Financial Crime World

Preventing and Combating Money Laundering and Terrorist Financing in Moldova

Moldova has implemented various legislation to prevent and combat money laundering and terrorist financing. This article provides an overview of the key points, including sanctionable violations, sanctions, term of liability, mitigating and aggravating circumstances, and recommendations.

Sanctionable Violations

The following are considered sanctionable violations in Moldova:

Failure to Impose Precautionary Measures

  • Failure to impose precautionary and other measures in cross-border banking relations
  • Violation of the prohibition of opening anonymous accounts
  • Failure to comply with information requirements upon fund transfers
  • Failure to identify politically exposed persons (PEPs), their family members, and associated individuals
  • Establishing or continuing business relationships with PEPs without senior management approval

Failure to Identify Source of Assets

  • Failure to identify the source of assets
  • Lack of evidence for information and documents
  • Lack of records of all transactions
  • Failure to inform authorities on suspicious activities or transactions
  • Violation of confidentiality obligations

Sanctions

The following sanctions may be imposed in case of a sanctionable violation:

Administrative Sanctions

  • Public statement in the media identifying the natural or legal person and the nature of the breach
  • Prescription ordering cessation of illicit behavior and abstention from repetition
  • Suspension of activity, suspension or withdrawal of authorization for a period of 3 months to 1 year
  • Temporary ban on exercising management functions for a senior management person for 3 months to 1 year

Financial Sanctions

  • Fine up to MDL equivalent of €5 million

Term of Liability

The term of liability is five years from the time of the violation.

Mitigating Circumstances

The following mitigating circumstances may be taken into account:

  • Effective collaboration with authorities in controls
  • Express recognition of the act committed until the issuance of the decision
  • Cessation of the violation and implementation of remedial actions

Aggravating Circumstances

The following aggravating circumstances may be considered:

  • Previous infringements of AML legislation
  • Non-cessation of the violation and non-implementation of remedial measures
  • Significant nature of the damage

Recommendations

To prevent money laundering and terrorist financing, reporting entities should adopt internal policies and methods for working with clients, data storage, internal control, risk evaluation, and management of conformity and communication. Additionally, they should:

Adopt AML/TF Prevention Program

  • Include policies, methods, procedures, strict rules, and internal control actions directed towards preventing money laundering and terrorism financing
  • Address KYC (Know Your Customer) rules
  • Identify complex and unusual transactions
  • Report suspicious activities to the authorities
  • Evaluate risk management
  • Promote ethical and professional norms in the supervised sector

Implement Continuous Training and Audit

  • Provide continuous training of employees and selection of personnel
  • Conduct audit to ensure control of the internal system