Financial Crime World

Azerbaijan Urged to Enhance Money Laundering, Terrorist Financing, and Proliferation Financing Measures by MONEYVAL

MONEYVAL, the Europe-based anti-money laundering (AML) and counter-terrorist financing (CTF) monitoring body of the Council of Europe, has published a new report on Azerbaijan’s AML/CFT system. The report praises some progress but urges the country to strengthen its efforts against money laundering (ML), terrorist financing (TF), and proliferation financing (PF).

Significant progress and commendable efforts

The report recognizes Azerbaijan’s successes in:

  • Investigating and prosecuting cases of terrorist financing, resulting in seven convictions during the evaluation period
  • Providing and seeking constructive international cooperation

Key ML risks and areas for improvement

Despite these accomplishments, there is room for improvement to address:

  1. Inconsistent results in ML investigations and prosecutions
  2. Inadequate measures to trace and confiscate criminally-derived proceeds
  3. Private sector’s adherence to targeted financial sanctions for both TF and PF
  4. Supervision and enforcement of financial institutions and designated non-financial businesses and professions (DNFBPs)

Money laundering risks

The main ML risks in Azerbaijan include:

  • Domestic corruption
  • Tax-related crimes
  • Smuggling
  • Drug trafficking

Urgent actions for NPOs and prevention of terrorist financing

Domestic non-profit organizations (NPOs) assessed as posing a risk of being abused for terrorist financing purposes require immediate attention. Preventive, targeted, and proportionate risk mitigation measures should be taken to ensure NPO activities’ legitimacy.

Recommendations for financial institutions’ supervision and control

MONEYVAL calls for substantial improvements in Azerbaijan’s supervision of financial institutions and DNFBPs:

  • Strengthening the risk-based approach to supervision
  • Enhancing enforcement and sanctioning powers for AML/CFT breaches
  • Extending control measures to beneficial owners and criminal associations

Enhancing transparency, reporting entities’ responsibilities, and future reporting

MONEYVAL recommends that Azerbaijan takes more proactive steps to ensure transparency by:

  • Adopting identification and verification measures for politically exposed persons and beneficial owners
  • Reporting entities implementing adequate procedures to prevent ML and TF

December 2025 deadline for progress reporting to MONEYVAL

Azerbaijan will report back to MONEYVAL on achievements made in enhancing its AML/CFT measures in December 2025.