Financial Crime World

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San Marino’s Anti-Money Laundering Regulations Under Scrutiny: A Mixed Bag

The Financial Action Task Force (FATF) has released its latest report on San Marino’s efforts to combat money laundering and terrorist financing. The report, which assesses the country’s compliance with FATF Recommendations, reveals a mixed bag of successes and shortcomings.

Compliance Status

According to the report, San Marino is largely compliant with requirements related to:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Money laundering offence (R.3)
  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Targeted financial sanctions related to proliferation (R.7)

However, San Marino is partially compliant with requirements related to:

  • Non-profit organisations (R.8)
  • Customer due diligence (R.10)
  • Record keeping (R.11)
  • Politically exposed persons (R.12)
  • Correspondent banking (R.13)
  • Money or value transfer services (R.14)
  • New technologies (R.15)
  • Wire transfers (R.16)
  • Reliance on third parties (R.17)
  • Internal controls and foreign branches and subsidiaries (R.18)
  • Higher-risk countries (R.19)
  • Reporting of suspicious transactions (R.20)
  • Tipping-off and confidentiality (R.21)
  • DNFBPs: customer due diligence (R.22)
  • DNFBPs: other measures (R.23)
  • Transparency and beneficial ownership of legal persons (R.24)
  • Transparency and beneficial ownership of legal arrangements (R.25)
  • Regulation and supervision of financial institutions (R.26)
  • Powers of supervisors (R.27)
  • Regulation and supervision of DNFBPs (R.28)
  • Financial intelligence units (R.29)
  • Responsibilities of law enforcement and investigative authorities (R.30)
  • Powers of law enforcement and investigative authorities (R.31)
  • Cash couriers (R.32)
  • Statistics (R.33)
  • Guidance and feedback (R.34)
  • Sanctions (R.35)
  • International instruments (R.36)
  • Mutual legal assistance (R.37)
  • Mutual legal assistance: freezing and confiscation (R.38)
  • Extradition (R.39)
  • Other forms of international cooperation (R.40)

Non-Compliance

San Marino has also been found to be non-compliant with requirements related to:

  • DNFBPs, including transparency and beneficial ownership of legal persons (R.24) and transparency and beneficial ownership of legal arrangements (R.25)
  • Financial intelligence units (R.29)

Recommendations for Improvement

The FATF report highlights several areas where San Marino needs to improve its anti-money laundering regulations, including:

  • Increasing transparency and accountability in its financial sector
  • Strengthening its customer due diligence procedures
  • Enhancing its cooperation with other countries

Government Response

San Marino’s government has committed to addressing these concerns and is working to implement reforms to bring its anti-money laundering regulations into line with international standards. The country’s progress will be closely monitored by the FATF, which will issue a follow-up report in the future to assess San Marino’s compliance with its recommendations.