Financial Crime World

Compliance Measures for Banks in Armenia Receive Mixed Reviews

Armenia’s efforts to combat money laundering and terrorist financing have yielded mixed results, according to a recent evaluation by the Financial Action Task Force (FATF). While the country has made significant progress in implementing technical requirements, it still faces challenges in several key areas.

Progress in Implementing Technical Requirements

The FATF report highlights Armenia’s advancements in:

  • National Cooperation and Coordination: Armenia has improved its national cooperation and coordination efforts.
  • Confiscation and Provisional Measures: The country has strengthened its confiscation and provisional measures framework.
  • Targeted Financial Sanctions related to Terrorism and Terrorist Financing: Armenia has implemented targeted financial sanctions related to terrorism and terrorist financing.

Areas of Concern

Despite the progress made, Armenia still faces challenges in several key areas:

  • Regulation and Supervision of Non-Profit Organizations: The lack of effective regulations and supervision of non-profit organizations remains a concern.
  • Reliance on Third Parties: Armenia’s efforts to combat money laundering have been criticized for being overly reliant on third parties.

Ratings and Recommendations

The FATF report provides specific ratings for various areas, including:

  • Compliant:
    • Regulation and supervision of financial institutions
    • Powers of supervisors
    • Mutual legal assistance
  • Partially Compliant, Largely Compliant, or Non-Compliant:
    • Correspondent banking
    • Money or value transfer services
    • New technologies
    • Wire transfers
    • Reliance on third parties
    • Internal controls
    • Foreign branches and subsidiaries
    • Reporting of suspicious transactions
    • Tipping-off and confidentiality
    • DNFBPs customer due diligence
    • DNFBPs other measures
    • Transparency and beneficial ownership of legal persons
    • Transparency and beneficial ownership of legal arrangements
    • Regulation and supervision of DNFBPs
    • Financial intelligence units
    • Responsibilities of law enforcement and investigative authorities
    • Powers of law enforcement and investigative authorities
    • Cash couriers
    • Statistics
    • Guidance and feedback
    • Sanctions
    • International instruments
    • Mutual legal assistance
    • Freezing and confiscation
    • Extradition
    • Other forms of international cooperation

Overall, while Armenia has made progress in implementing the FATF recommendations, there is still much work to be done to ensure that the country’s financial system is adequately protected against money laundering and terrorist financing.