Moldova

Last updated: 18/08/2014


CENTRAL AUTHORITY FOR REPORTING

The National Anticorruption Centre (the “NAC”) is the successor of the Centre for Combatting Economic Crimes and Corruption. It is a central administrative authority with territorial subdivisions. The NAC is in charge of:

  • Prevention, detection, and investigation of corruption contraventions and crimes, as well as other corruption-related contraventions and crimes;
  • Preventing and combatting money laundering and terrorism financing activities;
  • Conducting anti-corruption expertise of draft legislative and normative acts;
  • Conducting corruption risk assessment in public authorities and institutions.
     

Insofar as AML/CFT activities are concerned, the NAC is responsible for the collection, analysis and processing of information on reported suspected transactions and activities, carrying out the operative investigation measures and criminal proceedings and submission of investigated criminal files with the competent prosecutor office and the performance of the National Strategy of Preventing and Combatting Money Laundering and Terrorism Financing 2013-2017 (the “National Strategy”).

Concurrently, the NAC coordinates the activities of anti-money laundering supervisory authorities and cooperates with foreign or international organisations dealing with the prevention of money laundering. The duties of preventing and combatting money-laundering and terrorism financing activities (except criminal proceedings) are carried out by a specialised subdivision: the Centre for Prevention and Combatting of Money Laundering.


OTHER ANTI-MONEY LAUNDERING REGULATOR(S).

The Moldovan Law on Prevention and Combatting Money Laundering and Terrorism Financing Activities No. 190-XVI of 26 July 2007 (the “AML Law”) also provides supervisory functions to the following authorities:


These institutions are required to report all suspicious transactions to the NAC. Each aforementioned authority approves recommendations and guidelines for reporting entities under their control, as well as checks and monitors implementation and observance by reporting entities of AML legal requirements on collection, registration, keeping, identification, submission of information regarding the carried out transactions and fulfilment of appropriate measures and proceedings related to internal control.


ARE LAWYERS COVERED BY MONEY LAUNDERING LEGISLATION?

Yes, lawyers are covered by the AML Law and are expressly mentioned as reporting entities by Art. 4(1)(i). The term “lawyers” used by the AML Law refers to licensed attorneys-at-law (avocati) admitted to the Bar Association; it does not include corporate or self-employed lawyers who do not hold such a licence.

The AML Law applies to lawyers when they prepare, carry out or execute on behalf of natural or legal persons transactions relating to:

  • Purchasing and selling of real estate;
  • Management of affairs of natural or legal persons;
  • Creation, operation and management of legal entities.
     

The above applies in all cases, except when asserting the legal position of a client or performing the responsibility of defending or representing that client in judiciary proceedings or in connection with such proceedings.


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

Besides the AML Law, the following regulations also refer to AML:

  • NAC Order No. 118 dated 20 November 2007 on the approval of the Guidelines of suspected transactions and activities falling within the Law on prevention and combatting of money-laundering and terrorism financing
     

The above regulations are applicable to lawyers as well.
 

In addition, the following laws also contain provisions regarding AML:


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

Visiting lawyers are not deemed as reporting entities according to the AML Law because theydo not fall under the term “lawyers” provided by AML Law.

Visiting lawyers are subject to criminal liability provided by the Moldovan Criminal Code for committing the crime mentioned by Art. 243 (Money-Laundering) on the territory of the Republic of Moldova or out of its realm, as provided by law.


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

The Guidelines of suspected transactions and activities falling under the Law on prevention and combatting of money laundering and terrorism financing (the “Guidelines”), approved by NAC Order No. 118 and dated 20 November 2007, provides the indexes ofsuspected transactions and activities.

The Guidelines are tailored according to the different type of reporting entities, as provided by the AML Law.  The Guidelines also list the criteria under which the suspicious character of the transactions carried out in the activity of independent professionals, including lawyers, shall be established. 

The NAC Order No.117 dated 20 November 2007 on reporting suspected transactions and activities falling under the law on prevention and combatting of money laundering and terrorism financing establishes the mandatory rules to be observed for filing and submission of the reporting forms and approves the reporting forms for each reporting entity, including lawyers (the form to be completed by the lawyers is provided by the Annex No. 11).


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

No. The Bar Association is not a supervisory authority under AML law and is not directly involved in supervising or enforcing compliance with anti-money laundering regulations by lawyers. Such responsibility is retained by the Ministry of Justice and the NAC.

However, the Bar Association may take disciplinary actions against lawyers for breaching any legal provisions regulating the legal profession, including their AML obligations.


