Azerbaijan Strengthens Money Laundering Defenses: MONEYVAL Report

Date: March 20, 2023

Azerbaijan’s Progress Amid International Scrutiny

In response to international scrutiny, the Republic of Azerbaijan has taken decisive actions to improve its legal framework against money laundering and terrorist financing. Following an on-site visit by the Council of Europe’s Anti-Money Laundering Committee (MONEYVAL) between March 1 and 15, 2023, a report has been released, commending Azerbaijan’s advancements.

Commendable Advancements

The MONEYVAL report acknowledges significant improvements in Azerbaijan’s legal and regulatory anti-money laundering and counter-terrorist financing (AML/CFT) framework. These advancements include:

1. Enactment of a new law on legal entities
2. Expansion of the Financial Intelligence Unit (FIU) mandate

Areas of Concern

Despite these advancements, certain challenges remain:

1. Timely reception and analysis of suspicious transaction reports at the FIU
2. Customer due diligence measures, especially in high-risk sectors

MONEYVAL Recommendations

In response to these issues, MONEYVAL has issued the following recommendations:

1. Improve risk-based approach to supervision and customer due diligence
2. Establish a regulatory and supervisory framework for high-risk professions (lawyers and real estate agents)
3. Prevent Politically Exposed Persons (PEPs) from opening anonymous accounts
4. Implement more robust customer due diligence measures for wire transfers and online transactions

Future Actions

By implementing these recommendations, Azerbaijan aims to maintain a strong international reputation and further strengthen its AML/CFT system.