MER-Greece-2019.Pdf

Anti-money laundering and counter-terrorist ﬁnancing measures Greece Mutual Evaluation Report September 2019 The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CTF) standard. For more information about the FATF, please visit the website: <a href="/goto?url=http://www.fatf-gafi.org/" target="_blank">www.fatf-gafi.org. </a>This document and/or any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. This assessment was adopted by the FATF at its June 2019 Plenary meeting. Citing reference: FATF (2019), Anti-money laundering and counter-terrorist financing measures – Greece, Fourth Round Mutual Evaluation Report, FATF, Paris <a href="/goto?url=http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-greece-2019.html" target="_blank">http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-greece-2019.html </a>© 2019 FATF-. All rights reserved. No reproduction or translation of this publication may be made without prior written permission. Applications for such permission, for all or part of this publication, should be made to the FATF Secretariat, 2 rue André Pascal 75775 Paris Cedex 16, France (fax: +33 1 44 30 61 37 or e-mail: <a href="mailto:[email protected]" target="_blank">[email protected]</a><a href="mailto:[email protected]" target="_blank">)</a>. Photo Credit - Cover: © Stratos Kalafatis, Archipelago, Agra Publications, 2017 Table of Contents <a href="#5_0">Key Findings.................................................................................................................................................................... 3 </a><a href="#7_0">Risks and General Situatio</a><a href="#7_0">n</a><a href="#7_0">.</a><a href="#7_0">..................................................................................................................................... 5 </a><a href="#7_1">Overall Level of Compliance and Effectiveness ................................................................................................ 5 </a><a href="#13_0">Priority Action</a><a href="#13_0">s</a><a href="#13_0">.</a><a href="#13_0">...........................................................................................................................................................11 </a><a href="#15_0">MUTUAL EVALUATION REPORT............................................................................................................... 13 </a><a href="#15_1">Preface .............................................................................................................................................................................13 </a><a href="#17_0">Chapter 1. ML/TF RISKS AND CONTEXT................................................................................................ 15 </a><a href="#19_0">ML/TF Risks and Scoping of Higher Risk Issue</a><a href="#19_0">s</a><a href="#19_0">.</a><a href="#19_0">...........................................................................................17 </a><a href="#23_0">Materiality......................................................................................................................................................................21 </a><a href="#24_0">Structural Elements....................................................................................................................................................22 </a><a href="#24_1">Background and Other Contextual Factors ......................................................................................................22 </a><a href="#0_0">Chapter 2. NATIONAL AML/CFT POLICIES AND CO-ORDINATIO</a><a href="#0_0">N</a><a href="#0_0">.</a><a href="#0_0">.............................................. 33 </a><a href="#0_1">Key Findings and Recommended Actions.........................................................................................................33 </a><a href="#0_2">Immediate Outcome 1 (Risk, Policy and Co-ordination) ............................................................................34 </a><a href="#0_0">Chapter 3. LEGAL SYSTEM AND OPERATIONAL ISSUE</a><a href="#0_0">S</a><a href="#0_0">.</a><a href="#0_0">.................................................................. 43 </a><a href="#0_3">Key Findings and Recommended Actions.........................................................................................................43 </a><a href="#0_4">Immediate Outcome 6 (Financial Intelligence ML/TF</a><a href="#0_4">)</a><a href="#0_4">.