Financial Crime World

Armenia’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Efforts: Areas for Improvement

Risk Assessment

  • The evaluation team found that money laundering risks in Armenia might not be fully assessed and understood, which can lead to inadequate prevention measures.
  • Financial transaction risks appear to be adequately understood, but a deeper understanding of ML risks is necessary.

Coordination and Cooperation

  • The Interagency Committee on AML/CFT is responsible for coordination, but its effectiveness is limited by a lack of strategic planning and cooperation between competent authorities.
  • Important intelligence work is not being brought into policy-making processes, which can hinder the development of effective strategies to combat ML.

Private Sector Engagement

  • The banking sector has a relatively better understanding of risk compared to other sectors, but even in the banking sector, there are differences in risk assessment.
  • Improving risk assessment and understanding among all sectors will help prevent ML.

Financial Intelligence Unit (FIU)

  • The FIU (FMC) has access to a broad range of information and can request additional information from reporting entities.
  • STR quality has improved, but reporting entities may overlook suspicious transactions due to overreliance on typologies and pre-defined indicators.

Law Enforcement Efforts

  • Law enforcement authorities have limited ability to broaden the scope of investigations using operative measures provided under the LOIA.
  • Intelligence is not being used effectively to identify ML cases or conduct financial investigations, which can hinder efforts to combat ML.

Confiscation and Seizure

  • Armenia does not appear to pursue the seizure and confiscation of criminal proceeds, instrumentalities, and property of equivalent value as a priority, which can lead to a lack of deterrence against ML.

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

  1. Improving the understanding and assessment of money laundering risks: This will help prevent ML and ensure that adequate prevention measures are in place.
  2. Enhancing coordination and cooperation between competent authorities: This will improve the effectiveness of the Interagency Committee on AML/CFT and ensure that important intelligence work is brought into policy-making processes.
  3. Increasing engagement with the private sector: This will help improve risk assessment and understanding among all sectors, which can prevent ML.
  4. Strengthening the FIU’s capacity and effectiveness: This will improve the quality of STRs and ensure that reporting entities are able to identify suspicious transactions effectively.
  5. Improving law enforcement efforts to identify and investigate ML cases: This will help ensure that intelligence is used effectively to combat ML.
  6. Prioritizing confiscation and seizure of criminal proceeds: This will help deter ML by ensuring that those involved in ML face consequences for their actions.