Money Laundering Definition in Armenia: A Growing Concern for Criminal Activities

Introduction

Money laundering, a global issue that involves the transfer of proceeds from illegal activities through the international financial system, has gained significant attention in recent years. In this article, we examine the money laundering definition in Armenia, a post-Soviet country in the South Caucasus region, and explore its growing role in criminal activities.

Money Laundering in Armenia

• Armenia, a country in transition, is experiencing an increase in money laundering cases, according to reports from international financial organizations.
• The country’s proximity to major transit routes and its weak regulatory framework make it an attractive destination for money launderers.

Understanding Money Laundering

1. Definition: Money laundering is the process of concealing the origins of illegally-gained proceeds by integrating them into the legitimate economy or financial system.
2. Stages: According to the Financial Action Task Force (FATF), money laundering typically involves three stages: placement, layering, and integration.
   • Placement: Criminals introduce their ill-gotten money into the financial system. Popular channels in Armenia include casinos and the real estate market.
   • Layering: The criminals move the funds around to create complexity and legitimacy. They break down large deposits into smaller amounts and transfer them through various accounts, sometimes using cash transactions.
   • Integration: After sufficient layering, the proceeds are re-introduced into the legitimate economy, often used for future criminal activities, investments or expenditures.

Combating Money Laundering in Armenia

• The government and financial institutions in Armenia are working to strengthen their regulatory framework.
• Recent efforts include:
  • Ratification of the United Nations Convention Against Corruption.
  • Establishment of the Asset Recovery and Management Agency, tasked with seizing and managing assets involved in corruption and money laundering cases.
  • Cooperation with international organizations such as the EU’s Anti-Money Laundering Directorate and the FATF.

Conclusion

Despite these efforts, money laundering remains a significant issue in Armenia’s economic and political landscape. Continued collaboration with international organizations and vigilance are crucial in containing the adverse effects of money laundering and safeguarding the legitimacy of Armenia’s financial sector.