Moldova – Know Your Customer (KYC) Rules

 

 

Moldova is not considered a regional financial center. The Government of Moldova (GOM) monitors money flows throughout the country, but does not exercise control over its breakaway region of Transnistria. Transnistrian authorities do not adhere to GOM financial controls and accepted anti-money laundering norms, and maintain a banking system independent of and not licensed by the National Bank of Moldova. Criminal proceeds laundered in Moldova derive substantially from tax evasion, contraband smuggling, and corruption. Money laundering has occurred in the banking system and in exchange houses, along with offshore financial centers in Transnistria. Fifteen banks constitute the Moldovan financial system. Neither offshore banks nor shell companies are permitted to operate in Moldova. Internet gaming sites do exist, although no statistics are available on the number of sites in operation. Internet gaming comes under the same set of regulations as domestic casinos. Enforcement of the regulations is sporadic.

Moldova contains six free trade zones (FTZs), some of which are infrequently used. Reportedly, goods from abroad are sometimes imported into the FTZ and then resold and exported to other countries with documentation indicating Moldovan origin. Companies operating in FTZs are subject to inspections, controls, and investigations by inspectors from the Customs Service and the Center for Combating Economic Crime and Corruption.

KNOW-YOUR-CUSTOMER (KYC) RULES:

 

Enhanced due diligence procedures for PEPs:

 

PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably

    • Foreign PEP: YES
    • Domestic PEP: YES

Moldova – KYC covered entities

 

The following is a list of Know Your Customer entities covered by Moldovan Law:

    • Banks
    • Currency exchange offices
    • Investment funds
    • Investment management companies
    • Deposit companies
    • Fiduciary companies
    • Securities dealers
    • Stock exchange companies
    • Brokers
    • Insurance and reinsurance companies
    • Company formation agents and ownership registries
    • Gaming and lottery organizers and institutions (including Internet casinos)
    • Real estate agents
    • Dealers of precious metals or gems
    • Auditors
    • Accountants
    • Financial consultants
    • Investment or fiduciary service providers
    • Lawyers
    • Notaries
    • Organizations which provide postal and telephone mandate exchange or transfer of resource services

Moldova – Suspicious Transaction Reporting (STR) Requirements:

 

Number of STRs received and time frame: 215,214 from January to October 2011

Number of CTRs received and time frame: 16,480 from January to October 2011

The following is a list of STR covered entities covered by Moldovan Law:

    • Banks
    • Currency exchange offices
    • Investment funds
    • Investment management companies
    • Deposit companies
    • Fiduciary companies
    • Securities dealers
    • Stock exchange companies
    • Brokers
    • Insurance and reinsurance companies
    • Company formation agents and ownership registries
    • Gaming and lottery organizers and institutions (including Internet casinos)
    • Real estate agents
    • Dealers of precious metals or gems
    • Auditors
    • Accountants
    • Financial consultants
    • Investment or fiduciary service providers
    • Lawyers
    • Notaries
    • Organizations which provide postal and telephone mandate exchange or transfer of resource services

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

 

Prosecutions: Seven from January to October 2011
Convictions: Eight from January to October 2011

 

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Moldova has made some progress in instituting a legal framework for combating money laundering that is consistent with international standards. However, in November 2010, the Constitutional Court struck down some of the most relevant provisions of the anti-money laundering law. Specifically, the Court invalidated the provisions of the law enabling the Financial Intelligence Unit (FIU) to collect STRs and temporarily freeze accounts suspected of involvement in illegal activity. The GOM reacted by issuing a decision re-establishing the requirement for financial institutions to report STRs to the FIU.

In addition, on April 7, 2011, Moldova‘s parliament enacted amendments to the anti-money laundering law which defines the STR reporting obligations according to international standards, sets an equivalent $10,000 threshold for reporting cash transactions, provides additional autonomy for the FIU, and regulates the FIU‘s ability to freeze accounts involved in suspicious transactions. The enactment of the anti-money laundering amendments has had a positive impact on the FIU‘s institutional development. In addition, the FIU increased its operational capacity by securing electronic access to more governmental databases.

Moldova should continue to review and amend the criminal procedure code to institute non-conviction based confiscation and to permit special investigative techniques to be applied to a wider range of offenses associated with money laundering and terrorist financing. Additionally, the GOM should criminalize tipping off.