Financial Crime World

San Marino Makes Progress in Strengthening Measures to Combat Money Laundering and Terrorist Financing

FATF Commends San Marino’s Progress

The Financial Action Task Force (FATF) has announced that San Marino has made significant progress in addressing technical compliance deficiencies identified in its Mutual Evaluation Report (MER). This is a positive development for the country, as it demonstrates its commitment to strengthening its financial system and combating money laundering and terrorist financing.

Key Areas of Progress

San Marino has effectively implemented measures to improve its anti-money laundering (AML) and combating the financing of terrorism (CFT) systems. Specifically:

  • Recommendation 35 has been upgraded from Partially Compliant to Largely Compliant, demonstrating the country’s commitment to strengthening its financial system.
  • Customer due diligence: San Marino has improved its customer due diligence procedures, ensuring that financial institutions are able to identify and verify the identity of their customers.
  • Beneficial ownership information: The country has implemented measures to improve the collection and maintenance of beneficial ownership information, making it easier to detect and prevent money laundering.
  • Reporting suspicious transactions: San Marino has strengthened its reporting requirements for suspicious transactions, ensuring that financial institutions are able to report any potential money laundering or terrorist financing activities.

Areas for Improvement

While San Marino has made significant progress in addressing technical compliance deficiencies, the FATF notes that there are still areas for improvement. These include:

  • Risk assessment: San Marino needs to improve its risk assessment and monitoring of high-risk jurisdictions.
  • Implementation of AML/CFT measures: The country needs to ensure that all financial institutions are implementing effective AML/CFT measures.

FATF Recommendations

The FATF Recommendations provide a framework for countries to implement effective AML/CFT systems and ensure that their financial systems are not used to finance illicit activities. These recommendations include:

  • Implementing effective AML/CFT systems: Countries must put in place effective systems to prevent, detect, and prosecute money laundering and terrorist financing.
  • Reporting suspicious transactions: Financial institutions must report any suspicious transactions to the relevant authorities.
  • Monitoring high-risk jurisdictions: Countries must monitor high-risk jurisdictions and take steps to mitigate the risks associated with them.

Mutual Evaluations

The FATF conducts peer reviews of each member country on an ongoing basis to assess its implementation of the FATF Recommendations. The Mutual Evaluation Report provides an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.

High-Risk Jurisdictions

San Marino is classified as a high-risk jurisdiction, which means that it is subject to increased scrutiny and monitoring by the international community. This includes:

  • Increased oversight: San Marino will be subject to regular audits and reviews to ensure that it is implementing effective AML/CFT measures.
  • Enhanced cooperation: The country will need to cooperate closely with other countries and international organizations to mitigate the risks associated with being a high-risk jurisdiction.

Financial Inclusion and NPO Issues

San Marino has implemented measures to facilitate access to financial services for marginalized groups. These include:

  • Regulatory framework for NPOs: The country has established a regulatory framework for non-profit organizations (NPOs) to ensure that they are able to operate effectively while minimizing the risks of money laundering and terrorist financing.
  • Financial inclusion initiatives: San Marino has implemented financial inclusion initiatives to improve access to financial services for marginalized groups.

Terrorist Financing, Proliferation Financing, and Beneficial Ownership

San Marino has strengthened its measures to combat terrorist financing, proliferation financing, and beneficial ownership. These include:

  • Stricter controls on cash transactions: The country has implemented stricter controls on cash transactions to prevent the use of cash for illicit activities.
  • Improved monitoring of suspicious transactions: San Marino has improved its monitoring of suspicious transactions to detect potential money laundering or terrorist financing activities.

Corruption and Asset Recovery

San Marino has made progress in addressing corruption and asset recovery. These include:

  • Prevention mechanisms: The country has established a number of mechanisms to prevent corruption, including strict laws and regulations related to asset recovery.
  • Strengthened laws and regulations: San Marino has strengthened its laws and regulations related to asset recovery to ensure that assets are recovered effectively.

Digitalization and Virtual Assets

San Marino has implemented measures to regulate the use of cryptocurrencies and other virtual assets. These include:

  • Regulatory framework: The country has established a regulatory framework for the use of cryptocurrencies and other virtual assets.
  • Stricter controls on cash transactions: San Marino has implemented stricter controls on cash transactions related to virtual assets.

Environmental Crime

San Marino has taken steps to combat environmental crime. These include:

  • Strengthened laws and regulations: The country has strengthened its laws and regulations related to environmental offenses.
  • Enhanced enforcement: San Marino has enhanced enforcement of its environmental laws and regulations to prevent and prosecute environmental crimes.

The FATF commends San Marino for its progress in addressing technical compliance deficiencies and looks forward to continuing to work with the country to strengthen its AML/CFT system.