Financial Crime World

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Azerbaijan Urged to Strengthen Measures Against Money Laundering and Terror Financing

The Council of Europe’s anti-money laundering body, MONEYVAL, has called on Azerbaijan to further strengthen its measures against money laundering (ML), the financing of terrorism (TF) and proliferation. The report highlights several areas where improvements are needed to combat these threats.

Improvements Needed

Since 2014, Azerbaijan has taken steps to strengthen its legal and institutional framework to tackle ML/TF. However, MONEYVAL notes that major improvements are still required to pursue the investigation and prosecution of money laundering effectively. The law enforcement authorities have access to financial intelligence but lack domestic cooperation at an operational level.

  • Improvements are needed in tracing assets by conducting parallel financial investigations in all proceeds-generating crimes, including TF.
  • Azerbaijan’s private sector has concerns about implementing targeted financial sanctions and the adequacy of supervision of compliance.

Supervision and Risk Management

MONEYVAL also highlights the need for Azerbaijan to improve its supervision of financial institutions and designated non-financial businesses and professions. The understanding of risks varies amongst supervisors, and a risk-based approach in supervision needs to be strengthened.

  • Supervisors should apply a consistent risk-based approach to identify and assess potential ML/TF risks.
  • A clear framework is needed to guide supervisors in their decision-making processes.

Transparency and Reporting

The report commends Azerbaijan’s efforts to prevent the misuse of legal persons but notes that more proactive measures are required to ensure transparency. Reporting entities should apply necessary identification and verification measures for politically exposed persons and beneficial owners.

  • Reporting entities should identify and verify the identity of beneficial owners and politically exposed persons.
  • A clear framework is needed to guide reporting entities in their reporting obligations.

Next Steps

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

About MONEYVAL

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) is a monitoring body of the Council of Europe that evaluates compliance with international standards to combat ML/TF and proliferation. The body makes recommendations to national authorities in respect of necessary improvements to their anti-money laundering and counter-terrorist financing systems.