Insights

In accordance with the new BNM Regulation No. 280, effective from November 7, 2024, all Non-Banking Financial Institutions (IFNs) in Moldova are now required to implement an internal program for Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT). This regulation establishes a robust framework designed to enhance the effectiveness of anti-money laundering efforts and ensure compliance with international standards. The implementation of these requirements presents both significant challenges and opportunities for IFNs.

Key Requirements of the Regulation

The BNM Regulation No. 280 mandates IFNs to establish and maintain a comprehensive AML program. Among the key components of this program is a risk-based approach, where IFNs must assess and understand the money laundering and terrorist financing risks specific to their business activities. This ensures that risk management measures are proportionate to the identified risks. Furthermore, IFNs are required to develop, implement, and regularly update AML policies and procedures to prevent illegal activities and ensure compliance with local and international laws. Institutions must apply stringent customer due diligence (CDD) measures, including verification of the identity of clients and beneficial owners, as well as ongoing monitoring of business relationships. In addition to these measures, IFNs must establish internal controls for monitoring and reporting suspicious activities to the relevant authorities, with regular training programs for employees to keep them informed of the latest regulatory requirements. Detailed records of transactions and customer identification must also be maintained for a minimum period as defined by the regulation.

Risks for Non-Implementation of an Internal AML Program

Failure to implement an internal AML program, as mandated by the BNM Regulation No. 280, can expose IFNs to significant risks. Non-compliance with AML regulations can lead to severe penalties, including hefty fines and operational restrictions imposed by the National Bank of Moldova (BNM) and other regulatory bodies. In addition, IFNs failing to establish adequate AML programs may suffer reputational damage, losing customer trust and potentially losing business relationships with other financial institutions or regulatory bodies. Furthermore, inadequate AML measures may make an IFN liable for facilitating money laundering or terrorist financing activities, leading to legal action against the institution and its executives. Without effective internal controls and monitoring systems, IFNs become more vulnerable to financial crime, including fraud, money laundering, and terrorist financing, which can compromise the integrity of their operations.

Best International Practices for AML Compliance

To meet the new regulatory standards and mitigate risks, IFNs can adopt international best practices in AML compliance. One of the most important practices is the adoption of a risk-based approach, as advocated by international bodies like the Financial Action Task Force (FATF). This ensures that institutions allocate resources to higher-risk areas, allowing for more efficient detection and management of AML risks. Another best practice is the implementation of enhanced due diligence (EDD) for high-risk clients and transactions, particularly for politically exposed persons (PEPs) or clients from high-risk jurisdictions. Leveraging technology for monitoring and reporting is also essential. Using automated AML software to monitor transactions in real time and generate alerts for suspicious activities ensures that IFNs can detect and report potential financial crimes promptly. Lastly, regular, comprehensive training programs for employees are critical to ensuring they are aware of emerging AML threats and are capable of applying the institution’s policies and procedures effectively.

Crowe Moldova’s Expertise in AML Compliance

Crowe Moldova experts are well-equipped to assist IFNs in navigating the complexities of AML compliance. Our team offers a wide range of services, including helping IFNs develop and implement a robust AML program tailored to their specific needs, ensuring that all regulatory requirements are met and that the program is both efficient and effective. Crowe Moldova can also offer training sessions to ensure that your employees are well-versed in AML regulations and internal procedures, empowering them to identify and respond to potential risks effectively. In addition, our team can conduct independent audits of your AML framework to assess its effectiveness, identify gaps, and provide actionable recommendations to strengthen your institution’s compliance efforts.

Understanding the complexities and challenges posed by the implementation of BNM Regulation No. 280, Crowe Moldova, in collaboration with the State Service for Prevention and Combatting Money Laundering (SPCsb) and the National Bank of Moldova (BNM), organized the practical workshop "Challenges, Risks, and Resilience for Non-Banking Financial Institutions in the Area of AML/CFT." This event aimed to create a professional dialogue platform, promote knowledge sharing, and provide actionable recommendations on applying best practices for AML compliance. The workshop brought together key stakeholders, including regulatory bodies, financial institutions, and AML experts, to discuss practical solutions for overcoming the regulatory challenges and ensuring the successful implementation of AML measures. Participants had the opportunity to gain insights into the latest regulatory developments and learn from the experiences of other institutions facing similar challenges.