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Banking Sector Adheres to Strict AML/KYC, Depositor Protection, and Bank Secrecy Norms

Yerevan, Armenia - The Armenian banking sector has been found to be in compliance with stringent Anti-Money Laundering (AML) and Know-Your-Customer (KYC) requirements, as well as depositor protection and bank secrecy norms.

Compliance with International Recommendations

According to a recent report by the Central Bank of Armenia (CBA), all banks operating in the country are required to adhere to AML/CFT recommendations issued by relevant international institutions. The CBA has also established strict guidelines for banks to conduct customer due diligence at both the initiation of a business relationship and during ongoing service provision.

Customer Due Diligence

The report highlighted that banks are obligated to:

  • Report transactions subject to mandatory reporting
  • Report suspicious transactions
  • Suspend or terminate a transaction or business relationship if it is deemed impossible to comply with KYC requirements or resolve suspicious activity concerns
  • Freeze assets directly or indirectly owned or controlled by persons related to terrorism or the proliferation of weapons of mass destruction in cases where a transaction is deemed suspicious

Depositor Protection

In addition, the report emphasized that all banks in Armenia are required to contribute to the Deposit Guarantee Fund (DGF) on a regular basis. The DGF provides compensation guarantees for depositors in cases where a bank becomes insolvent or bankrupt.

Rules Governing Depositor Protection

The CBA has established strict rules governing depositor protection, including:

  • Limits on the coverage of deposits within which a depositor is guaranteed to receive compensation
  • Varying limits depending on the denomination of the deposit and whether it is held in Armenian drams or foreign currency

Bank Secrecy

The report also touched on the importance of bank secrecy, highlighting that the disclosure of confidential information about customers is strictly prohibited except in specific circumstances prescribed by law.

Consequences of Violating Bank Secrecy Rules

Violations of these rules may result in:

  • Civil liability
  • Administrative penalties
  • Criminal liability

Conclusion

“We are pleased to see that our banking sector has adhered to these strict norms, ensuring a high level of transparency and trust among depositors,” said [Name], Governor of the CBA. “We will continue to monitor compliance with these regulations to ensure the stability and security of Armenia’s financial system.”

The report is available on the CBA’s website for further review.

Sources:

  • Central Bank of Armenia (CBA)
  • Deposit Guarantee Fund (DGF) of Armenia
  • Law on Combating Money Laundering and Terrorist Financing