Financial Crime World

Armenia: Banks Must Comply with Anti-Money Laundering and Combating the Financing of Terrorism Regulations

Introduction

Yerevan, Armenia - In a bid to combat money laundering and the financing of terrorism, Armenian banks are required to adhere to strict regulations governing anti-money laundering (AML) and combating the financing of terrorism (CFT).

AML/CFT Requirements for Banks

According to a recent report by Concern-Dialog Law Firm, banks in Armenia must:

  • Conduct due diligence on transactions and business relationships
  • Report suspicious transactions
  • Freeze assets linked to terrorist organizations
  • Reject or cease transactions if there is no feasible way to achieve the Know Your Customer (KYC) process requirements or if doubts remain over the transaction
  • Report all transactions subject to mandatory reporting, including wire transfers above AMD 20 million and cash transactions above AMD 5 million

Suspicious Transactions

The report emphasizes that transactions or business relationships are considered suspicious if there is suspicion or reasonable grounds to suspect that the property is related to:

  • Criminal activity
  • Terrorism
  • The proliferation of weapons of mass destruction

Depositor Protection

In the event of a bank insolvency or bankruptcy, Armenian depositors can rely on the Deposit Guarantee Fund of Armenia (the “Fund”), which provides compensation for deposits up to:

  • AMD 16 million in Armenian dram
  • AMD 7 million in foreign currency

However, certain categories of depositors, including:

  • Bank managers
  • Significant shareholders

are excluded from this guarantee.

Bank Secrecy

Armenian banks are also subject to strict regulations governing bank secrecy, which prohibits the disclosure of customer information without consent or as required by law. However, there are exceptions, including cases where a customer discloses their own information or where a bank provides information to:

  • Regulatory bodies
  • Courts

The report warns that violating bank secrecy rules can result in:

  • Criminal liability
  • Civil liability for damages