Prevention of money laundering
Money or assets that were obtained through the committing of crimes (e.g. tax evasion, abuse of office, fraud and counterfeiting) are referred to as ‘dirty money’.
Money is ‘laundered’ when its real source is concealed and it has obtained all the characteristics of legitimately obtained assets. The final objective of money laundering is to incorporate ‘laundered’ money or assets into ordinary financial flows that are an integral part of lawful business activities, or to reinvest them in criminal activity.
The obliged persons who must implement measures to detect and prevent money laundering and terrorist financing are set out in Article 4 of the Act on the Prevention of Money Laundering and Terrorist Financing (APMLTF-1).
Tasks and obligations of obliged persons
Article 12 of the Act on the Prevention of Money Laundering and Terrorist Financing (APMLTF-1) stipulates that obliged persons must, in the performance of their activities, carry out the tasks set out in the APMLTF-1 and in regulations adopted on the basis thereof for the purpose of detecting and preventing money laundering and terrorist financing. Those tasks are as follows:
Drafting of an assessment of the risk of money laundering and terrorist financing
The risk of money laundering and terrorist financing is the risk that a customer will use the financial system for money laundering or terrorist financing, or that a certain business relationship, transaction, product, service or distribution channel, taking into account the geographical risk factor (country or geographical region), will be used directly or indirectly for money laundering or terrorist financing (Article 13 of the APMLTF-1).
In order for an obliged person to prevent excessive exposure to the effects of money laundering and terrorist financing, they must draw up a risk assessment that define the level of exposure to a specific customer, business relationship, transaction, product, service, etc., in accordance with the guidelines issued by the competent supervisory body referred to in Article 139 of the APMLTF-1, taking into account the report on the findings of national and supranational risk assessments, and internal risk assessments.
It should be emphasised that the drafting of a risk assessment is a necessary precondition for implementing prescribed measures in connection with customer due diligence, as the type of customer due diligence that an obliged person will perform in accordance with the APMLTF-1 (standard, enhanced or simplified due diligence) depends on the classification of a customer, business relationship, service or transaction to a risk category.
Establishment of policies, controls and procedures for the effective mitigation and management of risks in connection with money laundering and terrorist financing
For the effective mitigation and management of risks in connection with money laundering and terrorist financing identified based on Articles 13 and 14 of the APMLTF-1, an obliged person should establish effective policies, controls and procedures that are proportionate to its activities and size (e.g. the size and composition of the obliged person, the scale and nature of its operations, the types of customers with which the obliged person does business and the types of products that the obliged person offers; first paragraph of Article 15 of the APMLTF-1).
The policies, controls and procedures referred to in the previous paragraph are as follows (second paragraph of Article 15 of the APMLTF-1):
1. the development of internal policies, controls and procedures that relate to:
- risk management models,
- customer due diligence,
- the reporting of data to the Office,
- data protection and retention, and the management of records,
- internal controls over the performance of tasks relating to the detection and prevention of money laundering and terrorist financing,
- regulatory compliance, and
- secure recruitment and, where necessary, security vetting of employees in accordance with the act governing classified information; and
2. the establishment of an independent internal audit department to verify the internal policies, controls and procedures referred to in the previous point, if the obliged person is a medium-size or large enterprise in accordance with the act governing companies.
Customer due diligence
An obliged person must perform customer due diligence in the following cases (first paragraph of Article 17 of the APMLTF-1):
- when entering into a business relationship with a customer;
- when executing any transaction in the amount of EUR 15,000 or more, irrespective of whether executed individually or in several apparently linked transactions;
- in connection with organisers and concession holders who organise games of chance, in respect of the payment of winnings, the receipt of bets or both, involving any transaction in the amount of EUR 2,000 or more, irrespective of whether executed individually or in several apparently linked transactions;
- whenever there is doubtas to the veracity and adequacy of previously obtained data about a customer or its beneficial owner; and
- whenever there exist reasons to suspectmoney laundering or terrorist financing with respect to a transaction, customer, funds or assets, irrespective of the value of the transaction.