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

Similarly to the other reporting entities, lawyers shall apply the Client Due Diligence measures, as follows:

1.     Before establishing business relations with the customer;

2.     When carrying out any occasional transaction with a value of at least MDL 50,000 (about EUR 2700) or electronic transaction with a value at least of MDL 15,000 (about EUR 810), whether the transaction is executed in a single operation or in several operations;

3.     When there is a suspicion of money laundering, regardless of any derogation, exemption or threshold. The suspicious character of the transaction is established individually by each lawyer taking into account the indexes of suspected transactions provided by the above NAC Order No. 118;

4.     When there are any doubts about the veracity or accuracy of previously obtained client identification data.

 

Lawyers shall apply client identification actions, as follows:

1.     Identify and verify the client’s identity on the basis of a client’s identification documents, data or information obtained from a reliable and independent source;

2.     Identify the beneficial owner and take adequate risk-based actions to verify the beneficial owner’s identity, so that the lawyer is satisfied that he/she knows who the beneficial owner is to understand the ownership and control structure of the client;

3.     Obtain information on the purpose and intended nature of the business relationship, on complex and unusual transactions to be carried out; and

4.     Conduct ongoing monitoring of the business relationship, including scrutiny of transactions undertaken throughout the course of that relationship, to ensure that the transactions being conducted are consistent with the information provided referring to the natural of legal entities, the business and risk profile, including, where the case, the source of funds and that any documents, data or information held are kept up-to-date.


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

Yes, the Republic of Moldova follows a risk-based approach to Client Due Diligence. Therefore, under Art.6 of the AML Law, lawyers (as well as all other reporting entities) shall apply Client Due Diligence measures on risk-based grounds depending on the type of client, business relationship, asset or transaction.

However, lawyers are under the obligation to give evidence to competent authorities that the extent of applicable measures is appropriate in connection with the risk of money-laundering. Those competent authorities include the Ministry of Justice and the NAC.

Moreover, lawyers shall establish appropriate policies and procedures, including risk assessment and risk management for preventing the performance of operations that may be related to money laundering. These policies and procedures shall assist lawyers in implementing a risk-based approach to Client Due Diligence.


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

Yes, the reporting entities (including lawyers) are under the obligation to apply enhanced Client Due Diligence measures in respect of the clients or situations which can present a higher risk of money laundering, as well as in other situations according to the requirements of supervisory authorities.

In addition to the Client Due Diligence standard measures, the reporting entities shall carry out the enhanced due diligence measures:

1.     When the client has not been personally present for identification purposes;

2.     In transactions and business relationships with politically exposed persons (PEPs);

3.     When the client receives/remits assets in/from the countries that do not have rules or have inadequate rules on anti-money laundering, or represent a high risk due to crime and corruption level;

4.     In transactions that might favour anonymity and wire transfers when there is no sufficient information on the sender’s identity.

 

The AML Law expressly requires the enhanced measures to be applied in certain higher risk situations, as follows:

1.     In a case where the client is not personally present for identification purposes, one or more of the following enhanced measures shall be applied: 

a)     Ensuring that the client’s identity is established through documents, data or information; 

b)    Additional verification and certification of the documents provided or confirmed by a financial institution; 

c)     Ensuring that the first payment of the operation is carried out through an account opened on behalf of the client with a financial institution.

 

2.     In transactions and business relationships with PEPs, the reporting entity shall ensure: 

a)     Appropriate risk-based procedures are in place to determine whether the client fits into this category; 

b)    Senior management approval for establishing business relationships with such client; 

c)     Adequate measures to establish the source of assets that are involved in such business relationship or transaction;

d)     Performance of enhanced ongoing monitoring of the business relationship.


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

Yes. The AML Law provides expressly for situations when the Client Due Diligence measures established by supervisory authorities are not applicable, namely in case of:

  1. performing service operations of public authorities through the State Treasury;
     
  2. procuring a life insurance policy, provided that the insurance premium or annual installments do not exceed MDL 15,000 (about EUR 810) or that the single installment insurance premium does not exceed MDL 30,000 (about EUR 1,620);
     
  3. subscribing to a pension fund policy pursuant to a labour agreement or position requirements, provided that such policy may not be redeemed beforehand or secure the issuance of a loan.

 

Notably, the situations listed above may appear only in respect of banking and non-banking financial institutions, and are not applicable to lawyers. 

The above exceptions shall not apply when there is a suspicion of money-laundering.


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

When carrying out standard Client Due Diligence, lawyers can use documents, data and information in respect of the client obtained from third party. The only requirement of AML Law is the source of such documents, data and information to be “real and independent”. 

In any case, the responsibility for compliance with the required Client Due Diligence measures lies not on the third parties, but on the lawyers as reporting entities.


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

Under the provisions of Article 8(1) of the AML Law, any lawyer is under the obligation to notify the NAC immediately of any transaction or activity which is under planning, in process, or executed that is suspected as money laundering. The suspicious character of transactions and activities shall be established by each lawyer pursuant to the indexes of suspected transactions provided by NAC Order No. 118. The suspicious transactions shall be reported to the NAC within 24 hours by filing a standard reporting form. 

