Financial Crime World

Azerbaijan’s Financial Monitoring Service: A Key Player in Combating Money Laundering and Terrorism Financing

Introduction

The Financial Monitoring Service (FMS) has been at the forefront of combating money laundering and terrorism financing in Azerbaijan since its establishment. As a key player in the country’s financial sector, FMS plays a vital role in ensuring transparency and efficiency in the prevention of these criminal activities.

Objectives and Mandate

According to its charter, FMS interacts with various state and local self-government bodies, international and non-governmental organizations, as well as legal entities and individuals. Its primary objective is to monitor compliance with laws and regulations related to anti-money laundering (AML) and combating the financing of terrorism (CFT).

  • Primary objectives:
    • Prevent the legalization of criminally obtained funds or other property
    • Prevent the financing of terrorism
  • Key activities:
    • Policy-making
    • Regulation and control of AML/CFT laws implementation
    • National risk assessments
    • Coordination with state bodies and institutions
    • Collection and analysis of information from monitoring participants and other sources

Responsibilities and Authorities

In addition to its duties, FMS has the right to:

  • Participate in the preparation and improvement of normative legal acts
  • Conduct research
  • Prepare analytical and methodological materials
  • Make proposals for the development of the field
  • Make inquiries to state bodies and institutions, local self-government bodies, legal entities, and individuals on necessary information

Governance and Operations

FMS applies advanced corporate governance standards in its operations and management, with a governing body known as the Board of Directors. The board manages and supervises the service’s activities.

Recent Developments and Reforms

Recent legislative reforms have taken place in Azerbaijan, which has led to significant changes in the country’s AML/CFT regime. These reforms include:

  • Amendments to the Criminal Code and AML/CFT Law
  • Adoption of new laws related to state registration, anti-corruption, securities market, insurance activity, currency regulation, administrative infringements, and penal code
  • Presidential decrees and cabinet ordinances relating to financial supervision, beneficial ownership information, declaration of national currency in cash, targeted financial sanctions, and guidance on asset freezing and money laundering

Conclusion

FMS’s efforts to combat money laundering and terrorism financing are crucial in maintaining Azerbaijan’s reputation as a stable and transparent financial hub. Its commitment to implementing advanced corporate governance standards and participating in international cooperation demonstrates its dedication to combating these criminal activities and ensuring the integrity of the country’s financial system.