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Laundered Property: San Marino’s Fight Against Money Laundering and Terrorist Financing

A recent report by the Financial Action Task Force (FATF) has highlighted San Marino’s efforts to combat money laundering (ML) and terrorist financing (TF). The report, which assessed the country’s implementation of anti-money laundering (AML) and countering the financing of terrorism (CFT) measures, noted several areas of strength and weakness.

Money Laundering

San Marino’s legal framework enables effective investigation and prosecution of ML. The country has a robust system for reporting suspicious transactions and freezing assets suspected to be related to ML. However, the report identified some weaknesses in the implementation of these measures.

While banks and other financial institutions (FIs) have robust systems for screening clients against UN designations and detecting funds, they may not always be able to analyze and independently decide on cases of partial matches.
Some private sector participants may not always be able to identify designated clients or conduct enhanced customer due diligence.

Terrorist Financing

San Marino has recently amended its national legislation to combat TF in line with FATF recommendations. The country has established a Committee for Restrictive Measures (CRM) to act as the national coordinating and policy-making body in this field.

Banks and FIs use robust systems to screen their clients against UN designations and detect funds.
However, some DNFBPs may not always be able to identify designated clients or conduct enhanced customer due diligence.

Non-Profit Organizations

A dedicated survey on non-profit organizations (NPOs) was conducted by the Financial Intelligence Authority (FIA) together with the Office for Combating Money Laundering and Terrorist Financing (OCA). The report noted that while NPOs are considered to be at low risk of TF abuse, some may still be vulnerable.

San Marino has implemented a risk-based approach towards these NPOs.

Proliferation Finance

San Marino applies freezing measures to persons designated by the UN pursuant to UNSCRs 1718 and 1737. The report noted that while some private sector participants are aware of the need to have measures in place to freeze assets without delay as part of the implementation of proliferation finance (PF) TFS, others may not always be able to identify designated clients or conduct enhanced customer due diligence.

Conclusion

While San Marino has made significant progress in implementing AML and CFT measures, there are still areas that require improvement. The country must continue to strengthen its systems for identifying and freezing assets suspected of being related to ML and TF, as well as improve the understanding of freezing obligations among DNFBPs.

With continued efforts, San Marino can ensure that it remains a leader in combating money laundering and terrorist financing.