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Armenia’s Money Laundering Risks Not Fully Assessed, Report Finds

Yerevan, Armenia - A recent report by an evaluation team has raised concerns that Armenia’s money laundering (ML) risks may not be fully understood or assessed. The report highlights several areas of concern, including the lack of coordination among national authorities and a limited understanding of ML risks in certain sectors.

Areas of Concern

The report notes that while the country’s Interagency Committee on the Fight against Counterfeiting of Money, Fraud in Plastic Cards and Other Payment Instruments, Money Laundering and Terrorism Financing (Interagency Committee) has developed an action plan to address ML/FT risks identified in the National Risk Assessment (NRA), there are still gaps in understanding and addressing these risks.

• Lack of coordination between law enforcement agencies, resulting in a limited ability to share intelligence and information.
• Limited understanding of ML risks in certain sectors, such as real estate and cash-intensive businesses.
• Financial institutions not consistently conducting their own risk assessments, which can result in inadequate measures being taken to prevent ML.

Recommendations for Improvement

The report recommends several improvements to combat money laundering in Armenia:

• Improve coordination among national authorities to share intelligence and information.
• Increase awareness of ML risks in certain sectors, such as real estate and cash-intensive businesses.
• Prioritize financial investigations over predicate crimes.
• Enhance reporting from higher-risk entities, such as money remittance providers, casinos, real estate agents, and notaries.

Financial Monitoring Centre (FMC)

The FMC has been praised for its efforts in collecting and analyzing financial intelligence. However, the report notes that there is still room for improvement:

• Reporting entities may be overlooking certain suspicious transactions and/or business activities due to an overreliance on typologies and pre-defined indicators issued by the FMC.
• There is a lack of reporting from certain higher-risk entities.

Linking Money Laundering to Predicate Criminality

The report highlights the importance of linking money laundering to predicate criminality, such as tax evasion, corruption, and cybercrime:

• The lack of attention given to these types of ML cases is a concern, as they can have significant financial implications for the country.
• Tax evasion schemes are often used by criminals to launder money, but it appears that this risk is not being fully addressed in Armenia.
• Corruption scandals can involve large sums of money and require sophisticated laundering techniques, but there is little evidence that these cases are being pursued aggressively.

Conclusion

The report concludes that Armenia’s efforts to combat money laundering are not fully commensurate with the country’s ML risks. The lack of coordination among national authorities, limited understanding of ML risks in certain sectors, and inadequate reporting from higher-risk entities are all areas that require improvement. A more holistic approach is needed to combat money laundering in Armenia, one that takes into account the country’s unique risks and challenges.