Also, the lawyer shall report to the NAC any of the following activities or transactions, even when not deemed as suspicious:

  • within 10 days, on any activity or transaction in cash, with a value exceeding 100,000 (about EUR 5,400), executed by a single operation or several operations which appear to be connected;
  • until the 15th day of the succeeding month, on any activity or transaction carried out by wire transfer, with a value exceeding MDL 500,000 (about EUR 27,200). 
     

The lawyers are obliged to report suspicions of money laundering only in respect of the transactions or activities related to purchasing and selling of real estate; management of affairs of natural or legal persons; creation, operation and management of legal entities if such are planned, performed or executed by lawyer on behalf of his/her client.


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

No, in the situations when obliged to report (above), neither the attorney/client privilege nor the duty of confidentiality exempts a lawyer from reporting requirements.


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

Yes. Art. 15(3) of AML Law exempts reporting entities (including lawyers) from any type of liability (disciplinary, civil, criminal) for any good faith reporting of information to the competent authorities pursuant to AML Law provisions, even when such disclosure has caused damages.


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?

Yes, provided the lawyer has duly performed his/her reporting obligations, he/she shall be entitled to proceed with the execution of a transaction if he/she does not receive an appropriate decision from the NAC which suspends the transaction. The law omits to establish the period of time in which the NAC may oppose the transaction.

However, the lawyer must be careful when he/she proceeds with an execution in order to avoid being deemed to be an accomplice in money laundering. The lawyer shall refrain from execution of the transaction where the client’s/beneficial owner’s identification documents have not been submitted to the lawyer or data and information received during Client Due Diligence is not authentic or reliable.

The transaction may be suspended by NAC decision for a period of five working days (maximum) and when such term is not sufficient a prolongation may be decided by the general prosecutor’s office or court.


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

Tipping-off is expressly prohibited by Art. 8(6) of the AML Law, which states that reporting entities (including lawyers) shall not inform individuals and legal entities involved in a suspected transaction or activity or third parties upon providing information in this regard to the NAC.


DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

Before accepting a new client (establishing a new business relationship), the lawyer is under obligation to conduct appropriate Client Due Diligence measures in order to obtain satisfactory evidence of a client’s and/or a beneficial owner’s identity and background, including the nature and purpose of transaction/activity and the property and control structure of the client. 

The reporting entity (including lawyers) shall refrain from accepting a new client (establishing a new business relationship) if:

  1. The documents requested for identification of an individual or legal entity have not been submitted to the lawyer; or 
  2. The received data and information are deemed fraudulent or unreliable according to legislation in force and normative acts of supervisory authorities.

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

Yes, Client Due Diligence measures are applicable in respect of not only new clients, but also existing clients. Therefore, the lawyer should conduct ongoing monitoring of transactions and business relationships, including scrutiny of the transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with their knowledge of the client, its business and risk profile, including, where necessary, the source of funds and ensuring that the documents, data or information held are kept up-to-date. 

If, during ongoing monitoring, the lawyer has discovered that data and information received during Client Due Diligence procedures is fraudulent or unreliable, then he/she is under the obligation to terminate such transaction or business relationship or refrain from execution of the transaction. 

The lawyer shall keep record of all transactions and information and data in respect of their clients and clients’ documents during the entire period of the transaction/business relationship as well as for at least 5 years following termination.


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

Lawyers are obliged to establish appropriate policies and procedures on clients’ asserting, record keeping, internal control, risk assessment and management, compliance and communications management for preventing execution of transactions and activities that may be related to money laundering or terrorism financing. Also, lawyers shall appoint the individuals responsible for appropriate execution of AML Law and advise the NAC of the individual’s name and responsibilities. 

Lawyers shall refrain from committing the offence of money-laundering provided by Art. 243 of the Moldovan Criminal Code.


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

No such information is available.


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?

Moldova is not a member of the FATF, but it is a member of the Council of Europe Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL). The fourth round Mutual Evaluation Report on Moldova (the “Report”) was issued in 2011.

The Report noted a lack of awareness on the legal protection on AML matters for lawyers (Recommendation 16), as well as unclear supervisory powers and allocation of supervisory responsibilities for them (Recommendation 24).

Additionally, a further general issue was identified under Recommendation 15 of the Report, dealing with the lack of requirements for all reporting entities (lawyers included) to establish and maintain internal procedures, policies and controls in order to detect unusual and suspicious transactions and report them to the NAC.



Information provided by:

GLADEI & PARTNERS
63 Vlaicu Parcalab Street (SKY TOWER)
Chisinau, Moldova

tel. (37322) 240577
fax. (37322) 240541

email: office@gladei.md
www.gladei.md