Financial Crime World

Armenia’s Compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Recommendations

Key Areas for Improvement

The report highlights several key areas where Armenia needs to enhance its AML/CFT framework.

Confiscation

  • Reconsider Approach: Armenian authorities should reassess their confiscation strategy to increase the number of successful confiscation actions.
  • Review Freezing Mechanisms: The freezing mechanisms outlined in Article 25 of the AML/CFT law require revision to meet international standards, including indefinite freezing regardless of investigation or prosecution outcomes.

Financial Intelligence Unit (FIU)

  • Increase Staff Capacity: Enhance the number of staff members, particularly in the Analysis division.
  • Establish a TR Analysis Unit: Consider creating a dedicated unit for terrorism and related analysis and provide guidance on professional secrecy.

Law Enforcement

  • Amend the Criminal Procedure Code (CPC): Provide general powers to law enforcement authorities to compel document production and information sharing in ML/TFS cases.
  • Harmonize Laws: Harmonize laws related to access to financial information, including Articles 10 of the Law on Banks and Financial Services with Article 29 of the Law on State Secrets.

Cross-Border Declaration

  • Grant Customs Authorities Power: Provide Customs authorities with power to stop or restrain currency suspected of ML/TF.
  • Introduce Freezing Requirements: Introduce freezing requirements for persons carrying out physical cross-border transportation of currency related to TF.

Preventive Measures: Financial Institutions

  • Prohibit Bearer Bank Books and Certificates of Deposit
  • Increase Guidance on CDD: Increase guidance on customer due diligence, including timeframes for updating customer data and obtaining identification information.
  • Ensure Effective Implementation: Ensure financial institutions effectively implement CDD measures through training or outreach.

Conclusion

The report emphasizes the need for Armenia to improve its AML/CFT framework in several areas, including confiscation, FIU capacity, law enforcement powers, and preventive measures in financial institutions. Addressing these concerns is crucial for enhancing Armenia’s ability to combat money laundering and terrorism financing.