Financial Crime World

Moldova’s Anti-Money Laundering and Combating the Financing of Terrorism Measures: Key Findings and Recommendations

Shortcomings in Moldova’s AML/CFT Measures

Moldova’s efforts to combat money laundering (AML) and terrorist financing (CFT) have several shortcomings that need attention. These include:

Insufficient Institutional Framework

  • The current AML/CFT reforms only focus on the private sector, without addressing the need for improvement in the institutional framework.
  • This lack of emphasis on state institutions creates a weak foundation for effective AML/CFT measures.

Lack of Transparency

  • Moldova’s government institutions lack transparency, making it difficult for civil society and journalists to hold them accountable.
  • This opacity hinders the ability to detect and prevent money laundering and terrorist financing activities.

Inadequate Risk Assessment

  • Moldova failed to conduct a thorough national risk assessment, leading to a new law that does not address all of the country’s shortcomings.
  • A comprehensive risk assessment is essential for identifying and mitigating vulnerabilities in the financial system.

Recommendations for Improvement

To strengthen Moldova’s AML/CFT measures, we recommend:

Adopting a Holistic Approach

  • Address other relevant crimes such as corruption and organized crime in addition to money laundering.
  • This integrated approach will help ensure that all aspects of the financial system are protected.

Expanding AML/CFT Measures

  • Include measures to cover the reform and improvement of state institutions, such as increasing transparency and international cooperation to exchange information.
  • This expansion will help build a more robust and effective AML/CFT framework.

Conducting a Thorough National Risk Assessment

  • Identify, assess, and understand the risks of money laundering and terrorist financing that Moldova faces.
  • This comprehensive risk assessment will inform the development of targeted strategies to mitigate vulnerabilities.

Specific Issues Requiring Attention

Moldova’s AML/CFT measures face several specific challenges:

Corruption in State Institutions

  • Corrupt state institutions, particularly the judicial branch, have been involved in money laundering schemes.
  • Addressing corruption is crucial for building trust and ensuring the effectiveness of AML/CFT measures.

Lack of Reference to Major Money Laundering Schemes

  • The national risk assessment report lacks any reference to major money laundering schemes, including the “Russian Laundromat”.
  • Including these schemes in the assessment will help identify vulnerabilities and inform mitigation strategies.

Insufficient Typology of Cash Flows

  • The report includes only a poor analysis of trafficking of human beings, and the typology of cash flows is missing.
  • Developing a comprehensive typology of cash flows will help detect and prevent money laundering activities.

Conclusion

Moldova’s AML/CFT measures need significant improvement to effectively combat money laundering and terrorist financing. By addressing the shortcomings identified in this report and implementing the recommended improvements, Moldova can strengthen its ability to protect its financial system and ensure a safer environment for its citizens.