On 30 September 2021, the Government of the Republic of Serbia passed the conclusion adopting the Money Laundering and Terrorist Financing Risk Assessment (ML/TF Risk Assessment), the Money Laundering and Terrorist Financing Risk Assessment in the Digital Assets Sector and the Weapons of Mass Destruction Proliferation Financing Risk Assessment. The Assessments cover a three-year period, from 1 January 2018 to 31 December 2020.
In light of the relevance of digital assets and the financing of the proliferation of weapons of mass destruction (WMD), the risks to which the system of the Republic of Serbia is exposed in these areas have been analysed for the first time.
The above documents are the result of cooperation of competent government bodies and representatives of the private sector (financial and non-financial). They rely on the methodologies of the World Bank, Council of Europe and Royal United Services Institute (RUSI) as the UK’s leading defence and security think tank. Also used was the methodology based on professional risk assessment experiences.
The NBS took part in assessing the vulnerability of the part of the financial sector under its supervision – banks, insurance undertakings, financial lessors, voluntary pension funds, payment institutions, electronic money institutions and exchange dealers. It also took part in drafting the ML/TF Risk Assessment in the Digital Assets Sector, and gave its contribution, under its remit, to drafting the Terrorist Financing Risk Assessment and the WMD Proliferation Financing Risk Assessment.
The vulnerability assessment covered, among other things: the comprehensiveness of the legal framework, effectiveness of supervisory procedures and practice, 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. The assessment of the ML/TF risk in the digital assets sector included, among other things, the use of digital assets in the Republic of Serbia, comprehensiveness of the legal framework, money laundering risk through prior criminal offence and the terrorist financing risk in the sector of digital assets and the digital assets service provider, the ML/TF risk according to the profile of the client/consumer in this sector, the ML/TF risk based on links between the digital assets sector with other economic sectors, and the ML/TF risk according to the type of digital assets and services of digital assets service providers.
The objective of risk assessments 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 are an essential part of the implementation and development of the national anti-money laundering and terrorist financing system.
Based on 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, Nos 13/2018, 103/2018, 57/2019 and 137/2020), the obligors of the Law on the Prevention of Money Laundering and the Financing of Terrorism (RS Official Gazette, Nos 113/2017, 91/2019 and 153/2020) must prepare and update their ML/TF risk analyses in accordance with the Law, Guidelines and national ML/TF risk assessment.
In cooperation with several supervisory authorities and to ensure harmonised implementation of the Law by supervised entities, the following documents were adopted:
- Guidelines to Determine the Beneficial Owner of the Party and Guidelines to Record the Beneficial Owner of the Registered Entity in the Central Records
- Instruction for Application of Provisions of the Law on the Freezing of Assets with the Aim of Preventing Terrorism and Proliferation of Weapons of Mass Destruction Relating to the Prevention of Terrorism Financing
- Instruction for Application of Provisions of the Law on the Freezing of Assets with the Aim of Preventing Terrorism and Proliferation of Weapons of Mass Destruction Relating to the Prevention of Financing of Proliferation of Weapons of Mass Destruction
A search engine was also launched, enabling the search of designated persons subject to the United States sanctions.
All interested natural and legal persons can check in a quick and simple manner whether they have contacts or business cooperation with the designated persons so as to timely apply measures and actions prescribed by the Law on the Freezing of Assets with the Aim of Preventing Terrorism and Proliferation of Weapons of Mass Destruction (RS Official Gazette, Nos 29/2015, 113/2017 and 41/2018).