Armenia’s Banking Sector Adheres to Global Norms on Anti-Money Laundering, Combating Financing of Terrorism, Depositor Protection, and Bank Secrecy

The Armenian banking sector is committed to adhering to global norms on anti-money laundering (AML), combating the financing of terrorism (CFT), depositor protection, and bank secrecy. The country’s banking regulations are designed to ensure the stability and integrity of its financial system.

Anti-Money Laundering and Combating Financing of Terrorism

According to the Law on Combating Money Laundering and Terrorist Financing, banks in Armenia are required to have internal acts regarding AML and CFT. These acts must include policies, risk assessment regulations, and know-your-customer (KYC) processes.

• Banks must conduct customer due diligence at both the initiation of a business relationship and during ongoing service provision.
• Banks must report transactions subject to mandatory reporting and suspicious transactions.
• If a transaction is suspicious, a bank may suspend it and report it to the regulator; it must then act as per the instructions of the regulator.

Depositor Protection

The Deposit Guarantee Fund of Armenia, established by the Central Bank of Armenia (CBA), provides depositor protection guarantees for deposits up to AMD16 million in Armenian drams or AMD7 million in foreign currencies. The fund is responsible for managing funds and paying compensation where a “compensation event” occurs, such as when a bank is declared insolvent or bankrupt.

Bank Secrecy

The CBA has implemented measures to ensure bank secrecy, prohibiting the disclosure of information related to customer accounts and transactions without their consent. However, there are certain exceptions prescribed under the law, including cases where the disclosure of information is necessary for the exercise of supervisory powers by the CBA or for the provision of services by third-party companies.

Commitment to Global Norms

“We take our commitments to anti-money laundering, combating terrorism financing, depositor protection, and bank secrecy very seriously,” said a spokesperson for the Armenian banking sector. “We are committed to adhering to global norms and best practices to ensure the stability and integrity of our financial system.”

Key Takeaways

• Armenian banks are required to implement AML and CFT regulations, including policies, risk assessment regulations, and KYC processes.
• Banks must conduct customer due diligence at both the initiation of a business relationship and during ongoing service provision.
• The Deposit Guarantee Fund of Armenia provides depositor protection guarantees for deposits up to AMD16 million in Armenian drams or AMD7 million in foreign currencies.
• Bank secrecy is prohibited unless necessary for the exercise of supervisory powers by the CBA or for the provision of services by third-party companies.
• Armenia has made significant progress in strengthening its anti-money laundering and combating terrorism financing regime.