AZERBAIJAN JOINS THE FIGHT ON FINANCIAL CRIME: BANKS IMPROVE IN COMBATING MONEY LAUNDERING AND TERRORIST FINANCING

A New Era in Combating Financial Crime

Azerbaijan’s banking industry is making significant strides in combating financial crime, with the Central Bank of Azerbaijan working hard to modernize the country’s financial sector. In a major milestone achieved with assistance from USAID, the Anti-Money Laundering and Combating the Financing of Terrorism bill was successfully passed in 2009, establishing a Financial Monitoring Service (FFMS) responsible for enforcing new financial sector requirements.

The Importance of Effective Regime

A well-functioning regime to combat financial crime is essential in today’s global market. However, this was not achieved with the mere passage of the law. The FFMS faced the challenge of enforcing legislation poorly understood by most of Azerbaijan’s bankers, particularly those outside of Baku.

Training and Socialization

With assistance from USAID, the FFMS has undertaken a series of trainings to socialize the new law, both in Baku and across the country. These training sessions were crucial in educating financial sector workers on key aspects of the legislation.

Key Aspects Covered in Trainings

• Recognizing suspicious transactions
• Fulfilling new “know-your-customer” requirements
• Understanding the link between money laundering and criminal or terrorist activity
• Discerning when to report transactions to national authorities

Success Stories

The second such training was held on October 5th, 2010, in the regional city of Sheki in northwestern Azerbaijan. Thirty representatives attended from institutions providing financial services in this region, including banks, post offices, and money transfer services.

Participant Feedback

Mr. Abdullali, Head Accountant of Gun nay Bank’s Sheki branch, stated, “Today we learned about very strict identification requirements for customers and their representatives. Now we understand our responsibility. We did not realize the seriousness of these procedures. It is very important for Azerbaijan to have such a fight against money laundering.”

Progress and Recognition

Due to this work, on October 22nd, 2010, Azerbaijan was removed from the inter-governmental Financial Action Task Force’s watch list, just ten months after its first Financial Monitoring Service was created.

Conclusion

USAID’s assistance in drafting legislation and training financial sector workers has been instrumental in Azerbaijan’s progress in combating financial crime. As Mr. Kerimov noted, “The Financial Monitoring Service will continue to work aggressively with the banking community to ensure that all institutions are aware of their responsibilities and are taking necessary steps to prevent money laundering and terrorist financing.”