Azerbaijan Urged to Step Up Investigations and Prosecutions of Money Laundering
A Call for Improved Measures to Combat Money Laundering and Terrorism Financing
The Council of Europe’s MONEYVAL body has called upon Azerbaijan to strengthen its measures to combat money laundering and the financing of terrorism. According to a recent report, while Azerbaijan has taken several actions to improve its legal and institutional framework, major improvements are needed to effectively pursue investigations and prosecutions of money laundering.
Key Findings and Recommendations
- Effectiveness in Countering Terrorist Financing: MONEYVAL found that Azerbaijan has achieved a substantial level of effectiveness in countering terrorist financing, with seven convictions secured during the reference period.
- Investigations and Prosecutions of Money Laundering: The report noted that most prosecutions and convictions related to money laundering have pertained to self-laundering, with legal persons not being investigated for money laundering.
- Implementation of Targeted Financial Sanctions: Concerns were identified about the implementation of targeted financial sanctions by the private sector and the adequacy of supervision of compliance.
- Supervisory Arrangements: MONEYVAL called on Azerbaijan to improve its supervisory arrangements, including strengthening enforcement and sanctioning powers for breaches of professional anti-money laundering obligations.
Progress Required
Azerbaijan has been commended for its capacity to provide and seek constructive assistance in international cooperation. However, more proactive measures are required to ensure the transparency of legal persons. The report recommended that reporting entities apply necessary identification and verification measures in case of politically exposed persons and beneficial owners.
Timeline for Improvement
The Azerbaijani authorities have been asked to report back to MONEYVAL on progress achieved in improving the implementation of its anti-money laundering and counter terrorist financing measures by December 2025.
Conclusion
MONEYVAL is a monitoring body of the Council of Europe that evaluates compliance with international standards to combat money laundering, terrorism financing, and proliferation financing. The body assesses 33 states and territories and makes recommendations to national authorities on necessary improvements to their anti-money laundering systems.
Azerbaijan has been praised for its efforts to prevent the misuse of legal persons, but more proactive measures are required to ensure transparency. MONEYVAL has called on Azerbaijan to apply preventive, targeted, and proportionate risk mitigation measures in the non-profit sector. The report also noted that Azerbaijan had conducted an assessment of the risk of Non-Profit Organisations (NPO) sector being abused for terrorism financing purposes, but MONEYVAL called on the authorities to swiftly apply preventive measures while ensuring legitimate NPO activities are not disrupted or discouraged.
Overall, Azerbaijan has been asked to strengthen its supervisory arrangements and improve enforcement and sanctioning powers for breaches of professional anti-money laundering obligations. The report noted that Azerbaijan had a sound legal framework in place for implementing targeted financial sanctions, but concerns were identified about the implementation by the private sector and adequacy of supervision of compliance.