Armenia’s Central Bank Cracks Down on Money Laundering and Terrorism Financing with New Regulations

The Central Bank of the Republic of Armenia has issued a new law to strengthen the nation’s defenses against money laundering and terrorism financing.

Key Concepts and Entities

• Reporting entities: Banks, credit organizations, foreign currency and securities traders, cash transfer providers, securities market participants, insurance companies, insurance brokers, pawnshops, real estate agents, notaries, attorneys, independent auditors, dealers in precious metals, dealers in precious stones, and dealers in artworks.
• Financially regulated entities: Financial institutions, including banks and securities market participants.
• Non-financially regulated entities: Persons and businesses not covered under ‘financially regulated entities.’
• Authorized Body: Central Bank of the Republic of Armenia.
• Suspicious transactions or business relationships: Transactions and relationships suspected of involving proceeds of crime, linked to terrorism financing, or suspected terrorists.

Reporting Duties for Entities

Reporting entities, in accordance with the law, are mandated to recognize and prevent suspicious transactions or business relationships. They must submit information on these transactions to the Central Bank, including reporting on beneficial owners, transaction details, and reasons for suspicion.

Transactions Subject to Reporting

Reporting entities must file reports to the Central Bank for transactions above a certain threshold, real estate transactions above a certain price, and suspicious transactions or business relationships. Reporting requirements vary depending on the type of entity.

Threshold Transactions

• Banks: Transactions exceeding AMD 1,500,000.
• Insurance companies, insurance brokers, and dealers in precious stones: Transactions exceeding AMD 5,000,000.
• Real estate agents: Transactions exceeding AMD 10,000,000.
• Others: Transactions exceeding AMD 2,000,000.

Suspicious Transactions

Reporting entities must report all transactions or business relationships suspected of being related to money laundering, terrorism financing, or suspected terrorists.

Penalties and Sanctions

The law imposes sanctions on reporting entities, legal persons, and financial institutions for non-compliance with reporting requirements or non-implementation of measures against money laundering and terrorism financing. These penalties include fines and license revocation.

Support and Guidance

The Central Bank provides guidelines and typologies to help reporting entities in suspecting and reporting suspicious transactions or business relationships. Reporting entities may also establish their own criteria for identifying and reporting suspicious activities.

Regular Audits

The Central Bank conducts internal and external audits of reporting entities to evaluate their compliance with the regulations and ensure proper measures to prevent money laundering and terrorism financing.

Conclusion

Armenia’s Central Bank’s new law aims to strengthen the country’s stance against money laundering and terrorism financing. The regulation covers various industries and businesses, imposing reporting requirements and penalties for non-compliance. The Central Bank’s guidelines and support will help reporting entities identify and report suspicious activities effectively.