Financial Crime World

The Current State of Crime and Governance in Armenia

Armenia’s complex situation can be understood by examining its various aspects. This article will delve into the country’s criminal landscape, leadership and governance, criminal justice and security, economic and financial environment, and civil society and social protection.

Criminal Activity

Declining Influence of Organized Crime Groups

  • Armenia is reported to have an Armenian mafia divided into separate clans or brotherhoods (called ‘akhperutyuns’), which control parts of the capital Yerevan.
  • However, their influence has declined since 2018.
  • Professional criminals who enjoy elite positions within organized crime groups have been active in Armenia but saw a decline in influence since the early 2000s.

Limited Activities and Transit Country Status

  • Armenian criminal networks remain limited due to a lack of resources.
  • The country is only a transit country for illicit trade, further limiting its scope.

Leadership and Governance

Hybrid or Transitional Regime with Strong Russian Influence

  • Armenia is identified as a hybrid or transitional regime with a strong influence from Russia.
  • The government has continued to implement reforms prioritizing rule of law and anti-corruption.
  • However, state-embedded corruption remains prevalent.

Oligarchs’ Close Relationship with Political and Business Actors

  • There are concerns about cronyism and influence peddling due to the close relationship between oligarchs and political and business actors.

Criminal Justice and Security

Lacking Independence and Corruption Issues

  • Armenia’s judicial system lacks independence, with some judicial bodies heavily populated by politically connected people.
  • Corruption within the judicial system is a major concern, and torture and ill-treatment in custody remain problematic.
  • The penitentiary system is plagued by issues such as prisoner abuse and poor living conditions.

Economic and Financial Environment

  • Armenia has strengthened its anti-money laundering (AML) legal framework in recent years and made progress in money-laundering risk and threat assessment.
  • However, there are still AML risks within the Armenian banking system, particularly due to the use of Iranian and Russian criminal groups.

Civil Society and Social Protection

Robust Framework for Modern Slavery Victims

  • The government has a fairly robust framework in place to support victims of modern slavery.
  • However, victim and witness support measures appear insufficient.

Lack of Organizations Focused on Policing, Justice System, and Organized Crime

  • There is a lack of civil society organizations dedicated to issues like policing, the criminal justice system, and fighting organized crime.

Polarized Media Landscape

  • The media landscape in Armenia is polarized, and recent incidents of physical violence against journalists suggest that political influence affects their protection.