New MONEYVAL report on Serbia: improvements in the fight against money laundering and terrorist financing led to rating upgrade, minor gaps remain

Serbia has improved its anti-money laundering and terrorist financing measures, demonstrating significant progress in the level of compliance with FATF (Financial Action Task Force) standards, according to a new follow-up report published today by the Council of Europe anti-money laundering body MONEYVAL. The positive steps taken by the authorities have resulted in Serbia being upgraded from “partially compliant” to “broadly compliant” in four areas related to the activities of designated non-financial businesses and professions, as well as international cooperation. However, in the area of ​​new technologies, where new international requirements for virtual assets have been introduced, Serbia’s rating has been lowered.

Today’s review focused on Serbia’s AML / CFT (anti-money laundering and anti-terrorist financing) obligations for lawyers and notaries, entry requirements in the market for accountants and real estate agents, the international cooperation of financial supervisors. MONEYVAL has examined a series of legislative, regulatory and institutional measures introduced by Serbia in these areas, however, due to its procedural limitations, it has not assessed to what extent they have been effectively implemented in practice.

Among the positive developments marked by MONEYVAL is the extension of the scope of entities obliged to exercise vigilance with regard to clients to lawyers and notaries. In addition, the amended legislation now requires casinos to identify and verify the identity of the customer at the entrance, to obtain a written declaration from the customer certifying that he is participating in his name, and in the event of a single transaction or several interdependent transactions. greater than EUR 2,000 to perform customer due diligence in order to identify and verify the beneficial owner of the transaction. Previously identified gaps regarding the need for enhanced due diligence for high-risk countries, whistleblowing and confidentiality have also been addressed. Serbia has also taken the necessary measures in the area of ​​licensing of accountants and real estate agents with a view to preventing criminals and their associates from being professionally accredited and holding a significant / controlling stake or a managerial function. in these companies.

In the area of ​​international cooperation, financial supervisors are now clearly empowered to cooperate with their foreign counterparts; a general obligation has been imposed on the supervisory authorities to put in place appropriate safeguards and to respect confidentiality requirements.

However, some minor shortcomings remain, including the definition of beneficial owners, the record keeping requirements fulfilled by lawyers and notaries, as well as the application of countermeasures proportionate to the risks identified.

The monitoring report also examines the implementation of the new international requirements for virtual assets, which cover, among others, the most important virtual currencies and the providers of these assets. While MONEYVAL has made significant progress in implementing the new requirements for virtual assets, it has also discovered strategic gaps, and Serbia’s rating on the implementation of this updated recommendation has been lowered by “Largely compliant” to “partially compliant”.

Overall, Serbia has succeeded in meeting MONEYVAL’s general expectation that countries have corrected most – if not all – technical compliance deficiencies within five years of the adoption of the mutual evaluation report. . The court has fully complied with five of the 40 FATF recommendations constituting the international AML / CFT standard. Serbia retains minor shortcomings in the implementation of 34 recommendations for which it was rated “broadly compliant”. One recommendation (on new technologies) remains “partially complaint”. Serbia does not have a “non-compliant” rating.

Serbia will report to MONEYVAL on the progress made to strengthen its implementation of AML / CFT measures in two years.

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