Financial Crime World

Title: Azerbaijan Urged to Intensify Anti-Money Laundering and Terrorist Financing Efforts by MONEYVAL

Strasbourg Recommendations

In its latest report, the Council of Europe’s anti-money laundering body, MONEYVAL, strongly advised Azerbaijani authorities to strengthen their measures against Money Laundering (ML) and Terrorist Financing (TF). The European organization identified several concerns and deficiencies in the country’s investigative, prosecutorial, and supervisory capacities.

Key Findings

  • Political commitment and financial resources: MONEYVAL evaluators highlighted a lack of political commitment and insufficient financial resources to combat ML and TF effectively.
  • Identifying and freezing proceeds of crime: The committee emphasized the need for improvements in identifying and freezing property related to criminal activities.
  • Lack of transparency: MONEYVAL expressed concerns about the low number of confiscation cases and the lack of transparency regarding confiscated assets.

Recommendations for Improvements

Confiscating criminal assets

  • Legislation and procedures: MONEYVAL urged Azerbaijani authorities to adopt and implement appropriate legislation, regulations, and procedures for confiscating criminal assets and providing for their subsequent use.

Risk assessment and supervisory frameworks

  • Supervisory toolkit: MONEYVAL recommended reinforcing risk-based approaches to supervision and enhancing the supervisory toolkit for the financial sector.
  • Cooperation and information exchange: The importance of increasing cooperation and information exchange among key stakeholders was emphasized.

Financial institutions and alternative investment schemes

  • ML/TF risk assessments: MONEYVAL encouraged Azerbaijan to ensure financial institutions, including those outside the formal financial sector, are subjected to adequate ML/TF risk assessments and ongoing supervision.
  • Regulatory framework: In this context, MONEYVAL encouraged Azerbaijan to establish a legal framework for regulating alternative investment schemes.

Previous Assessments and Future Plans

  • Previous evaluations: Azerbaijan was previously identified as a high-risk jurisdiction for ML/TF by the Financial Action Task Force (FATF) in its 2018 report.
  • Mutual evaluation and follow-up: MONEYVAL plans to follow up on the recommendations provided in this report, which will be the basis for a mutual evaluation of Azerbaijan’s ML/TF framework by the FATF in 2024. The organization remains committed to supporting Azerbaijani efforts to strengthen its regulatory framework and enhance cooperation with international partners.