Financial Crime World

Consequences of Financial Crime in Azerbaijan Revealed in New Report

A comprehensive assessment by the Council of Europe’s anti-money laundering body MONEYVAL has highlighted significant areas for improvement in Azerbaijan’s efforts to combat money laundering, terrorism financing, and proliferation financing.

Key Findings

Since 2014, when MONEYVAL last evaluated Azerbaijan, the country has taken steps to improve its legal and institutional framework to address anti-money laundering (AML) and combating the financing of terrorism (CFT). However, the report notes that major improvements are needed to pursue the investigation and prosecution of money laundering effectively.

Effectiveness in Countering Terrorist Financing

Azerbaijan has achieved a substantial level of effectiveness in countering terrorist financing, with seven convictions secured during the reference period. The authorities have also demonstrated their ability to investigate and provide international cooperation on TF offences.

Main Money Laundering Predicate Offences

Domestic corruption, tax-related crimes, smuggling, and drug trafficking are identified as the main money laundering predicate offences.

Challenges in Implementing Targeted Financial Sanctions

While Azerbaijan has a sound legal framework in place for implementing targeted financial sanctions without delay, concerns exist about the implementation of those measures by the private sector and the adequacy of supervision of compliance. Additionally, the country must do more to trace assets by conducting systematically parallel financial investigations in all proceeds-generating crimes.

Recommendations

MONEYVAL calls on Azerbaijani authorities to:

  • Swiftly apply preventive, targeted, and proportionate risk mitigation measures for Non-Profit Organisations (NPO) sector to prevent TF purposes.
  • Fundamental improvements in supervision of financial institutions and designated non-financial businesses and professions.

Progress and Next Steps

Azerbaijan will report back to MONEYVAL on progress achieved in improving its AML/CFT measures by December 2025. The country has taken important steps to prevent the misuse of legal persons, but more proactive measures are required to ensure transparency of legal persons.

Consequences of Financial Crime

The consequences of financial crime in Azerbaijan have significant implications for the country’s economy and stability. The report highlights the need for Azerbaijani authorities to strengthen their efforts to combat money laundering, terrorism financing, and proliferation financing to prevent these crimes from undermining the country’s development.