Financial Crime World

Slovakia’s Financial Institutions Scramble to Comply with Anti-Money Laundering Laws Amid EU and UN Sanctions

In an effort to combat financial crime, Slovakia’s financial institutions are under intense pressure to report unusual financial transactions (UFTs) to the country’s Financial Intelligence Unit (FIU) without delay. This move aims to prevent the legalization of proceeds from criminal activity and terrorist financing.

Background and Legislation

According to Article 17(1) of Act No. 297/2008 on the prevention of legalization of proceeds from criminal activity and terrorist financing, financial institutions are obligated to notify the FIU of any transactions that raise reasonable suspicions about the involvement of sanctioned individuals or entities.

Definitions

  • Unusual Financial Transactions (UFTs): Transactions involving persons subject to international sanctions imposed under Act No. 289/2016 or those with a connection to such individuals.
  • Sanctioned Individuals: Clients who are subject to international sanctions, including account numbers and balances.

Compliance Requirements

Banks and foreign bank branches operating in Slovakia have been instructed to provide the Financial Supervision Authority (MF SR) with a list of clients subject to international sanctions on a quarterly basis. The list includes account numbers and balances for such clients, known as sanctioned persons.

In cases where financial institutions identify their clients as sanctioned individuals, they are required to notify the MF SR within specified timeframes. This move is seen as a crucial step in ensuring compliance with EU regulations and preventing money laundering activities that could undermine Slovakia’s financial stability.

Key Takeaways

  • Financial institutions in Slovakia must report UFTs to the FIU without delay.
  • Institutions are obligated to notify the FIU of transactions involving sanctioned individuals or entities.
  • Quarterly reports on clients subject to international sanctions must be submitted to the MF SR.
  • Failure to comply with these requirements could undermine financial stability and lead to severe consequences.