Unless stipulated otherwise by the APMLTF-1, customer due diligence should include the following measures (first paragraph of Article 16 of the APMLTF-1):
- establishing and verifying a customer’sidentity on the basis of credible, independent and objective sources;
- determining the beneficial owner of a customer;
- obtaining data about the purpose and intended nature of a business relationship or transaction, and other information pursuant to the APMLTF-1; and
- conducting regularmonitoring of the business activities that a customer pursues via an obliged person.
The set of data that obliged persons must obtain in the scope of customer due diligence is set out in Article 48 of the APMLTF-1.
The following must also be stated in connection with customer due diligence:
Occasional transactions - The obligation to perform customer due diligence also applies in the case of an occasional transaction that involves the transfer of funds in excess of EUR 1,000. An occasional transaction is deemed such if it is executed by a customer who has not entered into a business relationship with an obliged person (Article 18 of the APMLTF-1).
Politically exposed persons - Pursuant to Article 61 of the APMLTF-1, an obliged person must establish an adequate risk management system that includes procedures to determine whether a customer or its statutory representative or authorised person is a politically exposed person. Those procedures, which are based on the risk assessment referred to in Article 13 of the APMLTF-1, are defined by an obliged person in an internal act, taking into account the guidelines of the competent supervisory authority referred to in Article 139 of the APMLTF-1.
Reporting the prescribed and required data and sending documentation to the Office
Obligation to report cash transactions and transfers to high-risk countries (Article 68 of the APMLTF-1
An obliged person must report data regarding every cash transaction that exceeds EUR 15,000 to the Office, immediately after a transaction has been executed or within three business days following execution of a transaction.
The obliged persons referred to in points 1, 2, 3, 4 and 18 of the first paragraph of Article 4 of the APMLTF-1, must report to the Office data regarding every transaction that exceeds EUR 15,000 and that at a customer’s request is made to the bank accounts of the following:
- legal and natural persons in countries included on the list of high-risk third countries with strategic deficiencies where appropriate measures to prevent money laundering and terrorist financing do not apply or there is an increased likelihood of money laundering and terrorist financing (points 1 and 2 of the third paragraph of Article 50 of the APMLTF-1); and
- legal and natural persons with a registered office, or temporary or permanent residence in countries included on the list of high-risk third countries with strategic deficiencies where appropriate measures to prevent and detect money laundering and terrorist financing do not apply, or where there is an increased likelihood of money laundering and terrorist financing (points 1 and 2 of the third paragraph of Article 50 of the APMLTF-1), immediately after a transaction has been executed or within three business days following execution of a transaction.
The obligation to report cash transactions and transactions to high-risk countries does not apply to audit firms, independent auditors, and legal and natural persons who provide accounting or tax advisory services.
Obligation to report suspicious transactions (Article 69 of the APMLTF-1)
A suspicious transaction is any intended or executed transaction in connection with which an obliged person knows or has reason to suspect that assets or funds are the product of crimes that could be precursor acts for the purpose of money laundering or terrorist financing, or that according to their characteristics are compatible with indicators for identifying suspicious transactions that lead to reasons to suspect money laundering or terrorist financing.
Obliged persons must report the data set out in the first paragraph of Article 137 of the APMLTF-1and submit related documentation to the Office whenever in connection with a transaction, person, assets or funds there are reasons to suspect money laundering or terrorist financing, before a transaction is executed, and must indicate in that report the deadline by which the transaction in question is to be executed. Reports on suspicious transactions must be sent to the Office by secure electronic means, and exceptionally by telephone. In the case of the latter, reports must also be sent to the Office by the next business day via electronic means.
The obligation to report suspicious transactions also applies to intended transactions, regardless of whether they are subsequently executed or not.
Audit firms, independent auditors, and legal and natural persons who provide accounting or tax advisory services are obliged to report any cases of a customer seeking advice regarding money laundering or terrorist financing, immediately or within three business days following the receipt of such a request.
