Financial Crime World

Title: Armenia’s Fight Against Money Laundering and Terrorist Financing: A Progress Report

Subtitle: Assessing the Effectiveness of AML/CTF Measures in Armenia

Executive Summary

This report presents an analysis of Armenia’s current anti-money laundering (AML) and counter-terrorist financing (CTF) measures based on the findings of a recent on-site evaluation by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). The study examines Armenia’s compliance with the Financial Action Task Force (FATF) 40 recommendations, evaluates the effectiveness of the country’s AML/CFT system, and offers recommendations for strengthening its framework.

Key Findings

  • Strength of legal and institutional framework: Armenia’s legal and institutional framework against money laundering and terrorist financing is strong. The country has a generally high level of technical compliance with the FATF recommendations.

  • Primary ML risks: The primary money laundering (ML) risks identified in Armenia include fraud (including cybercrime), tax evasion, theft, and embezzlement. Corruption, smuggling, real estate, the shadow economy, and cash also pose significant vulnerabilities.

  • Terrorist financing (TF) risk: The risk of terrorist financing is low, as there have been no investigations, prosecutions, or convictions for terrorism-related activities. Nevertheless, the country has an effective mechanism for implementing targeted financial sanctions.

  • Financial Intelligence Unit (FIU): The FIU plays a very effective role in generating intelligence for law enforcement agencies but faces shortcomings in the utilization of FIU notifications by law enforcement to develop evidence and trace criminal proceeds.

  • Investigations, prosecutions, and convictions: The number of ML investigations, prosecutions, and convictions has increased, but there is a need for more targeted attention on ML connected to tax evasion, corruption, and cybercrime.

  • Risk assessments: Despite significant improvements in recent years, more needs to be done to ensure financial institutions properly implement risk assessments and incorporate findings from the National Risk Assessment into their policies.

  • Strengthening the regulation and supervision of DNFBPs: There is a need to strengthen the regulation and supervision of Designated Non-Financial Businesses and Professionals (DNFBPs), such as real estate agents, dealers in precious metals and stones, lawyers, and accountants.

Assessment

Although Armenia has made considerable progress in implementing AML/CFT measures, there is more work to be done in addressing the identified vulnerabilities and ensuring a comprehensive understanding and implementation of FATF recommendations.