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Bank Supervision | Money Laundering and Terrorist Financing Risk Assessment

Government Adopts Money Laundering and Terrorist Financing Risk Assessment

On 31 May 2018, the Government of the Republic of Serbia adopted the national Money Laundering and Terrorist Financing Risk Assessment (ML/TF Risk Assessment). The assessment is a result of cooperation among relevant state authorities and representatives of the private sector (financial and non-financial), and was carried out in line with the World Bank methodology. The NBS participated in the assessment of vulnerability of a part of the Serbian financial system subject to its supervision, i.e. the sectors of banking, insurance, financial leasing, voluntary pension funds, payment institutions and electronic money institutions.  

The objective of the risk assessment is to identify the sectors and practices in a country’s system which pose a potentially higher/lower ML/TF risk, so that the state can adequately respond to the risks through a range of measures and activities, and make adequate decisions on the allocation of resources, with a view to investing more effort and resources in high-risk areas. The identification, assessment and understanding of the ML/TF risk is an essential part of the implementation and development of the national anti-money laundering and terrorist financing system.

The vulnerability assessment covered, among other things, the following: the comprehensiveness of the legal framework, effectiveness of supervision, availability and application of administrative and criminal sanctions, system regulation in terms of the issuance of operating licences and other supervisory consents and approvals, integrity and level of knowledge among employees regarding the prevention of money laundering and terrorist financing, effectiveness of the compliance function, monitoring and reporting of suspicious transactions, and other vulnerability factors.

Based on risk assessment findings, the Government adopted the Action Plan for the Implementation of Recommendations from the Money Laundering and Terrorist Financing Risk Assessment (RS Official Gazette, No 55/2018 оf 16 July 2018).

Early this year, the NBS adopted the Decision on Guidelines for the Application of the Provisions of the Law on the Prevention of Money Laundering and Terrorism Financing for Obligors Supervised by the National Bank of Serbia (RS Official Gazette, No 13/2018), based on which obligors of the Law on the Prevention of Money Laundering and the Financing of Terrorism (RS Official Gazette, No 113/2017) must prepare and update their ML/TF risk analyses in accordance with the Law, Guidelines and national ML/TF risk assessment.