Given that pursuant to its legal mandate the National Bank of Serbia acts both as a regulator and supervisor of a significant number of financial institutions in the Republic of Serbia, it has an important role in the AML/CFT system.
As the regulator in this area, the National Bank of Serbia prepares and takes part in the preparation of relevant laws and by-laws aimed at, inter alia, reducing the possibilities for money laundering and terrorism financing through financial institutions supervised by the National Bank of Serbia. Furthermore, the National Bank of Serbia:
- issues recommendations for the upgrade of the AML/CFT system at the national level;
- cooperates with the Administration for the Prevention of Money Laundering and other domestic institutions involved in AML/CFT activities;
- cooperates with international institutions in the AML/CFT field and participates in operations of international bodies and organisations dealing with AML/CFT issues, particularly MONEYVAL;
- keeps regular contacts with obliged entities subject to the National Bank of Serbia’s supervision under the Law;
- organises training in the AML/CFT field for National Bank of Serbia’s staff.
The National Bank of Serbia’s supervisory role starts with the issuance of operating licenses to supervised entities under its remit and their top management1. Apart from that, the National Bank of Serbia continuously monitors whether the supervised entities comply with the regulations and their internal acts. Among other things, it assesses the adequacy of the AML/CFT system as regards the implementation of the laws within the NBS’s remit, in order to prevent possible abuse. If it identifies irregularities in the supervisory procedure, the National Bank takes measures pursuant to its legal mandate.
The National Bank of Serbia’s supervisory role is defined by sectoral laws and Article 109 of the Law on the Prevention of Money Laundering and Financing of Terrorism that provide a platform for:
- bank supervision,
- supervision of voluntary pension fund management companies,
- supervision of financial leasing providers,
- supervision of insurance undertakings licensed to perform life insurance business and insurance brokerage undertakings when they perform life insurance brokerage, insurance agency undertakings and insurance agents with a licence to perform life insurance business, except for insurance agency undertakings and insurance agents for whose work the insurance undertaking is responsible according to law,
- supervision of electronic money institutions,
- supervision of payment institutions,
- supervision of a public postal operator with its head office in the Republic of Serbia, established in accordance with the law governing postal services – in the segment of provision of payment services,
- supervision of authorised exchange dealers and business entities carrying out exchange operations based on a separate law,
- supervision of persons providing the services of purchasing, selling or transferring virtual currencies or exchanging of such currencies for money or other property through internet platforms, devices in physical form or otherwise, or which intermediate in the provision of these services, custody wallet service providers, and from June 2021 providers of other services related to virtual currencies.
National Bank of Serbia’s AML/CFT cooperation with other institutions
The National Bank of Serbia cooperates with domestic and foreign institutions in the AML/CFT field. Such cooperation is generally regulated in more detail by supervisory memoranda of understanding (MoUs), covering different operational and technical activities (exchange of information and experience, staff training...).
One of the most important agreements is the MoU with the Administration for the Prevention of Money Laundering (financial intelligence unit of the Republic of Serbia), which regulates the sharing of operational information and facilitates the supervisory process.
1 The National Bank of Serbia issues licenses to banks, authorised exchange dealers, voluntary pension fund management companies, financial leasing providers, insurance undertakings, insurance agency/brokerage undertakings and insurance agents, electronic money institutions, payment institutions, and from June 2021 providers of services related to virtual currencies.