</a><a href="#0_4">..............................................................................47 </a><a href="#0_5">Immediate Outcome 7 (ML investigation and prosecution) .....................................................................58 </a><a href="#0_0">Immediate Outcome 8 (Confiscation).................................................................................................................69 </a><a href="#0_0">Chapter 4. TERRORIST FINANCING AND FINANCING OF PROLIFERATION............................... 75 </a><a href="#0_6">Key Findings and Recommended Actions.........................................................................................................75 </a><a href="#0_7">Immediate Outcome 9 (TF investigation and prosecution) ......................................................................77 </a><a href="#0_8">Immediate Outcome 10 (TF preventive measures and financial sanctions)......................................84 </a><a href="#0_9">Immediate Outcome 11 (PF financial sanctions)...........................................................................................88 </a><a href="#0_0">Chapter 5. PREVENTIVE MEASURES ....................................................................................................... 93 </a><a href="#0_10">Key Findings and Recommended Actions.........................................................................................................93 </a><a href="#0_11">Immediate Outcome 4 (Preventive Measures</a><a href="#0_11">)</a><a href="#0_11">.</a><a href="#0_11">..............................................................................................95 </a><a href="#0_0">Chapter 6. SUPERVISION...........................................................................................................................109 </a><a href="#0_12">Key Finding and Recommended Actions.......................................................................................................</a><a href="#0_12">.</a><a href="#0_12">1</a><a href="#0_12">09 </a><a href="#0_13">Immediate Outcome 3 (Supervision)..............................................................................................................</a><a href="#0_13">.</a><a href="#0_13">1</a><a href="#0_13">11 </a><a href="#0_0">Chapter 7. LEGAL PERSONS AND ARRANGEMENTS.........................................................................125 </a><a href="#0_12">Key Finding and Recommended Actions.......................................................................................................</a><a href="#0_12">.</a><a href="#0_12">1</a><a href="#0_12">25 </a><a href="#0_14">Immediate Outcome 5 (Legal Persons and Arrangements) ..................................................................</a><a href="#0_14">.</a><a href="#0_14">1</a><a href="#0_14">26 </a><a href="#0_0">Chapter 8. INTERNATIONAL CO-OPERATION....................................................................................131 </a><a href="#0_15">Key Finding and Recommended Actions.......................................................................................................</a><a href="#0_15">.</a><a href="#0_15">1</a><a href="#0_15">31 </a><a href="#0_0">Immediate Outcome 2 (International Co-operation)...............................................................................</a><a href="#0_0">.</a><a href="#0_0">1</a><a href="#0_0">33 </a>2<a href="#0_0">TECHNICAL COMPLIANCE ANNEX..........................................................................................................153 </a><a href="#0_16">Recommendation 1 </a><a href="#0_16">– </a><a href="#0_16">Assessing risks and applying a risk-based approach...................................</a><a href="#0_16">.</a><a href="#0_16">1</a><a href="#0_16">53 </a><a href="#0_17">Recommendation 2 - National Co-operation and Co-ordination.........................................................</a><a href="#0_17">.</a><a href="#0_17">1</a><a href="#0_17">55 </a><a href="#0_2">Recommendation 3 - Money laundering offence .......................................................................................</a><a href="#0_2">.</a><a href="#0_2">1</a><a href="#0_2">56 </a><a href="#0_18">Recommendation 4 - Confiscation and provisional measure</a><a href="#0_18">s</a><a href="#0_18">.</a><a href="#0_18">............................................................</a><a href="#0_18">.</a><a href="#0_18">1</a><a href="#0_18">57 </a><a href="#0_0">Recommendation 5 - Terrorist financing offence......................................................................................</a><a href="#0_0">.</a><a href="#0_0">1</a><a href="#0_0">59 </a><a href="#0_19">Recommendation 6 - Targeted financial sanctions related to terrorism and terrorist financing160 </a><a href="#0_0">Recommendation 7 </a><a href="#0_0">– </a><a href="#0_0">Targeted financial sanctions related to proliferation..................................