Financial Crime World

Armenian Banks Must Comply with Strict AML, CFT, and Depositor Protection Requirements

Date: March 10, 2023

The Central Bank of Armenia (CBA) has implemented a comprehensive framework to ensure compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements for Armenian banks. These stringent regulations aim to prevent money laundering, terrorist financing, and protect depositors.

AML/CFT Requirements

Armenian banks are required to have internal policies and procedures in place to detect and prevent suspicious transactions. Key obligations include:

  • Conducting customer due diligence at the initiation of a business relationship and during ongoing service provision
  • Evaluating potential risks associated with transactions and business relationships
  • Reporting suspicious transactions and transactions subject to mandatory reporting
  • Suspending or terminating transactions deemed impossible to comply with Know-Your-Customer (KYC) requirements
  • Freezing assets owned or controlled by persons related to terrorism or weapons of mass destruction

Depositor Protection

The Deposit Guarantee Fund of Armenia provides protection for depositors in the event of a bank insolvency or bankruptcy. Key features include:

  • A compensation guarantee covering deposits up to AMD 16 million (approximately USD $30,000) for Armenian dram-denominated deposits
  • A separate guarantee for foreign currency-denominated deposits and mixed currency deposits
  • Exceptions apply in cases where depositors are bank managers, significant shareholders, or have disclaimed their ownership rights

Bank Secrecy

Armenian banks are required to maintain secrecy regarding customer information, including account details, transaction records, and trade secrets. Disclosure of such information is generally prohibited, unless authorized by law or with the customer’s consent.

In a statement, the CBA emphasized the importance of compliance with these regulations, stating:

“The protection of depositors’ rights and the prevention of money laundering and terrorist financing are among our top priorities. We will continue to work closely with banks to ensure that they meet these requirements and maintain public trust in the financial system.”

For more information on AML/CFT, depositor protection, and bank secrecy regulations in Armenia, please contact the CBA or consult with a qualified financial advisor.