Financial Crime World

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San Marino’s Anti-Money Laundering and Counter-Terrorist Financing Measures Under Scrutiny

In a recent report, San Marino has been found to have significant shortcomings in its anti-money laundering (AML) and counter-terrorist financing (CFT) measures. The Financial Action Task Force (FATF) has criticized the country’s lack of proportionate and dissuasive sanctions for violations of AML/CFT requirements.

Insufficient Sanctions

According to the report, San Marino’s Office for Control Activities has the power to impose fines on governing councils or foundations that violate their obligations. However, these penalties are deemed insufficient and lack a deterrent effect. The maximum fine imposed is:

  • EUR 1,000 to EUR 5,000 for governing councils
  • EUR 10,000 for foundations

Failure to Implement Targeted Financial Sanctions

The report also highlights the country’s failure to implement effective targeted financial sanctions (TFS) related to money laundering and terrorism financing. Criminal sanctions for circumvention of freezing measures can result in:

  • Imprisonment
  • Fines up to double the value of frozen assets or funds

Administrative sanctions, including fines ranging from EUR 10,000 to EUR 100,000, are also applied for violations of freezing, verification, and reporting obligations.

FATF Recommendations

The FATF has urged San Marino to strengthen its AML/CFT regime by implementing more effective sanctions that can serve as a deterrent to those who violate the rules. The country’s failure to comply with these requirements raises concerns about its ability to prevent and detect money laundering and terrorist financing activities.

Compliance Rating

San Marino has been rated “partially compliant” in its efforts to combat money laundering and terrorist financing, with the report identifying several deficiencies that need to be addressed. The country must take immediate action to strengthen its AML/CFT regime and implement more effective sanctions to ensure compliance with international standards.

Source: Moneyval, “1st Enhanced Follow-up Report & Technical Compliance Re-Rating - San Marino” (May 2024)