Serbia identified as jurisdiction that has strategic AML/CFT deficiencies

As part of its on-going review of compliance with the anti-money laundering/ combating the financing of terrorism (AML/CFT) standards, the Financial Action Task Force (FATF) identified Serbia, along other countries, as jurisdictions that has strategic AML/CFT deficiencies.

FATF is an inter-governmental body with objective to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

Apart from Serbia, several other countries have been listed as jurisdictions with strategic deficiencies (Ethiopia, Iraq, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Vanuatu, Yemen).

Bosnia and Herzegovina was listed as jurisdiction no longer subject to the FATF’s on-going global AML/CFT compliance process, following significant progress in improving its AML/CFT regime and establishing the legal and regulatory framework to meet the commitments in its action plan regarding the strategic deficiencies.

While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies.

In case of Serbia, although the Serbian Parliament passed a new Law on Prevention of Money Laundering and Financing of Terrorism in late 2017 (in force as of 1 April 2018), FATF noted that in February 2018, Serbia made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, address any related technical deficiencies and work on implementation of its action plan to accomplish objectives such as:

1. updating the National risk assessment to develop a better understanding of key risks;
2. subjecting lawyers, notaries, and casinos to supervision; implementing risk-based AML/CFT supervision, and increasing supervisory staff resources commensurate with sectoral risks;
3. implementing measures related to Customer Due Diligence (CDD), politically exposed persons, and wire transfers in line with the FATF Standards;
4. establishing an effective mechanism for ensuring timely access to beneficial ownership information regarding legal persons, and a framework to ensure that such information is adequate, accurate, and current;
5. ensuring adequate and effective investigation and prosecution of third-party and stand-alone ML;
6. ensuring the implementation without delay of targeted financial sanctions measures related to terrorist financing, providing guidance to reporting entities, and taking proportionate measures for non-profit organisations in line with a risk-based approach; and
7. ensuring the implementation without delay of targeted financial sanctions related to proliferation financing.

For more information on this topic as well as for assistance regarding requirements of Serbian AML/CFT regulations and harmonization of your internal acts, please contact Nenad Kovačević and Nedeljko Velisavljević.