Armenia’s AML Guidelines for Businesses: An Overview of Compliance Status

The Financial Action Task Force (FATF) has released its Mutual Evaluation Report for Armenia, which assesses the country’s implementation of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. The report provides an overview of Armenia’s compliance with 40 FATF Recommendations.

Compliance Status

Armenia is largely compliant with several key recommendations, including:

National Cooperation and Coordination (R.2): Armenia has established a coordination mechanism to ensure effective cooperation between its competent authorities.
Confiscation and Provisional Measures (R.4): Armenia has implemented measures for confiscating proceeds of crime and freezing assets.
Terrorist Financing Offence (R.5): Armenia has criminalized terrorist financing activities.
Targeted Financial Sanctions related to Terrorism and Terrorist Financing (R.6): Armenia has implemented targeted financial sanctions against individuals and entities associated with terrorism and terrorist financing.
Transparency and Beneficial Ownership of Legal Persons (R.24): Armenia requires legal persons to maintain records of their beneficial ownership.

Partial Compliance

Armenia is partially compliant with several recommendations, including:

Assessing Risk and Applying a Risk-Based Approach (R.1): Armenia has not fully implemented a risk-based approach in its AML/CFT framework.
Non-Profit Organisations (R.8): Armenia’s regulation of non-profit organizations needs improvement.
Regulation and Supervision of Financial Institutions (R.26): Armenia’s supervision of financial institutions is insufficient.

Areas for Improvement

Armenia has room for improvement in areas such as:

Customer Due Diligence (R.10): Armenia’s customer due diligence measures are inadequate.
Record Keeping (R.11): Armenia’s record-keeping requirements are not sufficient.
Internal Controls and Foreign Branches and Subsidiaries (R.18): Armenia has not implemented adequate internal controls for foreign branches and subsidiaries.

Armenia is compliant with several recommendations related to financial institutions, including:

Correspondent Banking (R.13): Armenia’s regulation of correspondent banking relationships is satisfactory.
Money or Value Transfer Services (R.14): Armenia has implemented measures for money and value transfer services.
New Technologies (R.15): Armenia has implemented measures to address AML/CFT risks in new technologies.
Wire Transfers (R.16): Armenia’s regulation of wire transfers is satisfactory.
Reliance on Third Parties (R.17): Armenia allows financial institutions to rely on third-party providers for AML/CFT purposes.
Reporting of Suspicious Transactions (R.20): Armenia requires financial institutions to report suspicious transactions.

Recommendations for Improvement

The report highlights areas where Armenia needs to improve its AML/CFT framework, including:

Powers of Supervisors (R.27): Armenia’s supervisors lack sufficient powers to effectively supervise financial institutions.
Regulation and Supervision of DNFBPs (R.28): Armenia has not implemented adequate regulation and supervision of designated non-financial businesses and professions (DNFBPs).
International Instruments (R.36): Armenia has not fully implemented international instruments related to AML/CFT.

Conclusion

The report provides a comprehensive assessment of Armenia’s AML/CFT framework and highlights areas where the country needs to improve its compliance with FATF Recommendations. Businesses operating in Armenia should take note of these recommendations and ensure that they are implementing robust AML/CFT measures to prevent financial crime.