Amended Prevention of Money Laundering and Terrorist Financing Act

A new Prevention of Money Laundering and Terrorist Financing Act was published in the Official Gazette on 4 November 2016 and will come into effect on 21 November 2016.

The most important changes in the amended law are as follows:

• A more elaborated definition of the legal owner in different legal organizational forms (company, institution, foreign funds and foreign institutions, entrepreneur, etc.)

• Further information about the legal owner in case of a standard and comprehensive procedure: name, permanent or temporary address, date of birth, nationality and level of shareholding or other means of control.

• Third party identification:

• The data concerning client identification needs to be provided immediately, and other documentation can be provided upon request of the Bank

• Client identification within the group: Institutions committed to follow the AML Act, and are part of a group carrying out its policies and procedures, shall relate to the mechanisms to detect and prevent money laundering and terrorist financing defined in the act.  Policies and procedures of data protection and information shall be  shared within the group.

• The abolishment of the List of Countries by Geographical Risk Area issued by Bank of Slovenia. Instead, a new list, issued by the European Commission, will be taken into consideration: The Slovene Office for Money Laundering will publish the list on web page:  http://www.uppd.gov.si/si/.

• Slovene AML Office was granted powers with inspection and therefore will exercise, on the spot, control of all institutions committed to following the AML Act. At that point, the Office will cooperate with Bank of Slovenia and Securities Market Agency (SMA). All banks will be under the supervision of these three institutions.

• Additional penalties for severe violations (intention, greed, repetition) have been approved. The penalties will range from EUR 12,000 to EUR 120,000 and in the severe cases, can go up to EUR 5 mn for Financial Institutions or 10% of total annual turnover in the preceding business year.

• Disclosure related to control and identification of violations (including information on the offender): Supervisory authority (AML office, Bank of Slovenia and SMA) can publicly disclose information in relation to the control measures and sanctions for offenses that were identified and imposed.

Impact on investors: Compliance and harmonization of the Slovene prevention of money laundering and terrorist financing with EU regulation and FATF recommendations.