Appointment of a compliance officer and deputy officers, and ensuring the requisite work conditions
Obliged persons must appoint an officer and one or more deputies for the individual tasks of detecting and preventing money laundering and terrorist financing. If an obliged person has less than four employees, they are not obliged to appoint an officer and perform the internal controls under this act (Article 76 of the Z APMLTF-1).
In particular, an officer performs the following tasks (Article 78 of the ZPPDFT-1):
- the establishment, functioning and development of a system for detecting and preventing money laundering and terrorist financing at an obliged person;
- the accurate and timely reporting of data to the Office in accordance with the APMLTF-1and regulations issued on the basis thereof;
- participation in the drafting of and amendments to operative procedures, and the drafting of provisions in an obliged person’s internal acts relating to the detection and prevention of money laundering and terrorist financing;
- participation in the development of guidelines for carrying out controls in connection with the detection and prevention of money laundering and terrorist financing;
- monitoring and coordinating activities in the area of detecting and preventing money laundering and terrorist financing;
- participation in the establishment and development of information support for the implementation of activities related to the detection and prevention of money laundering and terrorist financing;
- putting forward initiatives and proposals to the management body for improvements to the system for detecting and preventing money laundering and terrorist financing; and
- participation in the development of professional education and training programmes for an obliged person’s employees that relate to the detection and prevention of money laundering and terrorist financing.
Ensuring the regular professional training of employees and the performance of regular internal controls over the performance of tasks pursuant to the APMLTF-1
Regular professional training
Pursuant to Article 80 of the APMLTF-1, obliged persons must organise regular professional training for all employees who carry out tasks in the detection and prevention of money laundering and terrorist financing. To that end, an annual programme of professional training must be drawn up for the current year by the end of March.
Organising regular education and training relates to familiarisation with the provisions of the APMLTF-1, and rules and internal acts issued on the basis thereof, through professional literature on the detection and prevention of money laundering and terrorist financing, and through lists of indicators for identifying customers and transactions for which there exist reasons to suspect money laundering or terrorist financing.
Regular internal controls
Pursuant to Article 81 of the APMLTF-1, obliged persons must ensure regular internal controls over the performance of the tasks of detecting and preventing money laundering and terrorist financing according to the APMLTF-1.
Drafting a list of indicators for identifying customers and transactions in connection with which there are grounds to suspect money laundering or terrorist financing
Pursuant to Article 85 of the APMLTF-1, obliged persons must draft a list of indicators for identifying customers and transactions in connection with which there are grounds to suspect money laundering or terrorist financing. In compiling a list of indicators, obliged persons should take into account, in particular, the complexity and size of a transaction, unusual composition, value, or link with transactions with no clear economically or legally justified purpose, or a transaction that is not in line with or is disproportionate to the typical or expected operations of a customer, and other circumstances related to the customer’s status or other characteristics.
Ensuring the protection and retention of data and the management of records prescribed under the APMLTF-1
The data protection that obliged persons must ensure is governed in detail by Articles 122 to 128 of the APMLTF-1, inclusive.
Obliged persons must retain the data and accompanying documentation that they have collected based on the provisions of the APMLTF-1for ten years after the termination of a business relationship, the execution of a transaction, a customer’s arrival at a casino or mini casino, or a customer’s use of a safe, unless another law stipulates a longer retention period. Data and accompanying documentation regarding an officer and their deputy, the professional training of employees, the performance of internal controls and risk management referred to in Articles 13, 76, 77 and 80 of the APMLTF-1must be retained for at least four years (Article 129 of the APMLTF-1).
Pursuant to Article 136 of the APMLTF-1, obliged persons must maintain the following records of data:
- records of data regarding customers, business relationships and transactions as specified in Articles 17 and 18 of the APMLTF-1; and
- records of data reported to the Office as specified in Articles 68 and 69 of the ZPPDFT-1.
Pursuant to Article 138 of the APMLTF-1, obliged persons must also maintain the following separate records:
- records of access by supervisory bodies, as specified in Article 139 of the ZPPDFT-1, to the data, information and documentation referred to in the first paragraph of Article 122 of the APMLTF-1 (the set of data that records must comprise is set out in the second paragraph of Article 138 of the APMLTF-1).
