Control of compliance of domestic banking operations with reference to the standards applied in the European Union

Dragojlović Nikola (Pravni fakultet Univerziteta u Beogradu), nikoladragojlovicbgd@gmail.com

This paper deals with the compliance function of banking operations in Serbia and provides an overview of the basic standards in this area applied in the European Union (EU). After the introductory part of the paper, the author presents an analysis of the regulatory framework of domestic banking operations, which includes, among other things, the control of banking operations, business risks and the management of these risks, the risk of preventing money laundering and terrorist financing, and the performance of supervision by supervisors and regulators. The third and fourth parts of the paper contain a brief description of the relevant principles from the internal governance guidelines applied in the EU, the principles of the Basel Committee on Banking Supervision on compliance, and a description of the international standard ISO 37301 (compliance management system). The fifth part of the paper discusses numerous business activities related to the compliance function in the business practice of Serbian banks. The final part of the paper contains conclusions regarding the importance of implementing international banking standards in the supervision of banking operations in the Republic of Serbia.

Keywords: Control function, risk management, prevention of money laundering and terrorist financing, international standards, EU