New Law on Banks Strengthens Measures Against Operational Risk
In a move to enhance the stability and security of the banking system, the new Law on Banks has introduced significant changes to strengthen measures against operational risk.
Defining Operational Risk
The law defines operational risk as any risk arising from money laundering and financing terrorism. It provides a framework for the National Bank to supervise and monitor banks’ activities, ensuring that they are in compliance with regulations related to prevention of money laundering and other criminal offenses.
Assessment of Shareholders
The law introduces a more stringent assessment of shareholders with qualified participation in a bank. This includes evaluating their stability, safety, and reputation, as well as assessing the risk related to money laundering and financing terrorism. The law also clearly identifies persons who cannot become shareholders with qualified participation in a bank.
Measures Against Banks
The law provides for a grading system of measures that can be taken by the National Bank against banks, ranging from issuing recommendations and warnings to introducing administration and withdrawing permits. This will enable the National Bank to take swift and effective action in cases where banks violate regulations related to prevention of money laundering and other criminal offenses.
Misdemeanour Sanctions
The law also introduces the possibility for the National Bank to pronounce misdemeanour sanctions without mediation by a court, which will increase the level of efficiency in taking measures against banks that fail to comply with regulations.
Prevention of Money Laundering and Financing Terrorism
The law requires banks to establish a program for preventing money laundering and financing terrorism. The program must include measures such as:
- Enhanced client due diligence
- Business relations with high-risk clients
- Permanent training of employees
- Cooperation with internal audit offices
Amendments to the Law on Fast Money Transfer
The amendments to the Law on Fast Money Transfer strengthen criteria for licensing providers of fast money transfer services, and specify cases where the Governor can withdraw licenses. This includes cases where there is evidence of non-compliance with laws related to prevention of money laundering and other criminal offenses.
Decision on Currency Exchange Operations
A new Decision on Currency Exchange Operations has been adopted, defining conditions, manner, procedure, and documents needed for obtaining a license for currency exchange operations. The authorized currency exchange entity is required to possess a program for preventing money laundering in accordance with regulations defining the prevention of money laundering and financing terrorism.
Guidelines for Implementation
The National Bank has issued guidelines for implementing this Decision, which provides detailed requirements for the content of the program. If the National Bank identifies that an authorized currency exchange entity does not possess such a program or possesses a program that does not contain all necessary elements, it has the right to withdraw the license for currency exchange operations.
Conclusion
Overall, the new Law on Banks and related amendments aim to strengthen measures against operational risk and ensure the stability and security of the banking system in Macedonia. By introducing stricter regulations and guidelines, the National Bank can effectively monitor and supervise banks’ activities, preventing potential threats to the financial system.