</a><a href="#0_0">.</a><a href="#0_0">1</a><a href="#0_0">66 </a><a href="#0_20">Recommendation 8 </a><a href="#0_20">– </a><a href="#0_20">Non-profit organisation</a><a href="#0_20">s</a><a href="#0_20">.</a><a href="#0_20">........................................................................................</a><a href="#0_20">.</a><a href="#0_20">1</a><a href="#0_20">68 </a><a href="#0_21">Recommendation 9 </a><a href="#0_21">– </a><a href="#0_21">Financial institution secrecy laws .......................................................................</a><a href="#0_21">.</a><a href="#0_21">1</a><a href="#0_21">73 </a><a href="#0_22">Recommendation 10 </a><a href="#0_22">– </a><a href="#0_22">Customer due diligence.........................................................................................</a><a href="#0_22">.</a><a href="#0_22">1</a><a href="#0_22">74 </a><a href="#0_23">Recommendation 11 </a><a href="#0_23">– </a><a href="#0_23">Record-keeping.........................................................................................................</a><a href="#0_23">.</a><a href="#0_23">1</a><a href="#0_23">77 </a><a href="#0_24">Recommendation 12 </a><a href="#0_24">– </a><a href="#0_24">Politically exposed persons .................................................................................</a><a href="#0_24">.</a><a href="#0_24">1</a><a href="#0_24">78 </a><a href="#0_25">Recommendation 13 </a><a href="#0_25">– </a><a href="#0_25">Correspondent banking.........................................................................................</a><a href="#0_25">.</a><a href="#0_25">1</a><a href="#0_25">79 </a><a href="#0_26">Recommendation 14 </a><a href="#0_26">– </a><a href="#0_26">Money or value transfer service</a><a href="#0_26">s</a><a href="#0_26">.</a><a href="#0_26">.....................................................................</a><a href="#0_26">.</a><a href="#0_26">1</a><a href="#0_26">80 </a><a href="#0_27">Recommendation 15 </a><a href="#0_27">– </a><a href="#0_27">New technologies.....................................................................................................</a><a href="#0_27">.</a><a href="#0_27">1</a><a href="#0_27">81 </a><a href="#0_23">Recommendation 16 </a><a href="#0_23">– </a><a href="#0_23">Wire transfers ...........................................................................................................</a><a href="#0_23">.</a><a href="#0_23">1</a><a href="#0_23">82 </a><a href="#0_0">Recommendation 17 </a><a href="#0_0">– </a><a href="#0_0">Reliance on third parties.......................................................................................</a><a href="#0_0">.</a><a href="#0_0">1</a><a href="#0_0">84 </a><a href="#0_4">Recommendation 18 </a><a href="#0_4">– </a><a href="#0_4">Internal controls and foreign branches and subsidiaries .......................</a><a href="#0_4">.</a><a href="#0_4">1</a><a href="#0_4">86 </a><a href="#0_28">Recommendation 19 </a><a href="#0_28">– </a><a href="#0_28">Higher-risk countries .............................................................................................</a><a href="#0_28">.</a><a href="#0_28">1</a><a href="#0_28">87 </a><a href="#0_29">Recommendation 20 </a><a href="#0_29">– </a><a href="#0_29">Reporting of suspicious transaction ................................................................</a><a href="#0_29">.</a><a href="#0_29">1</a><a href="#0_29">88 </a><a href="#0_30">Recommendation 21 </a><a href="#0_30">– </a><a href="#0_30">Tipping-off and confidentiality ..........................................................................</a><a href="#0_30">.</a><a href="#0_30">1</a><a href="#0_30">88 </a><a href="#0_31">Recommendation 22 </a><a href="#0_31">– </a><a href="#0_31">DNFBPs: Customer Due Diligence.....................................................................</a><a href="#0_31">.</a><a href="#0_31">1</a><a href="#0_31">89 </a><a href="#0_32">Recommendation 23 </a><a href="#0_32">– </a><a href="#0_32">DNFBPs: Other measures .....................................................................................</a><a href="#0_32">.</a><a href="#0_32">1</a><a href="#0_32">90 </a><a href="#0_33">Recommendation 24 </a><a href="#0_33">– </a><a href="#0_33">Transparency and beneficial ownership of legal persons ......................</a><a href="#0_33">.</a><a href="#0_33">1</a><a href="#0_33">91 </a><a href="#0_34">Recommendation 25 </a><a href="#0_34">– </a><a href="#0_34">Transparency and beneficial ownership of legal arrangement</a><a href="#0_34">s</a><a href="#0_34">..........