Financial Institution Fraud Prevention in Azerbaijan: A Success Story

Azerbaijan has made significant strides in preventing financial institution fraud by following the Financial Action Task Force (FATF) recommendations partially and avoiding foreign sanctions. The country’s commitment to combating financial crimes has earned it recognition as a leader in this field.

The Central Bank’s Role

The Central Bank of the Republic of Azerbaijan, established in 1992, plays a crucial role in ensuring that credit institutions and leasing companies comply with anti-money laundering (AML) and counter-terrorism financing (CFT) legislation. The bank takes administrative and control measures to ensure employees and organizations adhere to AML/CFT requirements.

Enhancing Oversight

In 2016, the Financial Markets Supervision Authority (FMSA) was established to enhance oversight of the AML/CFT prevention system and licensing and supervision of the securities market, investment funds, and insurance. This move aimed to strengthen the country’s financial sector and prevent fraudulent activities.

The Financial Monitoring Services

In 2018, Financial Monitoring Services (FMS-AZ), Azerbaijan’s Financial Intelligence Unit, was established. Its primary responsibilities include:

• Centralized supervision and control
• Coordinating activities to deter money laundering and terrorism financing

The FMS-AZ works closely with other regulatory bodies to ensure a comprehensive approach to preventing financial institution fraud.

Success Story

Azerbaijan’s efforts have paid off, with the country avoiding foreign sanctions and being recognized for its commitment to combating financial crimes. The success story serves as an example for other countries to follow in their own fight against financial institution fraud.