New AML/CTF report
The Money Laundering Prevention and Combating Service published its Report on the National Risk Assessment of Money Laundering and Terrorist Financing. One of the chapters is dedicated to analysing the use of non-profit organisations to finance terrorism. The main conclusion is that there are no indications of terrorist financing associated with the non-profit sector. Also, the reports’ authors note the difficulty to identify an exhaustive list of categories of national non-profit organisations falling under the FATF definition. Yet, it highlights some vulnerabilities of the non-profit sector, such as:
- significant use of cash in the performance of financial activities;
- lack of adequate financial and / or accounting records;
- vague accounting of expenses in accordance with legal provisions;
- inadequate accounting of donations and membership fees as considerable sources of income;
- lack of rigorous control by the responsible authorities over the financial activity of non-profit organisations;
- lack of accurate data on the number of active non-profit organisations and their financial activity;
- etc.
The report shows that out of 13,850 registered organisations a total of 5,592 are financially active. On the other hand, it confirms that the risk for them to be potentially used to finance terrorism is very low (only 10 religious non-profit organisations were singled out as ones with increased potential to be abused to finance terrorism, based on the identified risk criteria). However, the report does not identify any cases where non-profits have been used for the purpose of terrorist financing.
Despite the finding that identified risks and vulnerabilities do not pose a significant danger to CSOs being exploited for the purpose of financing terrorism or other terrorist-related activities, the Money Laundering Prevention and Combating Service provides a list of recommendations in the report. Some of these also call for modifications in the legal framework for CSOs:
- Promote the risk-based approach and improve the legal framework for the non-profit sector in order to prevent and combat money laundering and terrorist financing;
- Limit the use of cash transactions in non-profits’ activity;
- Increase the record of data on financial activities performed by non-profits;
- Increase the financial transparency of non-profit organisations and strengthen state supervision in this regard;
- Increase the transparency of data on the actual beneficiaries of non-profit organisations;
- Promote a culture of security and increase the involvement of the non-profit sector in prevention policies in the segment of preventing and combating money laundering and terrorist financing.
The implementation of all these recommendations for the whole civil society sector will only bring unnecessary and burdensome requirements for CSOs and affect their work negatively.
Limitations to the freedom of expression in context of the war on Ukraine
The Parliament adopted in the first reading the draft law 123/2022 with amendments to several laws including the Law of Freedom of Expression, Law on Security and Information Service, Penal Code, and Contravention Code. It introduces notions such as threats to information security, false information, information that affects the security of information space, and disinformation. It also provides that the prohibition of disinformation in the media information space is not considered censorship.
The law has been reviewed by an Expert advisory group, which includes CSO experts for improving media legislation. The Expert group was created by the Parliamentary Committee on mass-media. The main changes proposed by the draft law include the following:
- Cessation of the transmission of radio, TV, web stations of the state that carries out the military aggression.
- Criminal penalties for non-compliance with the provisions of the Commission for Exceptional Situations (during state of emergency) and for non-compliance with the decisions of the Supreme Council of Defence .
- Contravention sanctions for spreading disinformation or false information affecting the information security of the Republic of Moldova.
A Public consultation is scheduled to take place this week, which might result in changes of the draft law.