Complying with Global Standards

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Complying with Global Standards: Best Practices for Financial Crime Compliance in Armenia

Armenia has made significant strides in implementing the Financial Action Task Force (FATF) Recommendations, a set of international standards aimed at preventing money laundering and terrorist financing. However, as demonstrated by the 2016 Mutual Evaluation Report, there is still room for improvement.

Assessing Risk and Applying a Risk-Based Approach

Armenia has been found largely compliant in assessing risk and applying a risk-based approach (R.1). This means that the country’s financial institutions are able to identify, assess, and mitigate potential risks associated with money laundering and terrorist financing.

However, there is still scope for improvement. Financial institutions must ensure that their risk assessments are thorough and take into account all relevant factors, including customer behavior and geographic location.

National Cooperation and Coordination

Armenia has also demonstrated largely compliant performance in national cooperation and coordination (R.2). This includes effective communication and collaboration between government agencies, financial institutions, and other stakeholders to prevent and detect money laundering and terrorist financing.

However, there is still a need for more robust coordination mechanisms to ensure that all relevant parties are working together effectively to combat financial crime.

Money Laundering Offence

Armenia has been found largely compliant in establishing a money laundering offence (R.3). This includes the creation of a clear and comprehensive legal framework that defines and prohibits money laundering activities.

However, there is still a need for more effective enforcement mechanisms to ensure that those who engage in money laundering are held accountable.

Confiscation and Provisional Measures

Armenia has also demonstrated largely compliant performance in confiscating proceeds of crime (R.4). This includes the establishment of effective procedures for freezing, seizing, and confiscating assets related to money laundering and terrorist financing.

However, there is still a need for more efficient and effective mechanisms to ensure that confiscated assets are recovered and utilized to prevent future financial crimes.

Terrorist Financing Offence

Armenia has been found compliant in regulating terrorist financing (R.5). This includes the creation of a clear and comprehensive legal framework that defines and prohibits terrorist financing activities.

However, there is still a need for more effective enforcement mechanisms to ensure that those who engage in terrorist financing are held accountable.

Reportable Counterparties

Armenia has been found compliant in implementing reportable counterparty requirements (R.18). This includes the establishment of effective procedures for identifying and reporting transactions involving counterparties who are subject to international sanctions or other restrictions.

However, there is still a need for more robust regulations to prevent reportable counterparties from engaging in money laundering or terrorist financing activities.

Enhanced Customer Due Diligence

Armenia has demonstrated compliant performance in implementing enhanced customer due diligence (R.17). This includes the establishment of effective procedures for identifying and managing customers who pose a higher risk of money laundering or terrorist financing.

However, there is still a need for more robust regulations to ensure that financial institutions are conducting thorough enhanced customer due diligence and identifying potential risks associated with these customers.

International Cooperation

Armenia has demonstrated compliant performance in cooperating with foreign governments (R.19). This includes the establishment of effective procedures for sharing information and coordinating efforts with international partners to combat financial crime.

However, there is still a need for more robust regulations to ensure that Armenia is working effectively with its international partners to prevent and detect money laundering and terrorist financing.

Implementation

Armenia has demonstrated compliant performance in implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) measures (R.20). This includes the establishment of effective procedures for enforcing AML/CFT regulations, as well as ensuring that financial institutions are subject to regular reviews and audits.

However, there is still a need for more robust regulations to prevent money laundering and terrorist financing activities in Armenia.

New Technologies

Armenia has demonstrated compliant performance in regulating new technologies (R.15). This includes the establishment of effective procedures for managing digital currencies, prepaid cards, and other emerging payment systems.

However, there is still a need for more robust regulations to prevent these technologies from being used for money laundering or terrorist financing purposes.

Wire Transfers

Armenia has been found compliant in regulating wire transfers (R.16). This includes the establishment of effective procedures for managing cross-border transactions, as well as ensuring that they are subject to regular reviews and audits.

However, there is still a need for more robust regulations to prevent wire transfers from being used for money laundering or terrorist financing purposes.

Money or Value Transfer Services

Armenia has been found compliant in regulating money or value transfer services (R.14). This includes the establishment of effective procedures for licensing and supervising money transfer operators, as well as ensuring that they are subject to regular reviews and audits.

However, there is still a need for more robust regulations to prevent money transfer operators from being used for money laundering or terrorist financing purposes.