Financial Crime World

Evaluation Report on Armenia’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regime

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Overview

The Financial Action Task Force (FATF) has conducted an evaluation report on Armenia’s AML/CFT regime, highlighting several key areas for improvement.

Risk Assessment

  • The evaluation team notes that money laundering (ML) risks in Armenia might not be fully assessed and understood.
  • In contrast, financing of terrorism (FT) risks appear to be adequately understood.

Coordination and Cooperation

  • Operational cooperation between competent authorities seems sound.
  • However, coordination of strategies, particularly within the law enforcement sphere, does not seem sufficiently developed.

Private Sector Awareness

  • The banking sector presented a relatively better understanding of risk compared to other sectors.
  • Even in the banking sector, the understanding differed, and financial institutions did not commonly go beyond NRA conclusions for their own sectors when discussing risk.

Exemptions and Simplified Measures

  • Exemptions and instances where simplified measures are permitted are based on FATF Standards rather than being justified by the findings of the NRA.

Financial Intelligence Unit (FIU)

  • The FIU has access to a very broad range of information and can request additional information from all reporting entities.
  • It has in place advanced processes for the operational and strategic analysis of information and disseminates useful intelligence to law enforcement authorities.

Suspicious Transaction Reports (STRs)

  • The quality of STRs has improved, but reporting entities may be overlooking certain suspicious transactions and/or business activities due to potential overreliance on typologies and pre-defined indicators issued by the FIU.

Availability of Information

  • Information that is subject to financial secrecy is available to law enforcement authorities under the Criminal Procedure Code (when it is required in relation to a suspect or an accused person) and the Law on Operational Intelligence Activities (without any limitation relative to a suspect or an accused).

Use of Intelligence

  • There is little evidence that intelligence, whether generated by the FIU or LE operative units, is used to a great extent to identify ML and conduct financial investigations.

Convictions for Money Laundering

  • LEAs do not routinely conduct proactive parallel financial investigations, which limits the potential for identifying ML cases.
  • Only one autonomous ML conviction was achieved in the period under review, and even there, the judiciary appears to have based its ruling on the admission that the predicate offence had been committed.

Seizure and Confiscation of Criminal Proceeds

  • Armenia does not appear to pursue the seizure and confiscation of criminal proceeds, instrumentalities, and property of equivalent value as a key part of its AML/CFT strategy.