Financial Crime World

Here is the rewritten article in markdown format:

Slovakia Under Fire for Weak Money Laundering Laws

A scathing report has been published by the Council of Europe’s anti-money laundering body, MONEYVAL, criticizing Slovakia for its inadequate efforts to combat money laundering and terrorist financing.

Inadequate Efforts to Combat Financial Crimes

The report assesses Slovakia’s compliance with international standards on anti-money laundering (AML) and countering the financing of terrorism (CFT), painting a damning picture of the country’s effectiveness in tackling financial crimes.

Key Areas of Concern

  • Lack of Clear Understanding of National Money Laundering Risks: While Slovakia has a moderate understanding of national money laundering risks, its law enforcement agencies, supervisors, and private sector entities lack a clear grasp of the threats posed by organized crime, corruption, and cybercrime.
  • Ineffective Use of Financial Information: The country’s financial intelligence unit (FIU) is unable to effectively use financial information to collect evidence and trace criminal assets, leading to poor results in money laundering convictions. While the number of convictions has increased, many relate to minor property offenses such as car thefts.
  • Lack of Central Bank Account Register: Slovakia lacks a central bank account register, making it difficult to conduct financial analysis.
  • Failure to Collect Beneficial Owner Information: The country fails to collect beneficial owner information, hindering the ability to trace criminal assets and identify individuals involved in money laundering activities.

Shortcomings in Preventive Measures

MONEYVAL’s assessment is not limited to AML/CFT efforts. The organization also flags shortcomings in the country’s preventive measures, including:

  • Logistical and Procedural Constraints: Slovakia faces logistical and procedural constraints that hinder its ability to effectively prevent money laundering.
  • Limitations on Seizing Assets from Third Parties: The country has limitations on seizing assets from third parties, making it difficult to disrupt money laundering operations.
  • High Burdens of Proof Required for Certain Provisional Measures: Slovakia requires high burdens of proof for certain provisional measures, which can lead to delays in investigating and prosecuting money laundering cases.

Next Steps

Slovakia has been ordered to report back in September 2022 as part of an enhanced follow-up procedure following the publication of the report. The country will be expected to demonstrate significant improvements in its AML/CFT efforts.

Related Developments

In a related development, Slovakia’s banks have demonstrated a good understanding of money laundering risks, but non-bank financial institutions and designated non-financial businesses and professions have struggled to articulate how money laundering might occur within their sectors.