San Marino Faces Call for Improvement in Anti-Money Laundering Efforts

Mixed Assessment from MONEYVAL

The Council of Europe’s Anti-Money Laundering body, MONEYVAL, has delivered a mixed assessment of San Marino’s efforts to combat financial crime. While praising progress made by the country, MONEYVAL has identified areas where San Marino needs to strengthen its regulatory framework.

Progress in National Policies and Coordination

MONEYVAL welcomed San Marino’s “substantial level of effectiveness in national anti-money laundering and combating of terrorist financing policies and coordination.” The body also commended the country’s “overall framework and practical actions.”

Key Areas of Improvement

However, MONEYVAL identified several areas where San Marino needs to improve:

• Enhancing supervision: Strengthening regulatory oversight and ensuring that institutions are adequately supervised.
• Money laundering investigation and prosecution: Establishing a clear criminal justice policy on investigating and prosecuting money laundering, and promoting proactive parallel investigations.
• Financial sanctions for terrorist financing: Strengthening sanctions available to those culpable of money laundering, and addressing the country’s insufficient prison capacity.

Recommendations from MONEYVAL

MONEYVAL made several recommendations to improve San Marino’s anti-money laundering efforts:

1. Clear criminal justice policy: Establish a clear policy on investigating and prosecuting money laundering.
2. Proactive parallel investigations: Promote proactive parallel investigations to identify and prosecute financial crimes.
3. Enhance prison capacity: Address the country’s insufficient prison capacity by building more facilities or making bilateral agreements with other jurisdictions.
4. Strengthen sanctions: Strengthen sanctions available to those culpable of money laundering, noting that custodial sentences that are not served can undermine the effectiveness of anti-money laundering regimes.
5. Regular checks on business-specific risks: Emphasize the need for all private sector categories to conduct regular checks on their business-specific money laundering and terrorist financing risks.
6. Heighten understanding of controls: Heighten understanding of the private sector’s controls in relation to customer due diligence and targeted financial sanctions.

Future Steps

San Marino will now be subject to MONEYVAL’s regular follow-up reporting process, becoming one of only five member jurisdictions with this outcome so far. The assessment highlights the ongoing challenges faced by San Marino in strengthening its anti-money laundering efforts, but also acknowledges progress made in key areas.