Financial Crime World

Assessment Report: Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) in Azerbaijan

Executive Summary

This report assesses the effectiveness of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures in Azerbaijan. The assessment covers various aspects, including regulatory frameworks, financial intelligence units, cooperation between law enforcement agencies, and challenges faced by the country.

Regulatory Framework

Azerbaijan has a comprehensive legal framework for AML/CFT, with relevant laws and regulations in place. The main pieces of legislation are:

  • The Law on Combating Money Laundering and Terrorist Financing: This law sets out the basic principles and requirements for AML/CFT.
  • The Regulation on Licensing of Credit Organizations and Insurance Companies: This regulation establishes the licensing requirements for credit organizations and insurance companies.
  • The Instruction on Implementation of the International Standards on Combating Money Laundering and Terrorist Financing: This instruction provides guidance on the implementation of international standards.

Financial Intelligence Units

Azerbaijan’s financial intelligence unit (FIU) is responsible for gathering, analyzing, and disseminating financial intelligence. The FIU has:

  • Access to sensitive information: The FIU has access to sensitive information from various sources, including banks, credit organizations, and other financial institutions.
  • Advanced analytical capabilities: The FIU has advanced analytical capabilities to identify suspicious transactions and patterns.

Cooperation between Law Enforcement Agencies

Cooperation between law enforcement agencies (LEAs) and the FIU is essential for effective AML/CFT. In Azerbaijan:

  • Regular meetings and briefings: LEAs and the FIU hold regular meetings and briefings to share information and coordinate efforts.
  • Joint investigations: LEAs and the FIU conduct joint investigations into suspicious transactions and patterns.

Challenges

Despite progress in AML/CFT measures, Azerbaijan faces challenges:

  • Lack of resources: Azerbaijan lacks sufficient resources, including funding and expertise, to effectively implement AML/CFT measures.
  • Corruption: Corruption remains a significant challenge for Azerbaijan’s AML/CFT efforts.

Conclusion

Azerbaijan has made progress in implementing effective AML/CFT measures. However, the country faces challenges related to lack of resources and corruption. To address these challenges, Azerbaijan should:

  • Increase funding and expertise: Azerbaijan should increase funding and expertise for its AML/CFT efforts.
  • Improve cooperation between LEAs and the FIU: Azerbaijan should improve cooperation between LEAs and the FIU to enhance effectiveness.

By addressing these challenges, Azerbaijan can strengthen its AML/CFT measures and prevent money laundering and terrorist financing.