Slovakia Fails to Impress in Anti-Money Laundering Efforts, Says MONEYVAL Report

A recent evaluation by the Council of Europe’s anti-money laundering (AML) and counter-terrorism financing (CFT) committee, MONEYVAL, has revealed that Slovakia’s efforts to combat money laundering are lacking. The report highlights several shortcomings in the country’s AML/CFT regime.

Insufficient Understanding of National Risks

According to the evaluation, Slovak authorities have only a moderate understanding of national ML and CFT risks, which include: * Organized crime * Corruption * Cybercrime

While some prosecutors demonstrate a good grasp of these risks, others rely on an incorrect national risk assessment.

Poor Use of Financial Information

The report criticizes Slovakia for its poor use of financial information to gather evidence and detect criminal assets. The outcome of money laundering investigations and prosecutions only partially reflects the country’s response to these risks, with many convictions related to simple property crimes such as car theft.

Challenges in Financial Analysis

Another major challenge is the lack of: * A central bank account register * Useful beneficial ownership information

This makes it difficult for officials to carry out financial analysis. The Financial Intelligence Unit (FIU) is knowledgeable but lacks coherent management guidance, and there are significant deficiencies in transmitting its analyses to relevant agencies.

Preventive Measures

Preventive measures are also affected by: * Lack of proceeds-oriented operative analysis * Logistical and procedural constraints * High burden of proof required for certain provisional measures

Confiscation is rarely imposed, and only a fraction of seized assets is recovered.

Terrorism Financing

The report notes that there were no convictions for terrorism financing during the assessment period, with three complex investigations still ongoing. While Slovak banks demonstrate a good understanding of ML/TF risks, some non-banking financial institutions and designated non-financial businesses and professions struggle to articulate how money laundering might occur in their institution or sector.

Private Sector Cooperation

The private sector has generally demonstrated an understanding of reporting procedures to the FIU, but the FIU itself has only recently begun improving its feedback to reporting entities. Slovakia has created a register of legal entities, entrepreneurs, and public authorities, but there are no mechanisms to verify information on actual beneficial owners at the time of registration.

MONEYVAL Follow-Up Procedure

Based on these findings, MONEYVAL is applying its enhanced follow-up procedure to Slovakia, indicating that further improvements are necessary to bring the country in line with international standards.