The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) has released its latest follow-up reports, assessing the progress made by Estonia and Slovakia in aligning with the Financial Action Task Force (FATF) recommendations. These evaluations shed light on the strides and shortcomings in the fight against money laundering (ML) and terrorist financing (TF) within these nations.
Table of Contents
Estonia’s Advances in Financial Sanctions
MONEYVAL’s report on Estonia highlights measurable improvements in implementing targeted financial sanctions related to terrorism and terrorist financing. However, significant gaps remain, requiring further action to achieve full compliance with FATF standards. Estonia’s updated ratings among the 40 FATF recommendations include:
- Compliant: 7 recommendations
- Largely Compliant: 19 recommendations
- Partially Compliant: 14 recommendations
Estonia has demonstrated progress in critical areas, but achieving a higher compliance level demands continued commitment from regulatory bodies. Enhanced measures, particularly in ensuring the effectiveness of sanctions and maintaining vigilance against financial crimes, will be crucial moving forward.
In addition to targeted sanctions, Estonia has also taken steps to enhance its financial intelligence capabilities. The Financial Intelligence Unit (FIU) has increased collaboration with international agencies, aiming to identify and address cross-border money laundering threats. Despite these advancements, the need for more robust oversight mechanisms and continuous training for financial institutions remains evident.
Slovakia’s Progress and Persistent Gaps
The Slovak Republic’s follow-up report acknowledges advancements in several areas, including improvements in the regulation of non-profit organizations, virtual assets, and dealings with high-risk jurisdictions. Yet, these steps fall short of elevating the nation’s compliance ratings to satisfactory levels. Key findings include:
- Compliant: 5 recommendations
- Largely Compliant: 23 recommendations
- Partially Compliant: 12 recommendations
MONEYVAL noted that Slovakia’s progress in addressing deficiencies remains insufficient for three critical FATF recommendations: non-profit organizations, virtual assets, and customer due diligence (Recommendation 10). The country is under pressure to deliver an update by June 2025 regarding its customer due diligence improvements and a comprehensive progress report by December 2025.
Slovakia has also faced challenges in effectively regulating emerging technologies such as cryptocurrencies. Virtual Asset Service Providers (VASPs) require stringent oversight to prevent misuse for illicit activities. MONEYVAL has urged Slovakia to enhance its risk assessment strategies and adopt a more proactive approach to ensure compliance with international standards.
Enhanced Follow-Up Status for Both Nations
Both Estonia and Slovakia remain subject to MONEYVAL’s enhanced follow-up procedures. This designation underscores the ongoing challenges these countries face in meeting international standards for anti-money laundering (AML) and countering the financing of terrorism (CFT).
For Estonia, the primary focus lies in:
- Strengthening the implementation of targeted financial sanctions.
- Addressing the 14 recommendations rated as partially compliant.
- Enhancing public-private sector collaboration to tackle ML and TF threats.
In Slovakia, priorities include:
- Bridging the gaps in virtual asset regulations.
- Enhancing oversight of high-risk jurisdictions.
- Improving compliance with customer due diligence requirements.
- Increasing transparency in the non-profit sector to prevent exploitation for TF purposes.
The Road Ahead for Estonia and Slovakia
The road to full compliance with FATF recommendations is arduous but essential for mitigating financial crime risks. Estonia and Slovakia’s ability to address current deficiencies will have significant implications for their global reputation and economic stability. Continuous monitoring, regulatory reforms, and international cooperation will be pivotal in driving progress.
For Estonia, the upcoming period presents an opportunity to consolidate its achievements and target areas where progress has been slower. Expanding the scope of financial crime investigations and integrating advanced analytical tools can help uncover complex laundering schemes. Additionally, fostering a culture of compliance within the private sector is key to long-term success.
In Slovakia, the emphasis on addressing regulatory gaps in virtual assets and improving customer due diligence is paramount. By leveraging international best practices and investing in capacity-building initiatives, Slovakia can strengthen its AML framework. Enhanced cooperation with neighboring countries and participation in regional AML initiatives will also play a critical role.
Countries under enhanced follow-up face increased scrutiny and reporting requirements, but this status also serves as a critical mechanism to ensure sustained efforts in addressing ML and TF risks. Both nations must seize this opportunity to implement robust measures, fostering a more secure and transparent financial environment.
Conclusion: Strengthening Global AML and CFT Standards
MONEYVAL’s evaluations of Estonia and Slovakia reflect a broader commitment to enhancing global financial security. While both nations have made commendable efforts, the journey to full compliance remains ongoing. Addressing identified gaps and maintaining vigilance against emerging threats will be key to their success.
As the December 2025 deadline approaches, the international community will closely watch these nations’ progress. Strengthening AML and CFT frameworks not only aligns with global standards but also reinforces trust in financial systems worldwide. The lessons learned from these evaluations can serve as valuable guidance for other countries aiming to enhance their own compliance with FATF recommendations.ide.ide.
Related Links
- FATF Recommendations Overview
- MONEYVAL Official Website
- Estonia’s AML/CFT Progress
- Slovakia’s AML/CFT Progress
- Understanding Enhanced Follow-Up
Other FinCrime Central Articles about MONEYVAL
- Monaco focuses on combatting money laundering and being taken off the grey list
- Poland’s AML Progress: Enhanced Measures and Positive Ratings