</a><a href="#0_34">.</a><a href="#0_34">1</a><a href="#0_34">94 </a><a href="#0_35">Recommendation 26 </a><a href="#0_35">– </a><a href="#0_35">Regulation and supervision of financial institutions ................................</a><a href="#0_35">.</a><a href="#0_35">1</a><a href="#0_35">95 </a><a href="#0_36">Recommendation 27 </a><a href="#0_36">– </a><a href="#0_36">Powers of supervisors ...........................................................................................</a><a href="#0_36">.</a><a href="#0_36">1</a><a href="#0_36">97 </a><a href="#0_37">Recommendation 28 </a><a href="#0_37">– </a><a href="#0_37">Regulation and supervision of DNFBP</a><a href="#0_37">s</a><a href="#0_37">.</a><a href="#0_37">.........................................................</a><a href="#0_37">.</a><a href="#0_37">1</a><a href="#0_37">97 </a><a href="#0_38">Recommendation 29 - Financial intelligence units...................................................................................</a><a href="#0_38">.</a><a href="#0_38">1</a><a href="#0_38">98 </a><a href="#0_39">Recommendation 30 </a><a href="#0_39">– </a><a href="#0_39">Responsibilities of law enforcement and investigative authorities....</a><a href="#0_39">.</a><a href="#0_39">2</a><a href="#0_39">01 </a><a href="#0_40">Recommendation 31 - Powers of law enforcement and investigative authorities......................</a><a href="#0_40">.</a><a href="#0_40">2</a><a href="#0_40">02 </a><a href="#0_0">Recommendation 32 </a><a href="#0_0">– </a><a href="#0_0">Cash Couriers.............................................................................................................</a><a href="#0_0">.</a><a href="#0_0">2</a><a href="#0_0">03 </a><a href="#0_41">Recommendation 33 </a><a href="#0_41">– </a><a href="#0_41">Statistics.......................................................................................................................</a><a href="#0_41">.</a><a href="#0_41">2</a><a href="#0_41">05 </a><a href="#0_42">Recommendation 34 </a><a href="#0_42">– </a><a href="#0_42">Guidance and feedback..........................................................................................</a><a href="#0_42">.</a><a href="#0_42">2</a><a href="#0_42">06 </a><a href="#0_0">Recommendation 35 </a><a href="#0_0">– </a><a href="#0_0">Sanctions .....................................................................................................................</a><a href="#0_0">.</a><a href="#0_0">2</a><a href="#0_0">06 </a><a href="#0_43">Recommendation 36 </a><a href="#0_43">– </a><a href="#0_43">International instruments....................................................................................</a><a href="#0_43">.</a><a href="#0_43">2</a><a href="#0_43">07 </a><a href="#0_17">Recommendation 37 - Mutual legal assistance...........................................................................................</a><a href="#0_17">.</a><a href="#0_17">2</a><a href="#0_17">08 </a><a href="#0_44">Recommendation 38 </a><a href="#0_44">– </a><a href="#0_44">Mutual legal assistance: freezing and confiscation....................................</a><a href="#0_44">.</a><a href="#0_44">2</a><a href="#0_44">09 </a><a href="#0_45">Recommendation 39 </a><a href="#0_45">– </a><a href="#0_45">Extradition..................................................................................................................</a><a href="#0_45">.</a><a href="#0_45">2</a><a href="#0_45">10 </a><a href="#0_1">Recommendation 40 </a><a href="#0_1">– </a><a href="#0_1">Other forms of international co-operation....................................................</a><a href="#0_1">.</a><a href="#0_1">2</a><a href="#0_1">11 </a><a href="#0_0">Summary of Technical Compliance </a><a href="#0_0">– </a><a href="#0_0">Key Deficiencies..................................................................217 </a><a href="#0_0">Glossary of Acronyms ................................................................................................................................220 </a>Executive Summary <ul style="display: flex;"><li style="flex:1">1. </li><li style="flex:1">This report summarises the AML/CFT measures in place in Greece as at the </li></ul>date of the on-site visit (30 October to 16 November 2018). It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Greece’s AML/CFT system, and it provides recommendations on how the system could be strengthened. Key Findings a) Greek authorities generally understand the ML/TF vulnerabilities and risks they face as presented in the NRA adopted in May 2018. Greece adopted a national AML/CFT