Financial Crime World

Anti-Money Laundering Laws in Azerbaijan Face Scrutiny, Report Reveals

Strasbourg, February 12, 2024 - A new report published today by the Council of Europe’s anti-money laundering body, MONEYVAL, calls on Azerbaijani authorities to further strengthen measures to combat money laundering, terrorist financing, and proliferation financing.

Compliance with International Standards

The report provides a comprehensive assessment of Azerbaijan’s compliance with standards set by the Financial Action Task Force (FATF). Since 2014, Azerbaijan has taken steps to strengthen its legal and institutional framework to tackle money laundering, terrorist financing, and has begun implementing an effective anti-money laundering system.

Progress Made

  • Azerbaijan has made significant progress in countering terrorist financing, with authorities successfully investigating TF offenses and securing convictions.
  • The country also demonstrated a substantial level of effectiveness in international cooperation.

Room for Improvement

However, the report found major improvements are needed to effectively investigate and prosecute money laundering cases. While law enforcement agencies have access to financial intelligence, they require increased domestic cooperation at an operational level. Additionally, more consistency is required in investigations and prosecutions, with most convictions resulting from self-laundering cases.

Concerns and Recommendations

Targeted Financial Sanctions

  • The report highlights concerns regarding the implementation of targeted financial sanctions by the private sector.
  • MONEYVAL calls on authorities to address these issues promptly.

Non-Profit Organisations (NPO) Sector

  • Azerbaijan has a sound legal framework for implementing targeted financial sanctions, but MONEYVAL notes that preventive measures are needed to mitigate risks in the NPO sector.

Supervision of Financial Institutions and Designated Non-Financial Businesses and Professions

  • The report highlights concerns regarding beneficial ownership transparency and enforcement powers for breaches of professional anti-money laundering obligations.
  • Azerbaijan has taken steps to prevent misuse of legal persons, but more proactive measures are required to ensure transparency. Reporting entities should apply necessary identification and verification measures in cases involving politically exposed persons and beneficial owners.

Action Plan

The country will report back to MONEYVAL on progress achieved in improving the implementation of its anti-money laundering and counter-terrorist financing measures by December 2025.