National Bank Enhances Operational Risk Management to Combat Money Laundering and Financing Terrorism
Skopje, Republic of North Macedonia - In its efforts to strengthen its operational risk management framework, the National Bank has introduced several key measures aimed at preventing money laundering and financing terrorism.
What is Operational Risk?
According to international standards, operational risk refers to the risk of loss or gain arising from inadequate or failed internal processes, people, systems, or external events. In the context of banking supervision, this includes risks related to money laundering and terrorist financing.
Revised Licensing Criteria
The National Bank has revised its criteria for licensing banks, introducing a more stringent “fit and proper” test for shareholders with qualified participation in banks. The assessment now includes an evaluation of the risk that can be encountered by the person wishing to gain qualified participation in a bank regarding its stability, safety, and reputation.
Enhanced Regulatory Framework
The new Law on Banks provides for graduated measures that the governor of the National Bank can take towards a bank, including:
- Issuing recommendations
- Warnings
- Concluding protocols
- More severe penalties such as interdiction or limitation of certain activities, introduction of administration, and withdrawal of the permit for taking up and pursuit of the business
Additionally, the Law allows the governor to pronounce misdemeanour sanctions without mediation of a court, increasing the efficiency of the National Bank in addressing non-compliant banks.
AML Law Amendments
The AML (Anti-Money Laundering) Law has been amended to provide greater clarity on the requirements for banks to establish and implement programs for preventing money laundering and financing terrorism. The Decision on the Manner and Procedure for Establishment and Application of the Bank’s Program for Prevention of Money Laundering and Financing Terrorism provides a more detailed framework for banks to assess and mitigate risks related to money laundering and terrorist financing.
Currency Exchange Operations
The National Bank has also adopted a Decision on Currency Exchange Operations, which requires authorized currency exchange entities to possess a program for prevention of money laundering in accordance with regulations defining the prevention of money laundering and financing terrorism. Failure to comply with these requirements can result in withdrawal of the license for currency exchange operations.
Commitment to Enhancing Operational Risk Management
These measures demonstrate the National Bank’s commitment to enhancing its operational risk management framework and mitigating the risks associated with money laundering and terrorist financing. The bank is working closely with other regulatory bodies and financial institutions to ensure that the banking sector operates in a secure and transparent environment.