Financial Crime World

Azerbaijan Urged to Strengthen Anti-Money Laundering Measures, Council of Europe Says

The Council of Europe’s anti-money laundering body, MONEYVAL, has released a new report calling on Azerbaijan to take further steps to combat money laundering and terrorist financing.

Progress Made, But More Work Needed

Azerbaijan has made significant progress in strengthening its legal and institutional framework to tackle money laundering and terrorist financing since 2014. The country has demonstrated a fair understanding of ML/TF risks, identifying domestic corruption, tax-related crimes, smuggling, and drug trafficking as the main predicate offenses.

Areas for Improvement

However, the report highlights several areas where Azerbaijan can improve its efforts:

  • Pursuing Investigations and Prosecutions: Law enforcement authorities have access to financial intelligence but often lack operational cooperation from other agencies. Investigations and prosecutions require more consistency, with most cases involving self-laundering rather than organized crime.
  • Confiscating Criminal Proceeds: While Azerbaijan has made progress in confiscating criminal proceeds, more needs to be done to trace assets by conducting parallel financial investigations in all predicate crimes, including terrorist financing.
  • Targeted Financial Sanctions and Supervision of Compliance: The private sector has not been adequately trained on proliferation financing issues, and supervisors have not considered these risks in their work.

Recommendations

MONEYVAL has made several recommendations for Azerbaijan to strengthen its anti-money laundering measures:

  • Apply Preventive Measures: Apply preventive measures to mitigate the risk of non-profit organizations being abused for terrorist financing purposes.
  • Strengthen Supervision: Strengthen supervision of financial institutions and designated non-financial businesses and professions.
  • Risk-Based Approach: Take a risk-based approach to supervision, improve enforcement and sanctioning powers, and increase transparency in legal persons’ ownership structures.

Next Steps

Azerbaijan will report back to MONEYVAL on its progress in December 2025. The country has made important steps in preventing the misuse of legal persons but needs to be more proactive in ensuring their transparency.

By implementing these recommendations, Azerbaijan can further strengthen its anti-money laundering measures and prevent the misuse of its financial system for illegal activities.