In a report published today, Council of Europe’s anti-money laundering body MONEYVAL calls on North Macedonia’s authorities to further strengthen measures to combat money laundering (ML), financing of terrorism (FT) and financing of proliferation (FP), in particular in the investigation and prosecution fields.
The Council of Europe’s anti-money laundering body draws up a comprehensive assessment of the country’s level of compliance with international standards set by the Financial Action Task Force (FATF).
MONEYVAL concludes that, having strengthened its legal framework since the last mutual evaluation, North Macedonia has laid the foundations for a sound regime to tackle money laundering and terrorist financing, but needs to improve the implementation of measures in several areas.
On the operational side, North Macedonia has achieved a substantial level of effectiveness for understanding its ML/TF risks and has implemented adequate AML/CFT policies and strategies to mitigate them. The report recommends that the authorities enhance their understanding of risks posed by legal entities, casinos and the informal economy and calls for a more in-depth assessment of the impact on AML/CFT efforts in terms of the consequences of integrity issues in the judiciary and prosecution.
While modest results have been achieved as regards money laundering investigations and prosecutions, law enforcement and prosecutors should systematically pursue parallel financial investigations and target more complex cases of ML involving organised crime, notably drug trafficking and trafficking in human beings, as well as tax evasion and corruption. MONEYVAL also invites the authorities to apply systematically the ‘follow the money’ principle to improve confiscation levels.
Authorities have generally a good understanding of TF-related risks and inter-agency co-operation functions well. Since MONEYVAL´s last evaluation in 2014, two persons were convicted for FT, and where TF convictions were not possible, the authorities applied alternative measures. MONEYVAL considers that the authorities should regularly assess TF risks, given the situation noted in the report regarding foreign terrorist fighters. They should also take further action to fully align the TF offence and the legal framework for targeted financial sanctions on both terrorism and proliferation financing with international standards.
North Macedonia has taken steps to improve the overall AML/CFT supervisory system. It still needs to introduce major improvements to implement an effective risk-based approach to AML/CFT supervision of financial institutions and most designated non-financial businesses and professions (DNFBPs) – such as lawyers, notaries, accountants, tax advisors, and real state agents.
The AML/CFT supervisory authorities should intensify their supervisory action and be given stronger powers to enforce compliance as well as additional resources, where necessary. In addition, the country should take steps to ensure that there is a risk-based supervision or monitoring of the Non-Profit Organisation (NPO) sector exposed to higher risk of TF abuse, without hampering legitimate NPO activity.
The report also recommends that authorities step up their efforts to implement adequately beneficial ownership standards.
MONEYVAL finds that the North Macedonia’s authorities co-operate internationally in a constructive manner, although there are some shortcomings in terms of timeliness and quality of some of the responses provided. This could be improved by establishing clear policy objectives and procedures, and an integrated case management system and prioritisation mechanisms.
North Macedonia is expected to report back to MONEYVAL under its enhanced follow-up reporting process in May 2025.
