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Assessment of Azerbaijan’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regime
Azerbaijan has made significant progress in its Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime. However, there are areas that require further improvement to ensure effective implementation.
Risk Understanding
- Azerbaijan has a good general understanding of money laundering risks.
- However, there are areas that require further analysis, including:
- Cash use in the economy
- Misuse of real estate
- Legal persons
Coordination and Policy Setting
- The Coordination Council has a range of expertise.
- There is adequate coordination at the policy level.
- However, operational cooperation among competent authorities is lacking.
Supervision
- Supervision over Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) was achieved to a negligible extent.
Use of Financial Intelligence
- Law Enforcement Agencies (LEAs) gather their own financial intelligence during independent investigations.
- However, they rarely use the Financial Monitoring System (FMS) to obtain financial intelligence, support investigations, or trace proceeds.
- The main causes for this include:
- Low-quality Suspicious Transaction Reports (STRs)
- Varying LEA appetite
- Limited understanding of the FMS functions
Technical Compliance
- Azerbaijan has achieved a commendable level of technical compliance with FATF’s six main recommendations.
Areas for Improvement
To further enhance its AML/CFT regime, Azerbaijan should focus on:
- Enhancing ML risk understanding
- Improving operational cooperation among competent authorities
- Strengthening supervision over FIs and DNFBPs
- Increasing use of financial intelligence from the FMS