AZERBAIJAN FACES FINANCIAL SANCTIONS AND PENALTIES OVER MONEY LAUNDERING CONCERNS

Azerbaijan’s economic growth has been accompanied by a surge in illicit activities, including money laundering, drug trafficking, and human trafficking. The country’s banking sector is seen as a conduit for money laundering and terrorist financing.

AZERBAIJAN’S AML REGIME UNDER SCRUTINY

Azerbaijan is categorized as “Partially Compliant” with the Financial Action Task Force (FATF) 40 Recommendations, despite efforts to address its Anti-Money Laundering (AML) deficiencies. The country has engaged in cooperation agreements with other nations to combat money laundering and terrorist financing.

KEY LAWS AND REGULATIONS IN AZERBAIJAN’S AML FRAMEWORK

The following laws and regulations play a crucial role in combating money laundering in Azerbaijan:

• Anti-Corruption Laws: Comprehensive legislation that addresses money laundering, with agencies like the Anti-Corruption Commission actively participating in policy formulation and enforcement.
• Financial Sector Oversight: Regulatory bodies like the Central Bank play a vital role in supervising financial institutions to ensure AML compliance.
• Taxation and Customs Control: The Ministry of Tax and the State Customs Committee have roles in monitoring financial activities for potential money laundering.

GOVERNMENT AND REGULATORY ROLE IN AML

Azerbaijan’s government bodies and institutions collaborate to combat money laundering, including:

• Anti-Corruption Commission: Shaping anti-corruption policy, coordinating interagency efforts, and analyzing the effectiveness of anti-money laundering initiatives.
• Ministry of National Security: Responsible for national security, also plays a role in AML efforts.
• Chamber of Auditors: Monitoring financial records and auditing processes contributes to AML activities.