus on TF cases.
  • Prosecutor’s Office: Directs and supervises criminal investigations carried out by law enforcement agencies, with exclusive responsibility for investigating ML cases committed by specific categories of persons.

Preventive Measures for Financial Institutions

  • Customer and Beneficial Owner Identification: Banks and non-bank financial institutions are required to effectively identify customers and beneficial owners.
  • Transaction Monitoring: Monitor transactions for ML and FT activities.
  • Reporting Suspicious Transactions: Report entities obligated to establish due diligence procedures and keep records of transactions for a minimum of five years.

Measures for Non-Financial Institutions and Other Bodies

Moldova requires all susceptible organizations to follow these measures to prevent ML and FT activities.

International Cooperation and Information Exchange

Moldova has established a National Strategy for the prevention and combating of ML/FT, which sets out the basis for coordination among all relevant authorities and creates a forum for consultation.

Ongoing Efforts

Moldova is performing a national risk assessment, with World Bank support, and is seeking additional technical assistance, training, and programs of experience exchange for law enforcement and judicial authorities.

International Agreements

Moldova is a party to various international agreements, including the European Convention on Mutual Legal Assistance in Criminal Matters, the Council of Europe Convention on Laundering, Search, Seizure, and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, and has established a Financial Intelligence Unit (FIU) and become a member of the Egmont Group.

Cross-Border Measures

  • Financial Institutions: Obligated to meaningfully identify the originator of electronic transfer of funds and maintain this information throughout the payment chain.
  • Customs Service: Required to provide the Financial Intelligence Unit (OPCML) with all relevant information on currency declarations when natural or legal persons cross the border above a threshold of €10,000.

Moldova remains committed to combatting ML and TF and continues to work towards full compliance with international standards to protect the integrity of its financial system and ensure the safety and security of its citizens.