Action Plan based on the findings of the NRA. Generally, the objectives of most Greek authorities are consistent with identified ML/TF risks and national AML/CFT policies. The National Strategy Committee plays a significant role in effective co-operation and co-ordination at the national policymaking levels in Greece. However, Greece had not yet finalised its national AML/CFT Strategy at the time of the on-site visit. b) Greek authorities effectively use financial intelligence and other information to develop evidence and trace proceeds in investigations for ML, TF, and associated predicate offences. Input from HFIU is regularly sought by LEAs in the course of their investigations. c) HFIU, SSFECU/SDOE and Greek LEAs actively investigate suspicions of ML and related predicate offences, including parallel financial investigations and complex investigations involving organised criminal groups and cross-border activities. However, once these cases are submitted to prosecutors and become subject to judicial process, cases encounter undue delays. The need, in practice, to prove a predicate offence beyond a reasonable doubt in order to demonstrate the illegal origin of funds limits the ability to detect, prosecute, and convict for different types of ML, particularly foreign predicates, professional money launderers, or money launderers who bear no relation to the underlying offence. Too little information regarding sanctions imposed upon conviction for ML was available to determine whether sanctions are proportionate and dissuasive. 4││ FATF/ME(2019)5 4 | EXECUTIVE SUMMARY 44d) Greek authorities make effective use of tools for seizing and freezing assets, depriving criminals of illicit proceeds and preserving assets for future confiscation. However, delays in prosecution and appellate processes prevent effective confiscation in many cases, and lack of comprehensive statistics prevents Greece from demonstrating the degree to which criminals are permanently deprived of their assets. Sanctions for false or non-declaration of cash or BNI is not proportionate or dissuasive. e) In Greece, TF activities are effectively identified and investigated, counterterrorism investigations all include a financial component and asset freezing is effectively used to disrupt financial flows, even in the absence of a TF conviction. Greek authorities have conducted a limited number of TF prosecutions but has obtained two convictions in the court of first instance. This is generally in line with Greece’s context and TF risk profile. However, sanctions do not appear to be proportionate or dissuasive. f) Greece effectively deprives assets related to terrorism through domestic designations for the targeted financial sanctions (TFS) and has frozen a wide range of assets. However, limited understanding among certain DNFBPs and their supervisors hinders effective implementation. Greece has not yet conducted a comprehensive TF risk assessment to determine the vulnerability of NPO sectors. This results in a lack of risk-based supervision over NPOs. g) Greece has in place an adequate TFS regime to combat Proliferation Financing (PF), although no PF-related assets have yet been identified or frozen. Effective co-operation and co-ordination between Customs and law enforcement authorities domestically and internationally contributes to identifying smuggling of items related to proliferation. h) Financial institutions (FI) have a reasonably good understanding of their AML/CFT obligations and ML/TF risk. They adequately implement preventive measures in a risk-sensitive manner. On the other hand, understanding of ML/TF risks and the obligations is limited among DNFBPs, and therefore their implementation is not robust enough. This gap has been observed in the number of STR filing among the sectors: reports by the DNFBPs is very low in general. i) The supervisory authorities in the financial sector have a good understanding of the risks in the financial sector and in individual firms, and they apply a risk based approach to their supervision in general. However, a lack of adequate resources has hindered their capacity to use full range of supervisory tools, e.g. on-site inspection. There are gaps in the understanding of ML/TF risk among the DNFBP supervisors. Sanctions beyond fines are rarely imposed across the financial and non-financial sectors. j) Basic information on legal persons established in Greece is maintained mostly by the commercial registry, the General Electronic Commercial Registry (GEMI), and is publicly available. Greece is in the process of developing its central Beneficial

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