As a member of the European Union, Slovakia has been working hard to combat money laundering and terrorism financing. Substantial anti-money laundering (AML) procedures must be implemented to protect the country's financial industry and contribute to global efforts to combat illicit economic activity.
Overview of Money Laundering
As in many parts of the world, money laundering activities occur in Slovakia. These criminal activities negatively affect the economy of Slovakia, so there are several anti-money laundering regulations and laws to reduce money laundering activities. According to the International Narcotics Control Strategy Report (INCSR) submitted by the US Department of State in 2016, Slovakia has been recognized as a Concerned Jurisdiction. Such criminal activity is generally carried out in Slovakia in eastern and southeastern Europe. Some of the crimes associated with money laundering in Slovakia are as follows: auto theft, contraband, tax fraud, arms, and illegal drug smuggling.
Slovakia is also a transit and destination country for laundering money obtained from these crimes. Besides, Slovakia has no free trade zone and high seas, nor are there any international sanctions against the government. Slovakia has a population of 5.4 million, and when we look at its economy, according to the World Bank, there are exports of about 92,36% of GDP; it has an open economy, and the banking sector in the country is also robust.
The Financial Action Task Force (FATF) Status
The most recent follow-up Mutual Evaluation Report on implementing anti-money laundering and counter-terrorist financing standards in Slovakia was completed in 2022. According to the follow-up evaluation, Slovakia was found to be Compliant for five and Nearly Compliant for 22 of the FATF's 40 recommendations. It received a rating of Highly Effective for 0 and Substantially Effective for 1 of the Effectiveness and Technical Compliance evaluations.
These evaluations examine Slovakia's efforts to combat money laundering and terrorist financing. While the country is generally deemed to conform with many international AML/CTF standards, there may be areas where further changes are required for full compliance and increased effectiveness. Slovakia must continue to work on these issues to maintain a solid AML/CTF framework and fulfill international expectations in combating financial crime.
Regulators in Slovakia
Slovakia also has some regulatory institutions to reduce the effects of money laundering. The Financial Intelligence Unit is an authority responsible for overseeing compliance with the Slovak AML Act. Apart from this, some rules have supervisory authority within the scope of special regulations.
If the organizations meet the "obliged entities" definition under the Slovak AML Act, the regulators are responsible for supervising these entities. Such regulatory authorities include the National Bank of Slovakia, the Financial Directorate of the Slovak Republic, and tax and customs offices. Before the audit activities of these institutions start, information about any investigation related to the obliged entity being audited is sent to the Financial Intelligence Unit and informed. Likewise, any unusual business transaction or non-compliance with Slovak AML Law is detected in these institutions.
In that case, the administrative sanctions imposed in return should be reported to the Financial Intelligence Unit. Finally, the organizations obliged to be audited audits can also be carried out by the Financial Intelligence Unit and the relevant supervisory authority.
Under the Slovak AML Act, some institutions must comply with money laundering regulations. In addition, within the scope of these regulations, organizations are obliged to report any suspicious transaction to the required authority. The following institutions can be given as examples of obliged institutions:
- Stock Exchange Businesses
- Securities Warehouse
- Management Companies
- Tax and Economic Consultants
- Some companies that offer insurance services
- Post Offices
- Notary Officers
AML Solutions for Slovakia
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