Financial Crime World

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Azerbaijan Urged to Strengthen Anti-Money Laundering Regulations

Strasbourg, February 12, 2024

The Council of Europe’s anti-money laundering body, MONEYVAL, has called on Azerbaijan to further strengthen its measures to combat money laundering, the financing of terrorism, and the financing of proliferation.

Progress Made but Major Improvements Needed

According to a new report published today, Azerbaijan has made significant progress in strengthening its legal and institutional framework since 2014. However, major improvements are still needed to effectively investigate and prosecute money laundering cases. The report found that:

  • Domestic corruption
  • Tax-related crimes
  • Smuggling
  • Drug trafficking are the main money laundering predicate offenses in the country

Strengths and Concerns

MONEYVAL commended Azerbaijan for achieving a substantial level of effectiveness in countering terrorist financing and for demonstrating its ability to successfully investigate and convict terrorism offenses. However, the organization identified concerns about:

  • The implementation of targeted financial sanctions by the private sector
  • The adequacy of supervision of compliance

Recommendations for Improvement

The report highlighted the need for improved domestic cooperation at an operational level between law enforcement authorities and increased consistency in investigations and prosecutions. MONEYVAL called on Azerbaijan to:

  • Improve asset tracing: Conduct systematically parallel financial investigations in all proceeds-generating crimes, including terrorist financing
  • Strengthen supervision of financial institutions: Supervise designated non-financial businesses and professions more effectively
  • Ensure transparency of legal persons: Apply necessary identification and verification measures for politically exposed persons and beneficial owners

Follow-up Action Required

In response to the report’s findings, Azerbaijan will be required to report back on progress achieved in improving its anti-money laundering and counter-terrorism financing measures by December 2025.