Obliged persons must inform the Office in writing of each instance of access to the data, information and documentation set out in the first paragraph of Article 122 of the APMLTF-1by supervisory authorities, as specified in Article 139 of the APMLTF-1, within three business days following the viewing thereof.
Implementation of policies and procedures at the group level, and measures to detect and prevent money laundering and terrorist financing in own branches and at subsidiaries under majority ownership in third countries
Obliged persons that are part of a group implement the latter’s policies and procedures relating to measures for detecting and preventing money laundering and terrorist financing, as set out in the APMLTF-1, including data protection policies and procedures, and exchanges of information within a group in order to prevent money laundering and terrorist financing. A group’s policies and procedures are implemented at branches and subsidiaries under the majority ownership of obliged persons with a registered office in Member States and third countries. The exchange of information within a group is permitted, including the exchange of information regarding the suspicious transactions set out in Article 69 of the APMLTF-1, unless the Office expressly opposes the exchange of information regarding the suspicious transactions. Before exporting personal data to third countries, an obliged person must obtain the written assurance of a data recipient registered in a third country that the latter ensures the same level of personal data protection in its operations as the obliged person, and that the third country in question ensures the appropriate level of personal data protection (Article 71 of the APMLTF-1).
Performance of other tasks and duties pursuant to the provisions of the APMLTF-1 and regulations adopted on the basis thereof
The tasks of individual obliged persons are governed in detail in the guidelines.
The issue of the expansion of organised and financial crime in connection with money laundering is becoming increasingly relevant, while the risk of various forms of terrorist financing has been increasing in recent years. Money laundering poses a serious threat to the stability and integrity of the operations of financial institutions, endangers the stability and reputation of a country’s financial sector, threatens the internal market and the competitiveness thereof, and above all leads to a long-term loss of confidence in the democratic institutions of modern society.
The aim of criminal activities is to generate unlawful material benefits. The crime of money laundering is committed by a person who, with the knowledge that money or assets were obtained through a criminal act, accepts, exchanges, holds, disposes of or uses such money or assets in a commercial activity or in some other way, as set out in the Act on the Prevention of Money Laundering and Terrorist Financing, to conceal or attempt to conceal the source of that money or assets through laundering activities (Article 245 of the Penal Code). Money is ‘laundered’ when its real source is no longer evident, and it has all the characteristics of legitimately obtained assets. The final objective of money laundering is to incorporate the laundered money or assets into the ordinary business flows that are an integral part of lawful business activities, or to reinvest them in criminal activity (existing or new).
According to the valid definition of the Financial Action Task Force (FATF), which functions under the auspices of the OECD, money laundering is the process of concealing illegal assets, and is carried out in three phases:
- the placement of assetsin a country’s financial system, e.g. the transfer of cash across a border, electronic transfers abroad, conversion into another currency (banks, exchange offices, casinos, post offices, etc.);
- the concealment of the source of money or layering includes financial operations abroad via various financial institutions, the use of offshore companies, fictitious transfers and contracts, smurfing, virtual borrowing, the use of safe deposit boxes, the purchase of payment instruments with cash, the smuggling of cash, double accounting, and the resale of real estate; and
- integration or the incorporation of funds into the economy, or reinvestment in criminal activity.
The process of concealing illegal funds
A specific typology of money laundering is spoken of when we identify a pattern or series of similar processes (methods) used to conceal the unlawful source of money or other assets, including various mechanisms, techniques and instruments:
- a money laundering mechanism is an environment or system in which money laundering activities are carried out in part or in full, and primarily comprises the following groups: financial institutions (banks, savings banks, brokerage firms and leasing companies), notaries, attorneys, natural persons, legal entities, i.e. companies (domestic and foreign companies, shell companies and offshore companies), and money transfer systems (e.g. Western Union and MoneyGram);
- a money laundering instrument is the carrier of value used for money laundering activity, such as cash, cheques, securities, real estate, vehicles and vessels, and companies; and
- a money laundering technique is the way in which money laundering activities are carried out, such as cash withdrawals and deposits, the electronic transfer of funds between bank accounts (e.g. wire transfers), the use of alternative systems for transferring funds, the cross-border transfer of cash, currency exchange and smurfing.
