Macedonia

Last updated: 26/02/2010


CENTRAL AUTHORITY FOR REPORTING

The Authorities for reporting suspicious transactions are the Ministry of Finance and the Office for Preventing Money Laundering and Financing Terrorism (‘AML Office’).

The office is organised in two departments: Department for Regulative and System Development and Department for Preventing of Money Laundering.


OTHER ANTI-MONEY LAUNDERING REGULATOR(S)

According to the national strategy for combating money laundering and terrorism financing, an advisory body was formed to combat money laundering and terrorism financing.

This organizational body is managed by the director of the Office for Prevention of Money Laundering and Financing Terrorism, and its members are representatives of the following state authorities:


ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

Yes.


HAVE THE MACEDONIAN PROVISIONS BEEN HARMONISED WITH THOSE OF THE THIRD EU MONEY LAUNDERING DIRECTIVE? IF NOT, IS IT EXPECTED TO HAPPEN? AND WHEN WILL IT BE IMPLEMENTED?

Although not a member of the EU, Macedonia’s anti-money laundering regulations are generally in line with the European Directive 2005/60/EC, the 40 FATF Recommendations and the 9 Special FATF Recommendations for preventing terrorism financing.


LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

  • Moneyval’s Mutual Evaluation Report dated 21 September 2009 (the “Moneyval Report”) noted the following legal developments in Macedonia:
  • Draft-Law amending the Law on Prevention of Money Laundering and Other Proceeds of Crime and Financing Terrorism (the “Draft-Law”). This Draft-Law provides harmonisation with the Commission Directive 2005/60/EC, the 40 FATF Recommendations and the 9 Special FATF Recommendations regarding the prevention of financing terrorism.

    This Draft-law suggest provisions creating obligations for the entities in the direction of undertaking of stricter measures for identification and keeping records validating the undertaken measures related to client due diligence, monitoring of transactions from and to the countries which have not implemented the measures for prevention of money laundering and financing terrorism and unusually large transactions, precise determination of the contents of internal programmes and organization of the Units for Preventing of Money Laundering and Financing Terrorism, stricter penal policy for violating the provisions of the Law.

  • In January 2009, the Government of the Republic of Macedonia adopted the National Strategy for Prevention of Money Laundering and Financing Terrorism. As a middle term strategic document, the role of the National Strategy is the arrangement of the implementation of planned measures and activities in the period 2009-2011.

    Fifty activities have been planned in order to meet the determined objectives: harmonising of the regulations, institutional upgrading, efficient system for inter-institutional cooperation, strengthening of the international cooperation and raising of public awareness regarding the necessity for undertaking of measures for prevention of money laundering and financing terrorism.

    By the implementation of the planned activities, it is expected for the National Strategy to provide more efficient system for preventing of money laundering and terrorism financing in the Republic of Macedonia, notably:
  1. More efficient disclosure, documentation and investigation of criminal acts related to money laundering and financing terrorism, i.e. higher number of criminal charges and court decisions for money laundering and financing terrorism;

  2. Office for Prevention of Money Laundering and Financing of Terrorism should be efficient, with high level of staff and technical equipment, i.e. it should be set up as an institution in accordance with the standards of the countries from Western Europe;

  3. Harmonisation of the laws with the acquis communautaire of the EU and the international standards;

  4. Strengthened and more efficient monitoring of entities regarding the application of measures and activities intended for combating money laundering and financing terrorism;

  5. Trained and efficient administration;

  6. Strengthened and efficient inter-institutional and international cooperation;

  7. Raising of citizens' awareness regarding the importance of the combat against money laundering and financing terrorism and the role and the place of state authorities and other institutions participating in this combat.
  • In March 2009, the Assembly of the Republic of Macedonia ratified the Council of Europe Convention on Laundering, search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS No 198).

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

No information available. 


LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

The Moneyval Report provides that the AML Office has undertaken large number of activities geared towards, inter alia, lawyers.

These activities seek to raise awareness of the dangers of money laundering and financing terrorism. Notably, two books: Strategy for Prevention of Money Laundering and Financing Terrorism and The Office for Prevention of Money Laundering and Financing Terrorism can be found on the AML Office’s website.


IS THE LAW SOCIETY/ BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

Pursuant to Article 47 of the AML Law, the Bar Chamber of the Republic of Macedonia established the Monitoring Commission to monitor the measures and the activities for prevention of money laundering and financing terrorism by lawyers. The Moneyval Report states that the Monitoring Commission has conducted four monitorings and no infringements of the application of legal obligations have been reported.

