Tougher Regulations for Banks in Macedonia

Skopje, Macedonia

The National Bank of Macedonia has been granted new powers to take a stricter stance against banks and financial institutions that fail to comply with regulations. The new law on banks introduces significant modifications, giving the governor of the National Bank more tools to enforce compliance.

New Powers for the Governor

The changes come into effect following the adoption of two European directives: Directive 2006/48/EC relating to the taking up and pursuit of the business of credit institutions (recast) and Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions (recast).

• The governor has the right to issue recommendations, warnings, or protocols to banks that fail to comply with regulations.
• The governor can limit certain activities or even withdraw permits for taking up and pursuing business in cases where a bank is found to be involved in money laundering or other criminal offenses.

Enhanced Measures Against Money Laundering

The National Bank has also adopted a decision strengthening measures against money laundering and financing terrorism. This includes:

• Enhanced client due diligence and business relations with high-risk clients
• Permanent training of employees and cooperation with internal audit offices
• Obligations for banks to create risk profiles based on relevant information and data about clients and business relationships

Amendments to Law on Fast Money Transfer

In May 2007, amendments were made to the Law on Fast Money Transfer, strengthening criteria for licensing providers of fast money transfer services. This includes:

• The governor can withdraw licenses in cases where there is evidence of non-compliance with laws related to preventing money laundering and financing terrorism
• Misdemeanor sanctions against providers of fast money transfer services and responsible persons in cases where programs for preventing money laundering are not implemented or procedures are not in accordance with regulations

New Decision on Currency Exchange Operations

A new decision has been adopted defining conditions, manner, procedure, and documents needed for obtaining licenses for currency exchange operations. This includes:

• Authorized entities must possess a program for preventing money laundering, as regulated by the Law on Foreign Exchange Operations
• The National Bank can withdraw licenses if authorized entities do not possess such programs or if programs do not contain necessary elements

These changes demonstrate the National Bank’s commitment to strengthening regulations and ensuring the stability of the banking system in Macedonia.