Financial Crime World

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Measures in the Slovak Republic

Awareness of AML/CFT Risks

Financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs) demonstrated varying levels of knowledge about ML/TF risk mitigation frameworks. While some FIs and DNFBPs have a good understanding of these risks, others lack the necessary awareness.

  • Knowledge gaps: FIs and DNFBPs need to improve their knowledge about ML/TF risk mitigation frameworks.
  • Training needs: Staff in FIs and DNFBPs require training on AML/CFT policies and procedures.

Verification of Beneficial Ownership

FIs met on-site stated that they identify natural persons behind the customer, but there were gaps in understanding the concept of beneficial ownership. This is a critical aspect of AML/CFT measures, as it helps to prevent money laundering and terrorist financing.

  • Beneficial ownership: FIs need to understand the concept of beneficial ownership and its importance in preventing money laundering.
  • Identification procedures: FIs must have clear identification procedures for verifying beneficial owners.

Suspicious Transaction Reporting

All FIs and DNFBPs could describe their suspicion reporting obligations, but some non-bank FIs and DNFBPs had not filed any Suspicious Transaction Reports (STRs) nor identified any suspicions internally. This is a critical aspect of AML/CFT measures, as it helps to prevent money laundering and terrorist financing.

  • Suspicion reporting: FIs need to have clear procedures for identifying and reporting suspicious transactions.
  • Training needs: Staff in FIs require training on suspicious transaction identification and reporting.

Control Systems

Banks and larger FIs have appropriate control systems to mitigate ML/TF risks, while casinos and auditors appeared to have adequate internal policies and procedures. However, smaller FIs and some DNFBPs lack the necessary control systems.

  • Control systems: FIs need to implement effective control systems to prevent money laundering and terrorist financing.
  • Internal policies: DNFBPs must have clear internal policies and procedures in place to prevent money laundering and terrorist financing.

Supervision

The Financial Intelligence Unit (FIU) and the National Bank of Slovakia (NBS) demonstrated a satisfactory level of understanding of general ML/TF risks in their supervised sectors. However, there are areas for improvement.

  • Supervision: The FIU and NBS need to conduct more targeted and risk-based inspections.
  • Subject-specific risk ratings: The NBS should establish a documented process for subject-specific ML/TF risk ratings to drive frequency, scope, and nature of future supervisory onsite/offsite inspections.

Key Findings and Recommendations

  1. FIs and DNFBPs need to improve their knowledge about ML/TF risk mitigation frameworks and strengthen their internal controls.
  2. The NBS should establish a documented process for subject-specific ML/TF risk ratings to drive frequency, scope, and nature of future supervisory onsite/offsite inspections.
  3. The FIU and the NBS should conduct more targeted and risk-based inspections.
  4. DNFBPs need to implement AML/CFT compliance structures in place.

Conclusion

While Slovakia has made progress in implementing AML/CFT measures, there are areas that require improvement to strengthen the country’s resilience against ML/TF risks.