However, the Moneyval Report is optimistic that the Draft-Law will strengthen the control over the legal profession. The Draft-Law envisages that besides the Commission of the Bar Chamber, the AML Office will also be responsible for monitoring the work of lawyers.


DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

Client Due Diligence

Article 9 of the AML Law provides that the CDD shall comprise of the following activities: 

  1. Identification of the client and verification of the client’s identity;

  2. Identification of the beneficial owner and the principal and verification of his/her identity, as well as ownership and management structure;

  3. Obtaining information on the purpose and intended nature of the business relationship or the transaction, and

  4. Conducting ongoing monitoring of the business relationship, including detailed scrutiny of transactions undertaken within the frames of that relationship in order to ensure that the transactions are being conducted in compliance with the client’s intention, the business and risk profile and the client’s financial standing, as well as ensuring that the data on the client are kept up-to-date. 

Identification of the Client and the Beneficial Owner

According to Article 10 of the AML Law:

  1. The identity of the client or the beneficial owner when they are a natural person hall be established and verified with the submission of an original and valid document (personal documents), with the character of public documents or a certified transcript of that document by a notary public, containing a photograph of the person. A certified transcript by a notary public may only be used when the client acts on behalf of a third party which is not physically present;

  2. The document shall verify the name, surname, date and place of birth, place and address of permanent or temporary residence, personal identification number and number of the identification card and the issuing authority and date of validity of the identification card;

  3. The identity of the client or the beneficial owner when they are a foreign natural person shall be established on the basis of the data in his/her original travel documents or a transcript certified by a notary public;

  4. If some of the data referred to in paragraph 2 of this Article cannot be verified from the identification document, the entity should require other public documents to determine the required information or require a verified statement from the client for that particular information and its accuracy;

  5. The identity of the client or the beneficial owner when they are a legal person shall be established with the submission of an original or a certified transcript by a notary public for registration at the central register;

  6. The seat and tax identification number of the legal person shall be determined from the registration entry;

  7. The identity of the client or the beneficial owner when they are a foreign legal person shall be established on the basis of verified court registration or registration from another competent authority, not older than six months.

Article 11 of the AML Law provides that:

  1. The entities shall be bound to verify the identity of the client or the beneficial owner before the establishment of a business relationship or carrying-out the transaction;

  2. By way of derogation from paragraph (1) of this Article, the entities may allow the verification of the identity to be completed during the establishment of a business relationship if this is necessary not to interrupt the normal conduct of the business relations and when there is lesser risk of money laundering or financing terrorism.

It should be noted that the Draft Law proposes considerable changes to Article 10 of the AML Law.


DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Yes.


ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

The obligation for taking measures for enhanced CDD is regulated in the Article 14 of the AML Law, which states that:

  1. Where there is higher risk of money laundering or financing terrorism established on a risk assessment basis, the entities should apply enhanced client due diligence in addition to the measures referred to in Articles 8, 9 and 10 of this Law, and in particular in the cases referred to in paragraphs (2), (3), and (4) of this Article.

  2. Where the client is not physically present for identification purposes, the entities should take one or several of the following measures:

    1. Determining the client's identity by additional documents, data or information;

    2. Verifying the documents supplied, or requiring that they are certified by another financial institution of the Republic of Macedonia, an EU Member State or a country where the regulations provide for at least identical requirements for taking measures for prevention of money laundering and financing terrorism as the requirements provided for by this Law;

    3. Ensuring that the first payment is carried out through an account of the client in a bank in the Republic of Macedonia.
  1. Where banks establish correspondent banking relations with banks for which a simplified due diligence is not permitted pursuant to Article 13 of this Law, they are bound to:

    1. Gather sufficient information about the respondent bank to determine fully the nature of its business and to determine its reputation and the quality of supervision;

    2. Gather information and on the basis thereof assess the system for protection against money laundering and financing terrorism;

    3. Obtain approval from the management board for establishing a new correspondent banking relation;

    4. Precisely prescribe the mutual rights and obligations, and

    5. Ensure that the respondent bank has verified the identity of and performed ongoing client due diligence, and to provide conditions for obtaining the relevant client due diligence data from the correspondent bank.

  2. When the transaction is carried out through a principal, upon verifying his/her identity, the principal shall be required to make a statement on the: type, aims, final beneficiary and other participants in the transaction.

