San Marino’s Financial Sector Representatives Lack Full Appreciation of Money Laundering Risks

A recent report by the Financial Action Task Force (FATF) has highlighted concerns that representatives from San Marino’s financial institutions and other sectors are not fully aware of the risks associated with money laundering (ML). Despite having a good understanding of applicable requirements, significant gaps in knowledge have been identified regarding identifying and verifying beneficial ownership information.

Knowledge Gaps

The report found that many smaller financial institutions and designated non-financial businesses and professions (DNFBPs) struggle to properly identify and verify beneficial ownership information. This is despite having a basic understanding of customer due diligence measures.

Smaller financial institutions and DNFBPs face challenges in identifying and verifying beneficial ownership information.
These entities have a good understanding of customer due diligence measures, but struggle with implementing them effectively.

Sector-Specific Concerns

The report also highlighted concerns about the lack of reporting suspicious transactions among some sectors. The banking sector was found to be one of the most exposed to ML risk, followed by the insurance sector and financial fiduciary company sector.

Banking sector: highest exposure to ML risk
Insurance sector: moderate exposure to ML risk
Financial fiduciary company sector: moderate exposure to ML risk

Recommendations for Improvement

The FATF has called on San Marino’s authorities to take immediate action to address these gaps and improve the country’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The recommendations include:

Enhancing customer due diligence measures
Increasing transparency and reporting requirements
Implementing stronger measures to prevent money laundering

Response from San Marino’s Financial Sector Representatives

In response to the report, San Marino’s financial sector representatives have pledged to work together to improve their understanding of ML risks and implement more effective measures to combat money laundering.

By addressing these knowledge gaps and implementing recommended improvements, San Marino can strengthen its AML/CFT regime and reduce the risk of money laundering in its financial system.