BANKS – THE GATEKEEPERS IN THE FIGHTA GAINST MONEY LAUNDERING IN THE REPUBLIC OF NORTH MACEDONIA

Abstract

Purpose: The purpose of this paper is to gain knowledge about the preventive role of banks against money laundering through the analysis of the laws in the Republic of North Macedonia, as well as the legal repressiveness towards banks and bank officials for disobeying the laws. Banks are financial entities that are covered by the first pillar of the System for the Prevention of Money Laundering and Financing of Terrorism in the Republic of North Macedonia. In the Republic of North Macedonia, money laundering is a criminal activity incriminated by the crime “Money Laundering and Other Proceeds of a Criminal Crime”, and with the same crime as qualifying elements, the status properties of officials and responsible persons – the bank officials - are provided, and criminal liability is also provided for the banks themselves as legal entities. This paper analyzes the efficiency and effectiveness of banks in the process of identifying suspicious customers and suspicious and related transactions. At the same time, a special review emphasizes the cooperation between the banks and the Financial Intelligence Unit. The research period is 2017–2021, and the subject of analysis are reports of the Financial Intelligence Unit of the Republic of North Macedonia. Design/Methodology/Approach: The paper is structured into several chapters, including the Introduction part, the Analysis of the role of banks in preventing money laundering – situation and trends in the Republic of North Macedonia, Conclusions, and References. The paper uses a method of comparative analysis and a method of content analysis. Findings: Banks as financial institutions have a very important role in detecting suspicious customers and suspicious transactions related to money laundering, and therefore their actions for identifying suspicious customers and suspicious transactions are defined by law. For two decades, the Republic of North Macedonia has been working on harmonizing the national anti-money laundering and counter-financing of terrorism legislation with international standards, and visible results are being achieved, which is also confirmed by the latest Moneyval report. The paper also analyzes the procedures for the freezing of financial assets on bank accounts owned by legal and natural persons. According to the national AML/CFT law, the decision to freeze the bank accounts is made by the competent court following a previously received request from a competent public prosecutor. Initially, the request of the competent public prosecutor is based on a previously received proposal from the Financial Intelligence Unit, but also on a request for international legal assistance, which in practice is the result of established international cooperation. Originality/Value: The analysis included in this paper is based on the national laws that regulate the preventive role of banks in the national AML/CFT system. At the same time, the authors indicate the weaknesses of the banks that appear during the implementation of measures and actions to prevent money laundering and the financing of terrorism. According to the authors, the degree of prevention is directly reflected in the degree of repression. Or, in other words, a greater degree of prevention indicates a lesser degree of repression. Keywords: money laundering, banks, financial assets, prevention and repression.