Financial Crime World

Metals and Stones, Lawyers and Accountants in Armenia Under Scrutiny

A recent report has raised concerns over the lack of effective supervision of lawyers, accountants, real estate agents, and dealers in precious metals and stones in Armenia. The Financial Monitoring Center (FMC) has been designated as the supervisor of these sectors, but no supervisory regime has been implemented yet.

Supervision Lacking

The report found that while the Central Bank of Armenia (CBA) demonstrates adequate understanding of money laundering and terrorist financing (ML/FT) risks, its practices and procedures are not risk-based. The CBA relies on the results of a national risk assessment and cooperation with the FMC, but does not conduct formal risk assessments of individual institutions or sectors.

Risk-Based Supervision

  • The CBA’s practices and procedures are not risk-based.
  • Supervisors do not have a comprehensive understanding of ML/FT risks and obligations.

Sanctions Ineffective

The report also noted that supervisory authorities do not have a sanctions framework in place, and sanctions are rarely used by supervisors for ML-related violations. The CBA’s sanctioning regime has been ineffective.

Transparency Issues

In terms of transparency, the report found that all legal persons are required to be registered, and basic information is publicly available. However, there is no formal mechanism for monitoring the adequacy, accuracy, or currency of this information.

Recommendations for Armenia

  • Deepen its analysis of ML risks.
  • Re-evaluate vulnerabilities faced by the country.
  • Develop a national law enforcement policy to investigate and prosecute ML offenses.
  • Improve use of intelligence in financial investigations.
  • Provide specialized training for law enforcement authorities.

Key Takeaways

  • The FMC has been designated as the supervisor of lawyers, accountants, real estate agents, and dealers in precious metals and stones, but no supervisory regime has been implemented yet.
  • The CBA’s practices and procedures are not risk-based, and supervisors do not have a comprehensive understanding of ML/FT risks and obligations.
  • Sanctions are rarely used by supervisors for ML-related violations, and the CBA’s sanctioning regime has been ineffective.
  • There is no formal mechanism for monitoring the adequacy, accuracy, or currency of beneficial ownership information.