Financial Crime World

Compliance Requirements for Financial Institutions in San Marino Show Progress

Introduction

San Marino, a small European nation, has made significant strides in implementing anti-money laundering and combating the financing of terrorism (AML/CFT) requirements. A recent report highlights the country’s progress in aligning its legal and institutional framework with global standards.

The Challenges Faced by San Marino

Historically, the Sammarinese financial sector was characterized by features that created an environment conducive to money laundering. While domestically generated proceeds of serious crime are low in San Marino, the country is vulnerable to money laundering of foreign-sourced crime proceeds.

Progress Made by San Marino

Under pressure from international organizations such as the Financial Action Task Force (FATF), San Marino has made notable progress in implementing AML/CFT requirements. The report notes that banks and financial institutions have begun implementing these requirements, although results are mixed.

  • New Regulations: San Marino has introduced new regulations to strengthen its AML/CFT regime.
  • Implementation Challenges: However, the implementation of these new regulations has been a challenge for some banks and financial institutions.

Areas Requiring Further Improvement

The report’s authors praise San Marino for its efforts to strengthen its AML/CFT regime but highlight areas that require further improvement. These include:

  • Enhancing Customer Due Diligence: San Marino needs to enhance customer due diligence procedures to prevent money laundering.
  • Improving Reporting Mechanisms: The country should improve reporting mechanisms to facilitate the detection and investigation of suspicious transactions.

Conclusion

San Marino’s progress in implementing AML/CFT requirements is seen as an important step towards ensuring the integrity of its financial system and preventing the misuse of its banking sector for illicit activities. However, continued efforts are necessary to address the challenges faced by the country.