By Elizabeth Hearst for AMLi
The Council of Europe’s Anti-Money Laundering body, MONEYVAL has acknowledged progress made by San Marino, but has called for the state to “improve” its regulatory framework.
In its report, MONEYVAL “compliments the overall framework and practical actions” in San Marino, and praises the country for its “substantial level of effectiveness in national anti-money laundering and combating of terrorist financing policies and coordination”.
However, despite these plaudits, the body called for San Marino to implement “further improvements” in “enhancing supervision… money laundering investigation and prosecution and financial sanctions for terrorist financing”.
The body recommends that San Marino “establish and apply a criminal justice policy on investigating and prosecuting money laundering”, adding that “proactive parallel money laundering investigations should be actively promoted”.
MONEYVAL has also called for a “solution to be found” to the country’s “insufficient prison capacity to accomodate all prisoners”, adding that this could be through “building more capacity or making bilateral agreements with other jurisdictions” to allow prisoners serve their sentence in another jurisdiction.
Similarly, MONEYVAL has recommended that San Marino “strengthen the sanctions available” to those culpable of money laundering. The body states that “if custodial sentences are imposed but not served, that can only be a factor which tends to undermine the effectiveness of the AML sanctioning regime”.
“San Marino has a mature and sophisticated AML/CFT system”, according to MONEYVAL. The country was advised in 2016 by the Group of States against Corruption (GRECO), to ratify the Criminal Law Convention on Corruption, and incorporate it into national law.
The body maintains that “San Marino has taken the necessary steps to strengthen financial discipline in the day-to-day operations of political parties”. In 2018, a “large number of political elite of San Marino were convicted”, with “significant amounts of assets confiscated” by law enforcement.
However, “appropriate initiatives need to be taken… to ensure that all private sector categories conduct proper regular checks of their business-specific money laundering and terrorist financing risks”, according to MONEYVAL, who have also called for competent authorities to “heighten the understanding of the private sector and their controls in relation to implementation of customer due diligence and targeted financial sanctions”.
The Committee also recommended that San Marino implements “more guidance” on “suspicious transactions where reporting appears not to be commensurate with the risks” , adding that the nation should “enhance market entry controls”.
The country’s Financial Intelligence Agency “should intensify its work on strategic analysis of specific money laundering trends, patterns and complex money laundering schemes”, as the country “might be used as one of the several jurisdictions to launder money”, adding that “awareness training should be stepped up”.
San Marino will now be subject to MONEYVAL’s regular follow-up reporting process “as a result of the positive report”, becoming “one of the only five member jurisdictions with this outcome so far”, according to a statement released.
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