Typology of money laundering
The Office finds that the number of reported suspicious transactions and initiatives from state and supervisory bodies, as the basis for initiating the investigation of specific matters, has been rising steadily since 2005. Accordingly, the number of matters that the Office refers to the competent authorities for further investigation (e.g. the police, prosecutor’s office and tax administration) due to the suspicion of money laundering or other crimes accompanied by notification of suspicious transactions is also on the rise. In addition to daily operational analyses, the Office has long been analysing data from reports of suspicious transactions sent to the competent authorities and from other sources with the aim of identifying potential recurring patterns or series of similar methods used to conceal the illegal source of money or other assets, including various money laundering mechanisms, instruments and techniques. Given that the number of matters referred to the competent bodies is rising every year, the set of appropriate data for performing so-called strategic analyses is also expanding.
In addition to specific forms of money laundering, we have also identified certain money laundering typologies based on strategic analyses performed. The characteristics of those typologies are presented below:
- the use of natural persons for money laundering purposes;
- the use of shell companies for money laundering purposes;
- the use of offshore companies for money laundering purposes;
- the exchange of low-value banknotes for high-value banknotes;
- the use of money transfer systems;
- the use of loans for money laundering purposes; and
- the use of the bank accounts of companies and natural persons in connection with funds and companies from neighbouring countries
Use of natural persons for money laundering purposes
We have seen the use of natural persons as a typology of money laundering for many years, most frequently as the use of the bank accounts of natural persons. The use of the bank accounts of natural persons is frequently combined with other well-known money laundering typologies, in particular the use of the bank accounts of shell companies. The main characteristic of the aforementioned typology is that the personal accounts of natural persons are primarily used to receive funds and withdraw cash, and to make transfers to other accounts, where natural persons most frequently have nothing to do with such transactions, but instead lend their name and bank account, and thus facilitate the anonymity of the actual organisers of those activities. The given purpose of transfers to the accounts of natural persons is typically false and does not reflect the actual purpose of transactions. Natural persons can also be used to launder money without a bank account. This most frequently involves cases of so-called cash couriers, whose task is to transfer cash between different countries to conceal the trail of such funds.
In connection with the use of the bank accounts of natural persons, we have also identified, as another typology, the use of the bank accounts of natural persons in connection with the precursor crime of theft through computer hacking or the use of the bank accounts of persons who use online banking services. The perpetrators of such crimes are typically not present in Slovenia, as to commit such a crime, they only need a computer and access to the internet, which they use for the unauthorised placement of software on a victim’s computer in order to retrieve the passwords the latter uses to access online banking services. When the perpetrators obtain that information, they only need a third person (‘straw man’) who ‘lends’ them their bank account, to which a perpetrator transfers funds illegally obtained from a victim’s bank account. The third party then withdraws the illegally obtained funds in the form of cash or uses money transfer systems to transfer the money to the perpetrators of the crime of theft. In this way, a third party consciously or negligently launders money for unknown perpetrators, typically for a specified fee. The source of that money is precursor crimes of theft from bank accounts. Cases have also been identified in which the perpetrators of those crimes misled third parties into believing that they are executing a legal transaction through their accounts, although that was not the case.
Use of shell companies for money laundering purposes
We have been aware of the typology of money laundering through the use of the bank accounts of shell companies for several years. It is one of the two most frequently identified money laundering typologies in Slovenia. A shell company is most often used to launder money that derives from precursor commercial crimes, such as the abuse of office or trust in a commercial activity or tax evasion. Classic criminal acts are less frequently the precursor in such cases.
