Financial Crime World

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Mechanisms for Supervision of Activities by State Authorities: Armenia’s Progress

Yerevan, Armenia - The Armenian government has made significant strides in strengthening its mechanisms for supervising activities by state authorities, ensuring a robust system for protecting human rights and freedoms.

Financial Monitoring Center (FMC)

According to a recent report, the FMC receives, analyzes, and disseminates information on money laundering and terrorist financing (ML/FT), while engaging in national and international cooperation. The FMC’s limited supervisory functions are expected to gain further importance with legislative amendments in 2014.

Law Enforcement Authorities

Law enforcement authorities, including:

  • National Security Service (NSS)
  • Police
  • Ministry of Finance (MoF)
  • General Prosecution Office (GPO)

Provide for the exercise of pre-trial proceedings, while judicial authorities are responsible for in-trial proceedings. The report highlights the importance of improving practices in instigating and investigating criminal cases with potential elements of ML offenses.

Central Bank of Armenia (CBA)

The CBA exercises its licensing, regulatory, and supervisory functions over all financial institutions in the country, including:

  • Banks
  • Credit organizations
  • Insurance companies

The report notes that the CBA needs to fully implement and consistently apply a risk-based supervision approach and relevant supervisory tools.

Ministry of Finance (MoF)

The MoF ensures compliance with AML/CFT requirements for various categories of designated non-financial businesses and professions (DNFBPs), such as:

  • Licensed auditors
  • Casinos
  • Organizers of games of chance and lotteries

Key Findings

The report concludes that while there are still areas for improvement, Armenia’s mechanisms for supervising activities by state authorities have made significant progress. The key findings include:

  • Potential AML/CFT vulnerability from the FMC in exercising its functions is rated very low, with a stable trend going forward.
  • Potential AML/CFT vulnerability from law enforcement and judicial authorities in exercising their function of criminal prosecution is rated medium, with a declining trend going forward.
  • Potential AML/CFT vulnerability from the CBA in exercising its licensing, regulatory, and supervisory functions is rated low, with a declining trend going forward.

Conclusion

The Armenian government’s commitment to strengthening its mechanisms for supervising activities by state authorities is essential for protecting human rights and freedoms, as well as preventing and combating ML/FT.