Role of banks as entity in the system for prevention of money laundering in the Macedonia

Abstract

Money laundering is a secondary crime of taking criminal action, in which offenders as a well organized and planned way legalized criminal money into the financial system. The threat of confiscation of criminal proceeds derived from any form of organized crime (drug trafficking, arms trafficking, corruption, fraud), puts the criminals in a position to find a another way to legalize criminal “dirty” money. The legalization process is very complex with numerous activities, with an order not to reveal the criminal origin of money, and thus avoid the danger of their confiscation. As criminals build a safe strategy for legalization of criminally acquired proceeds, that the state should build a system to protect the financial system from the entry of criminal money which will be threat for national and international economy and affecting the reliability of the financial system. Republic of Macedonia has actively joins on the fight against money laundering through harmonization of national legislation and acceptance of the recommendation of international legal acts, and active approach to building the institutional system to prevent of money laundering. The system for prevention of money laundering is a complex and composed process of three main pillars with aimed to build a strategy which include measures and activities to identify suspicious financial transactions, identification of criminals and providing evidence of the committed crime that resulted in criminal proceeds and security, freezing and confiscation through criminal money trail. The first pillar of the system consists of entities – a legal category of natural persons and legal entities performing legal or financial services which have a legal obligation for their customer. analysis and identification of suspicious financial transactions and inform Financial Intelligence Unit for suspicious activities of their clients. While the third pillar is law enforcement bodies which includes public prosecution bodies, Ministry of Interior, Financial Police and etc. The System for prevention of money laundering functioned in two ways. First way is when the entities identifying suspicious transactions and inform Financial Intelligence Units, then delivered the data to law enforcement entities for the provision of evidence and prosecution of money launders, and the second way is when through detection of crime, and following the money. Banks have a legal obligation to undertake the following actions for detection of money laundering: customer due diligence, to follow certain transactions or activities, to collect, store and provide data for suspicious transactions and customers. The control of entry of criminal money is strengthened through legal provisions, their implementation. Most important is to recognition and identification of criminal money, their sources and of course taking legislative measures and action for submission of data on suspicious transactions of individuals and legal entities on domestic and foreign countries. In that way, banks should take appropriate measures and activities aimed at applying the correct legal decisions, and activities of education staff in order to recognize, identification “suspicious” customers, suspicious transactions, and reporting to the competent state bodies and institutions for financial intelligence and prosecution of perpetrators of crimes for acts arising from crime and money laundering.