Armenia’s Money Laundering Problem: What You Need to Know

A recent report has shed light on Armenia’s struggles with money laundering, revealing a financial system that remains vulnerable to illicit activities.

Banking Sector Dominance

The assessment highlights the country’s small and bank-dominated economy, where foreign ownership plays a significant role in the banking sector. Total assets of the banking sector account for approximately 91% of the assets in the financial system, making it a prime target for money launderers. The non-bank financial sector, on the other hand, plays a relatively small part in financial intermediation.

Foreign Ownership and Money Laundering

The report notes that most banks are domestically owned, but foreign presence is substantial. This mix of domestic and international ownership creates an environment where illegal activities can easily be disguised as legitimate transactions.

What is Money Laundering?

Money laundering is the process of disguising the source of illegally obtained funds to make them appear legitimate. It is often linked to other serious crimes such as terrorism financing, drug trafficking, and corruption.

Lack of Effective Anti-Money Laundering Measures

In Armenia’s case, the lack of effective anti-money laundering measures has allowed criminals to exploit the financial system for their own gain.

Solution: Implementing Robust AML/CFT Policies

The report emphasizes the importance of implementing robust anti-money laundering and combating the financing of terrorism (AML/CFT) policies to prevent the misuse of Armenia’s financial system. It calls for enhanced cooperation between law enforcement agencies, regulatory bodies, and financial institutions to detect and prevent money laundering activities.

Government Efforts

Armenia’s government has acknowledged the need to strengthen its AML/CFT regime and has taken steps to implement new laws and regulations aimed at combating money laundering and terrorist financing. However, more needs to be done to ensure that the country’s financial system is fully protected from illegal activities.

Conclusion

As the global fight against money laundering continues, Armenia must remain vigilant in its efforts to prevent the misuse of its financial system. By implementing effective AML/CFT measures, the country can protect its reputation and prevent illegal activities from thriving within its borders.