  3. When the entities perform transactions or enter into a business relation with politically exposed persons, they shall be required to:

    1. Perform analysis in order to determine whether the client is a politically exposed person on the basis of procedures proscribed by the Office in cooperation with the supervisory bodies;

    2. Provide approval from the management structures for establishing business relations;

    3. Take adequate measures to establish the source of funds that are involved in the business relation or transaction; and

    4. Conduct ongoing enhanced control of the business relation.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

No information available.


ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

No information available.


WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

The situations where a lawyer is under an obligation to report suspicious transactions are contained in the relevant articles of the AML law, which are detailed below:

Article 5

The situations where a lawyer is under an obligation to report suspicious transactions are contained in the relevant articles of the AML law, which are detailed below:

  1. Entities shall be the persons who have the obligation of undertaking measures and actions for prevention and detection of money laundering and financing terrorism provided for in this Law (hereinafter referred to as: entities), such as the following:

  2. Legal and natural persons performing the following activities:

    1. Activity of trade in real estate;

    2. Audit and accounting;

    3. Notary public, attorney and other legal services relating to: sale and purchase of real estate or companies, trading in and management with money and securities, opening and managing bank accounts, safe-deposit boxes and other accounts, establishing or taking part in the management or operation of the legal entities, representing clients in financial transactions and trade in real estate;

    4. Activity of sale of excise commodities; and

    5. Other similar activities of acquiring property and other forms of holding.

Article 29

  1. The entities shall be bound to submit to the Office the data collected, the Information and the documents regarding the transactions carried out, in the following cases:

    1. When there is suspicion that the client, transaction or the beneficial owner are
      related to money laundering or financing terrorism;

    2. In case of cash transaction in the amount of EUR 15,000 in denar counter value
      or more, and

    3. In case of several connected cash transactions in the amount of EUR 15,000 in
      denar counter-value or more.

  2. The entities shall be bound to immediately inform the Office on the suspicion referred to in paragraph (1) item a) of this Article, and submit the data, information and documents to the Office within 24 hours from the notification of the Office at the latest in the form of a report.

Article 31

  1. The reports regarding the transactions referred to in Article 29 of this Law shall be submitted to the Office in electronic form or via telecommunication means (telephone and fax), and in case this is not a possible in other written forms.

Article 41

The responsibilities arising from this Law shall not refer to the lawyers in the cases where they perform the function of defending and representing in a court procedure.

Exemption from the Responsibility for Notification and Postponement.

Article 47

  1. Bar chambers and notary chambers, i.e. other professional associations of auditors, accountants and other persons independently performing legal and financial affairs, within their competences shall establish commissions for performing supervision of the application of the provisions of this Law by their members;

  2. The members of the commissions referred to in paragraph (1) of this Article shall be appointed for a term of four years without the right to re-election;

  3. The chambers i.e. associations shall notify the Office of the appointments and structure of the commissions. 

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

No information available.


DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

No information available.


ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

No information available.


IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Yes. According to Article 28 of the AML Law neither entities nor their employees should inform the client or a third party that a STR has been made.


DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

No information available.


ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

Yes. Ongoing monitoring of the business relation must be done pursuant to Article 9 (1) (d) of the AML Law.

It states that the CDD procedure should include conducting ongoing monitoring of the business relationship including detailed scrutiny of transactions undertaken within the frames of that relationship in order to ensure that the transactions are being conducted in compliance with the client’s intention, the business and risk profile and the client’s financial standing, as well as ensuring that the data on the client are kept up-to-date.


DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

Not applicable.


HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

According to the Moneyval Report, the Monitoring Commission conducted four observations and no infringements of the application of legal obligations have been reported. 


HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

Yes. The general consensus of the Moneyval Mutual Evaluation Report (21st September 2009) is that Macedonia needs to outline the duties of financial institutions and DNFBPs as well as dividing such entities. In addition, more guidance is required on terrorist financing and anti-money laundering.

This conclusion applies to most of the recommendations included in the report.  



Information provided by:

P.Patricia Adams
Commercial Law Intern
International Bar Association
10th. Floor, 1 Stephen Street
London, W1T 1AT
United Kingdom
Gonzalo.Guzman@int-bar.org

Tel. +44 (0) 2076916868
Fax +44 (0) 2076916544
www.ibanet.org  
www.anti-moneylaundering.org