Title: San Marino’s Anti-Money Laundering Laws under Scrutiny: A Look at the 1st Enhanced Follow-up Report and Technical Compliance Re-Rating
Background
San Marino, a microstate located in Europe, was recently evaluated by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) in its 1st Enhanced Follow-up Report and Technical Compliance Re-Rating. This report assesses the progress made by San Marino in improving technical compliance with the Financial Action Task Force (FATF) Recommendations.
Classification and Progress
San Marino, which was previously classified as having regular follow-up after the mutual evaluation report was adopted in April 2021, has made strides to address the technical compliance deficiencies identified in the report. The assessment for the re-rating was conducted by a team consisting of Bulgaria and the MONEYVAL Secretariat.
Progress Towards Improved Technical Compliance
The report summarizes the progress towards addressing the technical compliance deficiencies:
- San Marino has demonstrated progress, particularly in achieving a re-rating for R.35, which concerns sanctions.
Improvements Made Since Mutual Evaluation Report
The following improvements have been made since the mutual evaluation report:
- Increased penalties for financial institutions
- Enhanced transparency requirements
- Better risk assessment procedures
- Improved customer due diligence measures
Technical Compliance with Re-Ratings
The report outlines the current technical compliance with the FATF Recommendations and their re-ratings as of May 2024:
| Recommendation | Rating |
| ------------- | ------- |
| R.1 | LC |
| R.2 | LC |
| R.3 | LC |
| R.4 | LC |
| R.5 | LC |
| R.6 | LC |
| R.7 | LC |
| R.8 | C |
| R.9 | LC |
| R.10 | LC |
| R.11 | C |
| R.12 | C |
| R.13 | C |
| R.14 | C |
| R.15 | PC |
| R.16 | C |
| R.17 | C |
| R.18 | C |
| R.19 | C |
| R.20 | C |
| R.21 | LC |
| R.22 | LC |
| R.23 | LC |
| R.24 | PC |
| R.25 | PC |
| R.26 | PC |
| R.27 | LC |
| R.28 | PC |
| R.29 | C |
| R.30 | C |
| R.31 | C |
| R.32 | C |
| R.33 | C |
| R.34 | C |
| R.35 | LC (FUR1 2024) |
| R.36 | LC |
| R.37 | C |
| R.38 | C |
| R.39 | C |
| R.40 | LC |
Implications for Moving Forward
Although progress has been made, San Marino still has work to do in addressing certain technical compliance deficiencies. The following recommendations remain rated as partially compliant: R.24, R.26, and R.28. San Marino is expected to report back to MONEYVAL on its efforts to strengthen its implementation of anti-money laundering and counter-terrorist financing measures in four years’ time.
Conclusion
The 1st Enhanced Follow-up Report and Technical Compliance Re-Rating demonstrate the strides made by San Marino in addressing technical compliance deficiencies. The country’s commitment to strengthening its regulatory framework and cooperating with international organizations will be crucial as it continues its efforts to effectively meet FATF Recommendations.