Financial Crime World

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Enhancing Anti-Money Laundering and Counter-Terrorist Financing Measures in Moldova

A recent report on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) measures in the Republic of Moldova has highlighted several key findings and recommendations for improvement. The report provides a comprehensive overview of the current state of AML/CFT measures in Moldova, identifying areas of strength as well as areas that require attention.

Money Laundering/Financial Crimes Risks

While ML/FT risks are generally well-understood by authorities in Moldova, there are still some gaps in supervision. Specifically:

  • The report notes that inadequate understanding of ML risks among FIs’ supervisors is a concern, particularly for sectors with lower materiality.
  • There is a need to strengthen supervision and ensure that FIs prioritize the assessment of their business-specific ML/FT threats and vulnerabilities.

Prevention and Detection

The National Risk Assessment (NRA) has taken steps to prevent the misuse of legal entities, but there are still some gaps in supervision. Additionally:

  • FIs have improved their internal risk assessments and governance, but more needs to be done to ensure effective implementation.
  • There is a need to implement a new suspicion-based transaction reporting system as a matter of priority.

Customer Due Diligence

CDD is generally effective in Moldova, but there are some concerns regarding the quality of beneficial ownership (BO) information obtained by banks. Specifically:

  • The report notes that there is an insufficient understanding among authorities and banks regarding the nature of trusts and similar arrangements.
  • There is a need to improve the accuracy and completeness of BO information.

The NRA does not provide a comprehensive analysis of ML/FT risks related to legal entities. Additionally:

  • There are concerns regarding the ability of the Public Services Agency (PSA) to keep BO information accurate and up-to-date without having sanctioning power.
  • The report notes that the PSA has limited resources to effectively implement its responsibilities.

International Cooperation

Moldova’s legal framework for international cooperation is well-developed, but there are some moderate shortcomings regarding mutual legal assistance (MLA) on freezing and confiscation. Specifically:

  • Authorities actively seek international assistance for ML and predicate offense cases.
  • There is a need to improve the effectiveness of MLA procedures.

Recommendations

Based on the report’s findings and analysis, the following priority actions are recommended to improve Moldova’s AML/CFT measures:

  1. Ensure that FIs prioritize the assessment of their business-specific ML/FT threats and vulnerabilities.
  2. Implement a new suspicion-based transaction reporting system as a matter of priority.
  3. Challenge courts with more ML cases relying on inferences that can properly be drawn from available evidence.
  4. Provide law enforcement agencies (LEAs) with sufficient resources and capacities to make effective use of financial intelligence.
  5. Consistently employ the legislative framework to the fullest extent to raise the effectiveness of confiscation of proceeds.

Overall, the report highlights areas for improvement in Moldova’s AML/CFT measures and provides recommendations for strengthening its fight against money laundering and terrorist financing.