Financial Crime World

Slovakia Struggles with Compliance Risks in Financial Services

As a member of the European Union, Slovakia has been working diligently to combat money laundering and terrorism financing. However, the country’s financial industry remains at risk due to substantial anti-money laundering (AML) procedures not being implemented effectively.

The Concerned Jurisdiction

According to the International Narcotics Control Strategy Report 2016 submitted by the US Department of State, Slovakia has been recognized as a Concerned Jurisdiction. Criminal activities such as auto theft, contraband, tax fraud, arms, and illegal drug smuggling are prevalent in eastern and southeastern Europe, with Slovakia serving as a transit and destination country for laundering money obtained from these crimes.

The Economy

Despite having no free trade zone or high seas, and lacking international sanctions against the government, Slovakia’s economy is robust, with exports accounting for approximately 92.36% of GDP. The banking sector is also strong, with a population of 5.4 million.

FATF Report

The Financial Action Task Force (FATF) conducted its most recent follow-up Mutual Evaluation Report on implementing anti-money laundering and counter-terrorist financing standards in Slovakia in 2022. According to the report, Slovakia was found to be:

  • Compliant for five of the FATF’s 40 recommendations
  • Nearly Compliant for 22 of the FATF’s 40 recommendations
  • Highly Effective for zero and Substantially Effective for one of the Effectiveness and Technical Compliance evaluations

Regulatory Institutions

Regulatory institutions in Slovakia include:

  • The Financial Intelligence Unit, which oversees compliance with the Slovak AML Act
  • The National Bank of Slovakia, the Financial Directorate of the Slovak Republic, and tax and customs offices, responsible for supervising “obliged entities” under the Slovak AML Act

Obligated Institutions

Obligated institutions under the Slovak AML Act include:

  • Banks
  • Stock exchange businesses
  • Securities warehouses
  • Management companies
  • Tax and economic consultants
  • Insurance services providers
  • Accountants
  • Post offices
  • Auditors
  • Lawyers
  • Notary officers

These institutions must report any suspicious transactions to the required authority.

Addressing Compliance Risks

To address compliance risks in financial services, Sanction Scanner offers advanced anti-money laundering solutions that empower businesses to meet AML requirements. Companies operating in Slovakia can leverage Sanction Scanner’s comprehensive suite of solutions to ensure their AML needs are met and their success is secured through robust AML measures.