Financial Crime World

Armenia’s Banking Sector Takes Steps to Combat Financial Crime and Protect Depositors

Yerevan, Armenia - The Armenian banking sector is taking stringent measures to prevent and detect financial crimes, while ensuring the protection of depositors’ interests.

Combating Financial Crime

According to a recent report by the Central Bank of Armenia (CBA), banks in the country are required to conduct due diligence on transactions and business relationships to identify potential risks. This includes:

  • Reporting suspicious transactions and business relationships
  • Suspending or terminating transactions that pose a risk to the financial system

Freezing Assets Linked to Terrorism and Weapons Proliferation

The CBA has established strict regulations regarding the freezing of assets linked to terrorism and weapons proliferation. Banks are required to freeze assets directly or indirectly owned or controlled by individuals or entities associated with these activities, in accordance with international sanctions and national laws.

Depositor Protection Regime

Banks in Armenia are also subject to a depositor protection regime, which ensures that depositors’ funds are protected up to certain limits in the event of a bank’s insolvency. The Deposit Guarantee Fund of Armenia is responsible for managing the fund and paying compensation to depositors in the event of a “compensation event”.

  • The fund covers deposits up to AMD16 million for Armenian dram-denominated deposits
  • The fund covers deposits up to AMD7 million for foreign currency-denominated deposits

Exceptions

There are certain exceptions to this guarantee, including cases where:

  • The depositor is a bank manager or shareholder

Bank Secrecy

The CBA has established strict rules regarding the disclosure of customer information, which can only be shared in limited circumstances. Violations of these rules can result in:

  • Civil and criminal penalties
  • Administrative fines

Conclusion

The Armenian banking sector’s commitment to combating financial crime and protecting depositors’ interests is a vital step towards maintaining a stable and secure financial system.