Financial Crime World

Azerbaijan’s Strides in Combating Money Laundering and Terrorist Finance: MONEYVAL Assessment

Amidst growing global concerns over financial crimes, Azerbaijan has taken significant steps to strengthen its regulatory framework in the fight against money laundering (ML) and terrorist financing (TF). Here’s a comprehensive analysis of Azerbaijan’s Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) system based on the latest Mutual Evaluation Report (MER) by the Council of Europe’s Committee of Experts on the Counteraction to Money Laundering and Financing of Terrorism (MONEYVAL).

Assessment Overview

  • The on-site visit by the MONEYVAL team between March 1 and 15, 2023, assessed Azerbaijan’s level of compliance with the Financial Action Task Force (FATF) Recommendations.
  • The report provides critical recommendations on how to further bolster Azerbaijan’s financial defenses against ML/TF.

Progress since the last evaluation

Since the last evaluation in 2012, Azerbaijan’s AML/CFT measures have shown progress in several key areas. However, some challenges remain:

  1. A need to enhance risk-based supervision
  2. Challenges related to the effectiveness of the financial intelligence unit (FIU)
  3. The availability of frozen funds and confiscated assets

Report’s Recommendations

Fully operational ML/TF risk assessment framework

Continued efforts are necessary to ensure a fully operational and effective ML/TF risk assessment framework in Azerbaijan.

Strengthening DNFBP regulatory framework

Strengthen the regulatory framework for Designated Non-Financial Businesses and Professions (DNFBPs) to prevent the misuse of these sectors for ML/TF.

Beneficial ownership transparency

Implement increased attention to beneficial ownership transparency.

Central register for beneficial owners

Implementing a central register for beneficial owners is crucial.

Cooperation and memberships

Azerbaijan’s commitment to international cooperation in the fight against ML/TF is commendable:

  • Membership in various international organizations such as the European Bank for Reconstruction and Development (EBRD)
  • Membership in the FATF

Conclusion

  1. This comprehensive assessment by MONEYVAL highlights both the progress and challenges faced by Azerbaijan in its efforts to strengthen its AML/CFT system and combat money laundering and terrorist financing.
  2. The recommendations put forth in the report provide a clear roadmap for further improvement and underscore the importance of a continued focus on this critical issue.