Shell companies are a key link in the perpetration of the precursor crimes of tax evasion in connection with value-added tax (VAT) and the subsequent crime of money laundering. These companies are referred to as missing traders, for which the equivalent term of shell company is used in Slovenia. Shell companies typically exist only on paper, as they have no moveable property or real estate. All they have are an identification (tax) number and bank account to which the recipients of invoices (that are usually fictitious) transfer money that is then withdrawn from an account in the form of cash. Shell companies are represented by fictitious directors (straw men) who are typically persons who do not actually perform the function of legal representative and do not conclude transactions at their own discretion but at the instruction of the organisers of illegal transactions. Fictitious directors are typically from the bottom of the social ladder with a criminal past, or non-residents.
Use of offshore companies for money laundering purposes
An offshore company is a non-resident company that may not perform a commercial activity in the jurisdiction in which it was established (Seychelles, Delaware, Virgin Islands, etc.). Published on our website is a list of countries that pose increased risks in connection with money laundering and terrorist financing. There is also a list of countries that the International Monetary Fund (IMF) has recognised as so-called offshore centres. The process of establishing an offshore company abroad is relatively simple, fast and inexpensive, and can be done via the internet. Characteristic of the majority of offshore companies is the fact that the names of directors and partners are not entered in any public document or register. The same is also true for information about beneficial owners, which represents a significant obstacle in the work of law enforcement bodies. Offshore companies and their bank accounts abroad or in Slovenia are often used to perpetrate different economic crimes and the crime of money laundering. Offshore companies and their bank accounts are most frequently used to transfer funds of unlawful origin through the use of electronic banking and the concealment of beneficial owners who dispose of those funds, and to make cash withdrawals from the bank accounts of those companies.
Exchange of low-value banknotes for high-value banknotes
This typology of money laundering is primarily used by the perpetrators of crimes where illicit funds derive from recurring illegal activities, such as the trafficking of illegal drugs, stolen goods and smuggled goods, prostitution, illegal gambling, etc. This typology involves the first step in money laundering when perpetrators, themselves or via third parties, deposit illegally obtained cash on bank accounts at several branches in the form of low value banknotes (10, 20 or 50 euros) and later withdraw that money in the form of high-value banknotes.
Use of money transfer systems
Money transfer systems (e.g. Western Union and MoneyGram) can be used effectively to transfer money of illegal origin to different people all over the world. Such systems facilitate the payment of money in one place and its withdrawal somewhere else in the world, where the person for whom the money is intended has the correct password and personal document to withdraw those funds. The anonymity of the recipient of such funds (through the use of falsified documents) and an extensive network of branch offices, which facilitates the transfer of money virtually across the entire world (in some countries, bypassing strict rules that apply to financial-banking systems), are the main factors in the spread of this typology of money laundering.
Use of loans for money laundering purposes
The most widely known money laundering technique involving loans is ‘loan back’. The owner of dirty money and a person they trust conclude a loan agreement in which it is falsely stated that the latter, as lender, lends its own money to the owner of the dirty money. In this way, the loan recipient receives a document (loan agreement) regarding the source of money (a loan in this case), when in fact the transaction involves dirty money that the person has ‘lent’ to themselves or their company. Most frequently, the lender of the illegal money is an offshore company with a concealed ownership and a bank account in a foreign country. Another frequently used technique is a ‘back-to-back loan’, which involves the raising of a legal bank loan that is secured through illegal assets in the form of a deposit at the same or another bank. The perpetrator thus receives from a bank a document – loan agreement – that they can use to prove that the source of money at their disposal is ‘clean’, when in fact the loan is secured by dirty money that was previously placed at a bank, i.e. in the financial-banking system.
Use of the bank accounts of companies and natural persons in connection with funds and companies from neighbouring countries
In terms of content, this typology includes the characteristics of the use of natural persons and the use of shell companies. We identified this typology before 2009, and have seen the frequency of its use rise since that year. Its main characteristic is the use of the bank accounts of legal entities or natural persons that are used primarily to receive funds from abroad (mostly from EU countries). Those funds are then withdrawn in the form of cash or transferred to various other bank accounts. Typically used in this typology of money laundering are shell companies that are established in Slovenia in cities and towns close to national borders, while the owners and representatives of those companies are usually non-residents and less frequently Slovenian citizens. Only two types of transactions are usually executed on the accounts of shell companies: inflows of funds from abroad (primarily from EU countries) that are followed very soon by outflows of funds abroad (typically to EU countries), or cash withdrawals by authorised representatives. Natural persons usually participate in such transactions as straw men used to conceal beneficial owners and the organisers for such activities.
