AML and CTF law and regulation in Slovenia

The Prevention of Money Laundering and Terrorist Financing Act, adopted on 20 October 2016, as amended (the “AML Act”).

With the adoption of the AML Act back in 2016, the provisions of the 4^th AML Directive were implemented. 

The 5^th AML Directive has been implemented with amendments to the AML Act which became effective on 11 July 2020. 

The Office for Money Laundering Prevention (the “OMLP”) as the body within the Ministry of Finance is the main AML/CTF supervisory authority. The OMLP has the authority to collect, store, investigate, analyze and disclose relevant information under the AML Act.

Other authorities authorized to monitor compliance with key obligations under the AML Act in certain sectors include the Bank of Slovenia, the Securities Market Agency, the Insurance Supervision Agency, the Financial Administration, the Market Inspectorate, the Agency for Public Oversight of Auditing, the Slovenian Institute of Auditors, the Slovenian Bar Association, and the Chamber of Notaries of Slovenia. 

There are more than 40 categories of entities under the AML Act, including banks, financial institutions, payment services providers, post, insurance and reinsurance companies and intermediaries, investment funds, and under certain conditions also attorneys and notaries. 

The scope of the obliged entities follows the scope in the 4^th and 5^th AML Directives, though the category of “other persons trading in goods to the extent that payments are made or received in cash of EUR 10,000 or more” is not included in the list of entities—the reason is that the AML Act includes a provision that those who sell goods or carry out services are prohibited from accepting cash payments exceeding EUR 5,000. 

The KYC requirements in Slovenia follow the requirements of the AML Directives.  

To facilitate the CDD obligations of the reporting entities, the AML Act provides a general obligation on business entities to disclose their UBOs to the Agency of the Republic of Slovenia for Public Legal Records and Related Services Register (AJPES), which also manages the business register. 

Yes, if certain requirements are met, the AML Act provides an option for electronic identification or video electronic identification. 

• Electronic identification of a natural person is possible provided that the assurance level corresponds to the assurance level high. Further, the first payment within the scope of the transaction must be processed via customer's account at a credit institution. 
• Video electronic identification may be made under the following conditions: 
  • for products or services for which it is established that an increased risk of money laundering or terrorism financing does not exist;
  • the customer’s identity is determined based on an official personal identification document equipped with a biometric photograph;
  • the customer is over 18 years old;
  • the customer has permanent residency in countries (member states or third countries) with efficient AML/CFT mechanisms; 
  • the customer does not reside in a country listed as having a significant risk of money laundering or terrorism financing;
  • the use one enhanced CDD measure for one year;
  • ensuring that the first transaction is made via the customer’s bank account at a credit institution. 

Further, in video-electronic identification a threshold of EUR 15,000 applies. 

The reporting entities’ obligations under the AML Act follow the 4^th and 5^th AML Directives. These include customer due diligence (CDD), the collection and storage of information and documents; an assessment of the risk of money laundering and terrorist financing, and the disclosure of information on suspicious operations, transactions and customers. There are no obligations that go beyond the scope of the AML Directives.

The latest National Risk Assessment for Money Laundering and Terrorist Financing (the “NRA”) was prepared in November 2016 with data for 2014 and 2015. According to the AML/CTF Act, the NRA should be updated every four years, therefore the NRA for Slovenia should be updated some time this year.

The measures provided under the AML Act (either preventive measures such as a CDD or remedial measures such as the OMLP temporarily freezing transactions) are the same for AML and CTF. 

Money laundering and terrorist financing are criminalised under the Slovenian Criminal Code as standalone crimes. The penalties for money laundering and financing terrorism provided in the Criminal Code are imprisonment from one to 15 years, depending on the severity of the crime, and in certain cases along with imprisonment a court may impose also a fine and confiscation of money and assets. 

Legal entities can bear criminal liability under Slovenian law. A legal entity can be sanctioned with a fine or with forfeiture of property, and winding up the legal entity in certain cases, depending on the severity of the crime. 

The AML Act provides a range of sanctions for non-compliance with the key requirements, such as CDD, record-keeping, and suspicious transaction reporting. Fines vary depending on the type of the infringement, the type of infringer (an individual or entity, or type of entity—credit and financial institutions, etc.), whether its initial, repeated or systematic, and can reach as high as EUR 5 million or up to 10% of the annual turnover according to the consolidated accounts of the parent undertaking for the previous year. 

Progress appears to have been made in recent years regarding ML/TF investigations, however MONEYVAL has stated that the fight “is not fully prioritized” and that “authorities should be more proactive in investigating and prosecuting ML related to serious crime, in line with Slovenia’s risk profile”.