Financial Crime World

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Legislation in North Macedonia

Overview

The Republic of North Macedonia has implemented legislation to combat money laundering (ML) and terrorist financing (TF). This article provides a comprehensive overview of key aspects of the AML/CFT law, including definitions, reporting entities, customer due diligence, suspicious transactions, financial intelligence, whistle-blowing, offences and penalties, internal procedures, international sanctions, anti-bribery laws, and forthcoming issues.

Definitions

  • Money Laundering (ML) and Terrorist Financing (TF): The AML/CFT law defines ML/TF as a process by which criminal proceeds are made to appear legitimate.

Reporting Entities

The following entities have been identified as having high risk of being used for ML/TF:

  • Banks
  • Financial institutions
  • Insurance companies
  • Securities dealers
  • Casinos
  • Exchange offices
  • Money transfer operators

Customer Due Diligence (CDD)

Reporting entities must perform CDD on clients, including:

  • Identifying the client
  • Verifying their identity
  • Understanding the purpose and nature of the business relationship or occasional transaction
  • Conducting ongoing monitoring
  • Reporting suspicious transactions

Suspicious Transactions

If a reporting entity suspects that a transaction is ML/TF related, it must report this to the Financial Intelligence Office (FIO) within one working day.

Financial Intelligence Office (FIO)

The FIO collects data from reporting entities on suspected ML/TF transactions and conducts investigations.

Whistle-blowing

There’s a law in place for whistle-blower protection, but it still needs substantial legal, institutional, and practical preparations to ensure effective implementation.

Offences and Penalties

The AML/CFT Law prescribes penalties for breaches related to ML/TF, including fines for individuals and reporting entities.

Internal Procedures and Training

Reporting entities must undertake procedures such as:

  • Risk assessments
  • Customer due diligence
  • Submitting data to the FIO
  • Appointing an authorized person
  • Conducting internal control
  • Ensuring professional training in preventing ML/TF

International Sanctions

The law implements international sanctions based on UN Security Council resolutions, EU legal acts, and other international organizations’ decisions.

Anti-Bribery and Corruption Laws

There’s a Law on the Prevention of Corruption and Conflict of Interests that regulates measures to prevent corruption in government, public authorizations, official duties, politics, and preventing conflict of interests.

Forthcoming Issues/Legislation

Despite alignment with EU acquis, more is needed to improve law enforcement effectiveness against money laundering and tracking record obligations.