Financial Crime World

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Guidance Paper on Conflict of Interest Prevention for Azerbaijani MPs Gains Traction

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A workshop attended by Members of Parliament (MPs) and parliamentary staff has seen a guidance paper on preventing conflict of interest gain traction. The paper, which provides practical examples of acceptance of gifts, post-employment rules, and contact with third parties, was presented alongside legal reviews.

The guidance paper aims to help MPs navigate potential conflicts of interest and promote ethical conduct in public office. According to sources, the parliamentary authorities have taken note of the recommendations made by both legal reviews and are working towards implementing them.

MPs Take Note of Conflict of Interest Guidance

Azerbaijan’s parliament has reviewed the draft law on regulations of ethical conduct for MPs, taking into account most of the recommendations from the legal reviews. The new version of the law, adopted in December 2018, removes the prohibition on voting or participating in parliamentary proceedings in situations of conflict of interest and instead recommends that MPs refrain from doing so.

Additionally, the examples presented in the guidance paper were incorporated by the parliament, with the Disciplinary Commission agreeing to scrutinize them for future reference.

Training Program Enhances Financial Sector Capabilities

The project has also developed a training program on terrorism financing and proliferation of weapons of mass destruction (WMDs). The program provides financial crime risk assessment tools, including:

  • Identification of risk factors
  • Assessment of control effectiveness
  • Calculation of residual risk levels

Trainees were presented with financial crime risk assessment tools to better manage terrorist financing and proliferation risks. The importance of risk measurement in applying a risk-based approach for anti-money laundering (AML) and combating the financing of terrorism (CFT) prevention was highlighted.

Capacity Building Boosts Financial Institutions’ Risk Assessment Capabilities

The project has enhanced the capacities of financial institutions, including banks and other reporting entities, to identify money laundering and terrorism financing risks. Through capacity-building activities facilitated by the project, these institutions have strengthened their knowledge and skills to better:

  • Identify higher-risk entities or individuals
  • Understand TF and WMD proliferation risks

Risk-Based Approach to Supervision

The project has also developed an AML/CFT risk assessment methodology and sector-specific guidelines for the banking sector. The aim is to ensure Azerbaijan’s compliance with international recommendations regarding the application of a risk-based approach and proposing actions to mitigate risks effectively, both for supervisory and reporting entities.

Financial Markets Supervisory Authority (FIMSA) conducted onsite AML/CFT inspections across all banks using survey forms with typical control questions. However, it was noted that supervisory bodies need to ensure a more standardized methodology for implementing risk assessments not only across financial institutions but also non-financial institutions.

The project has produced:

  • “Risk assessment methodology for supervisory authorities”
  • “Guidelines for effective implementation of risk-based Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) procedures in the financial sector”

Both documents were presented during the workshop on Risk Assessment Methodology.

Fully Achieved Outcome Indicators

The project has achieved its expected outcome indicators, including:

  • Increased capacities to identify terrorism financing by financial and non-financial institutions
  • Adopted legislation reflecting outstanding MONEYVAL recommendations