Prevention of legalisation of proceeds of criminal activity and financing of terrorism

Integrated supervision over all participants of the financial market, which is carried out by the National Bank of Slovakia, is currently risk-based and thus, one of its main goals is to promote the elimination of specific risks in supervised entities. It is therefore quite substantiated that it is aimed at the prevention of legalization of criminal proceeds and of terrorist financing (or at enforcing the countermeasures against money laundering and terrorist financing).

The basic legal framework consists first of all of the Act No 297/2008 Coll. on the Prevention of Legalization of Proceeds of Criminal Activity and Terrorist Financing and on Amendments and supplements to Certain Acts as amended by the acts No. 445/2008 and No. 186/2009, which determines for the National Bank of Slovakia in the conduct of supervision over the financial market its powers and obligations in this area – particularly in provisions of Section 29 and 31. Based on mentioned provisions the National Bank of Slovakia actively co-operates by enforcement of the preventive law with the Slovak FIU, which is located under the umbrella of the Ministry of Interior.

This specific intendment of supervisory activities is supported by one of the crucial goals of the National Bank of Slovakia in the process of carrying out its financial market supervisory tasks – to foster the stability of the financial system as a whole, as well as to promote safe and sound functioning of financial market in order to maintain its credibility. Considering the EU membership of the Slovak Republic, it is of utmost importance to pay adequate attention to protection against legalization of criminal proceeds and terrorist financing because dirty money flows can harm not only the stability and reputation of the Slovak financial sector but also the common European market can be endangered by that.

Terrorism and its support puts human beings lives at stake and by that undermines the basis of European Community. Criminals are trying to misuse financial sector institutions for money-laundering purposes. Financing of terrorism can be carried out also via financial institutions, but that is not the only way, and for the purposes of terrorism financing legal money may be used as well.