Financiele Misdaad Trends in Azerbeidzjan: An Overview

Azerbeidzjan, the land between Europe and Asia, has gone through a significant transition period in the last few years. The economic growth in the country has led to a greater presence of multinational corporations and financial institutions. However, these positive developments come with risks. Financial misconduct, such as fraud and money laundering, are becoming increasingly significant problems in Azerbeidzjan. In this article, we provide an overview of the recent financial misconduct trends in Azerbeidzjan.

Money Laundering

Money laundering of illegal income is a serious problem in Azerbeidzjan. According to a report from the European Parliament Research Service (EPRS) from 2019, Azerbeidzjan is a “highly attractive target for money laundering activities.” This trend is mainly associated with the oil and gas sector of the country. Money laundering practices are mostly directed towards European banks, but issues have also arisen with transactions from Azerbaijani clients in Swiss, British, and American institutions.

• Oil and gas sector is the most affected by money laundering
• European banks are the primary target of money laundering practices
• Transactions from Azerbaijani clients have caused issues in Swiss, British, and American institutions

Fraud

Fraud is another form of financial misconduct on the rise in Azerbeidzjan. According to Transparency International’s Corruption Perception Index in 2020, Azerbeidzjan ranked 127th out of 180 countries with a score of 31 on a maximum score of 100. Fraud mostly occurs in the public sector with a focus on obtaining government contracts and subsidies. These practices are often linked to corruption and the use of intermediaries.

• Public sector is the primary target of fraud
• Corruption is a common factor in fraudulent practices
• Intermediaries are often involved in fraudulent schemes

Corruption

Corruption is an essential component of financial misconduct in Azerbeidzjan. The government in the country has taken steps to combat corruption in recent years, but progress has been limited. According to the European Stability Initiative, Azerbeidzjan is “a highly corrupt country.” High-ranking officials and politicians are involved in corruption practices, and diplomacy is often used to bypass corrupt behavior of important clients.

• Government has taken steps to combat corruption, but progress is limited
• High-ranking officials and politicians are involved in corruption practices
• Diplomacy is often used to circumvent corrupt behavior of important clients

Conclusion

Financial misconduct is becoming an increasingly significant problem in Azerbeidzjan. The oil and gas sector is the most affected by money laundering, fraud, and corruption. While Azerbeidzjan has taken efforts to combat corruption, there is still a long way to go. European institutions and international organizations must engage further to control financial misconduct in Azerbeidzjan and ensure the safety of their financing institutions.

References

• European Parliament Research Service (EPRS), Azerbeidzjan: Trends and tendenses (2019)
• Transparency International, Corruption Perception Index 2020
• Europese Stabilitietsinitiatief, Azerbeidzjan: Een land met hoge corruptie (2015)