In accordance with the provisions of the Act on the Prevention of Money Laundering and Terrorist Financing, the Office exchanges data with foreign authorities responsible for the prevention of money laundering and terrorist financing. We also serve on the committees of international bodies (e.g. the European Union and Council of Europe) that deal with the detection and prevention of money laundering and terrorist financing, and participate in the evaluation of Slovenia by MONEYVAL and in the drafting and implementation of action plans.
MONEYVAL and FATF
MONEYVAL is the Council of Europe’s special Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, whose members include the Republic of Slovenia. MONEYVAL carries out periodic evaluations of its Member States. The basis of those evaluations are the standards of the FATF (Financial Action Task Force) for the prevention of money laundering and terrorist financing and the associated methodology. The fifth round of the evaluation of the Republic of Slovenia was carried out in 2016. The report on the evaluation of Slovenia was adopted at the 53rd plenary session of MONEYVAL in May 2017.
Council of Europe Convention no. 198 on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism
The Office has certain responsibilities based on Council of Europe Convention no. 198 on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (Warsaw Convention), which entered into force in 1 August 2010. Under that convention, the Office is the central body that handles all requests relating to money laundering, and the detection, seizure and confiscation of material benefits obtained through the crimes of money laundering and terrorist financing.
International Egmont Group
The Office is a founding member of the international Egmont Group, established in 1995, which brings together similar bodies (Financial Intelligence Units or FIUs) that are involved in the prevention and detection of money laundering and, in recent years, the prevention and detection of terrorist financing. The Egmont Group, which was transformed from an informal to a formal community in 2008, comprised 159 offices from around the world at the end of November 2018.
Exchange of data with related bodies
The Office may exchange data with similar bodies through the special Egmont Secure Web (ESW) computer network, which is only accessible by members of the Egmont Group. The administrator of the aforementioned network is the US Financial Crimes Enforcement Network (FinCEN). Data can also be exchanged with similar bodies via the FIU.net computer network, which only brings together the offices of EU Member States.
Memorandum of understanding on data exchange
The Office signed a bilateral memorandum of understanding on data exchange with 50 offices from the following countries, until 10 December 2020, inclusive: United States of America, Belgium, Italy, Croatia, Czech Republic, Romania, Slovakia, Cyprus, Bulgaria, Latvia, Lithuania, North Macedonia, Monaco, Albania, Poland, Australia, Ukraine, Serbia, Estonia, Israel, Russia, Montenegro, Georgia, Canada, Chile, Bosnia and Herzegovina, San Marino, the Dutch Antilles, Moldova, Malta, Kosovo, Aruba, Honduras, Iran, Mongolia, Saudi Arabia, Sri Lanka, the Vatican, Japan, Panama, Liechtenstein, Saint Marten, China, Norway, United Kingdom, Portugal, Greece, Maldives, Guatemala and South Africa.
Supranational and national risk assessment
- Supranational risk assessment - The European Commission drafted a supranational risk assessment report in connection with the risks of money laundering and terrorist financing that affect the internal market and that concern cross-border activities. The risks of money laundering and terrorist financing that the EU could face were analysed in that report, while the comprehensive handling of those risks was also proposed.
- National risk assessment - Based on the first recommendation of the FATF regarding the prevention of money laundering and terrorist financing, countries must implement a national risk assessment. Based on an analysis of several sources of data, they must define areas of increased risk for money laundering and terrorist financing, verify whether their system for preventing money laundering and terrorist financing take sufficient account of that risk, and demand that financial and non-financial institutions and independent non-financial activities and professions identify and assess risk, and define measures for the mitigation thereof.
Pursuant to the first paragraph of Article 8 of the APMLTF-1, the Republic of Slovenia must carry out a national risk assessment for money laundering and terrorist financing, and update that assessment at a minimum every four years.