Azerbaijan Banks Ordered to Step Up Customer Verification
Combating Money Laundering and Terrorism Financing
Azerbaijan’s financial authorities have issued new guidelines requiring banks and other financial institutions to verify the identities of their customers and beneficial owners more thoroughly in an effort to combat money laundering and terrorism financing.
New Requirements for Monitoring Entities
Under the new rules, monitoring entities - including:
- Banks
- Payment service providers
- Other financial institutions
must identify and verify the customer and beneficial owner in certain situations, such as:
- Before establishing business relations
- Before carrying out occasional transactions above a designated threshold
- When there is suspicion of money laundering or terrorism financing
Information Required for Verification
Monitoring entities must obtain information on the purpose and intended nature of the business relationship, including:
- The identity of the customer and beneficial owner
- Date of birth and permanent address for individuals
- Ownership and control structure for legal entities
- Reliable, independent sources for verification
Enhanced Due Diligence for Higher-Risk Customers
Monitoring entities will be required to perform enhanced due diligence for higher-risk categories of customers, business relationships, or transactions, including:
- Non-resident customers
- Legal entities with nominee shareholders or bearer shares
- Companies that have correspondent banking relationships
Strengthening Azerbaijan’s AML/CFT Framework
The new guidelines are aimed at strengthening Azerbaijan’s anti-money laundering and counter-terrorism financing (AML/CFT) framework and ensuring compliance with international standards.
Statement from the Central Bank of Azerbaijan
In a statement, the country’s financial regulator said: “These new guidelines are designed to help monitoring entities identify and mitigate the risks associated with money laundering and terrorism financing. We believe that these measures will strengthen our AML/CFT framework and ensure that Azerbaijan’s financial system remains robust and secure.”
Effective Date and Enforcement
The new guidelines come into effect immediately and will be enforced by the Central Bank of Azerbaijan.