North Macedonia Tightly Regulates Financial Institutions to Combat Money Laundering and Terrorism Financing

Strict Secrecy Requirements for Investigating Potential Money Laundering and Terrorism Financing Cases

According to the AML/CFT Law, financial institutions in North Macedonia are required to maintain strict secrecy when investigating potential money laundering (ML) and terrorism financing (TF) cases. Reporting entities must not disclose to clients or third parties that an analysis is being conducted or has been initiated to determine grounds for suspicion of ML/TF.

Confidentiality Provisions and Penalties

The law also prohibits disclosing data, information, or documentation submitted to the Financial Intelligence Office (FIO) or any orders issued by the FIO. Breaching these provisions can result in penalties ranging from €12,000 to €15,000 for natural persons and up to €30,000 to €40,000 for big traders.

Compliance Obligations

Reporting entities are required to:

• Conduct regular risk assessments of ML/FT
• Perform customer due diligence
• Submit data and documentation to the FIO
• Appoint an authorized person and deputy, or establish a department for prevention of ML/FT
• Conduct internal controls at least once a year

Whistle-Blower Protection

The law provides for whistle-blower protection, with the adoption of the Law on Whistle-blower Protection in 2015 and its last amendment in 2020. However, substantial legal, institutional, and practical preparations are still needed to ensure effective implementation of the law.

Sanctions and Anti-Corruption Laws

The country has implemented international sanctions against individuals and entities involved in ML/FT, as well as anti-bribery and corruption laws to combat financial crimes.

Challenges Ahead

Despite progress made, there are still forthcoming issues and legislation that need to be addressed to improve the effectiveness of law enforcement in fighting ML/FT.