Financial Crime World

Strengthening Financial Regulatory Framework: Armenia Takes Steps against Financial Crime

Introduction

In recent years, Armenia has implemented a series of key legislation and amendments aimed at strengthening its financial regulatory framework and preventing financial crime. These measures aim to ensure the stability and reliability of the country’s banking sector, protect depositors’ and investors’ interests, and combat illicit activities within the financial system.

Foundational Legislation

The first significant milestone was the adoption of Armenian Laws on Central Bank, Banks and Banking, Bankruptcy of Banks, Credit Institutions, and Insurance Companies, and Banking Secrecy in 1996. This foundational legislation:

  • Established a robust framework for a banking system
  • Empowered the Central Bank to ensure price stability and oversee the banking sector
  • Regulated banking activities, corporate structures, and economic standards

Enhancements in Anti-Money Laundering (AML) and Combating Terrorism Financing (CFT)

In 2002-2004, key amendments were made to broaden the Central Bank’s role in:

  • Licensing and supervising credit institutions’ AML and CFT measures
  • Adopting international best practices, such as the Basel Principles of Banking Supervision in March 2004

These enhancements updated prudential economic standards and inspection procedures.

Transparency and Appeal Procedures

Significant changes to the Armenian Laws on Central Bank, Banks and Banking, and Banking Secrecy formalized transparency and appeal procedures. These reforms:

  • Ensured openness of the bankruptcy process
  • Removed limitations on appealing Central Bank decisions
  • Outlined grounds and procedures for appeals

Combating Financial Crimes

In 2004, Armenia adopted the Armenian Laws on Combating the Legalization of Proceeds from Crime and Financing of Terrorism. This move bolstered efforts to prevent and investigate illicit activities within the banking sector, protecting depositors’ interests and maintaining trust in the financial system.

Comprehensive Legislative Framework

Today, the Armenian banking sector operates under a comprehensive legislative framework that:

  • Ensures stable and reliable financial and banking sectors
  • Protects depositors’ and investors’ interests
  • Prevents financial crime

The current legal framework is built on key legislation adopted between 1996 and 2004.

Commitment to Strengthening Financial Regulatory Framework

Armenia’s commitment to strengthening its financial regulatory framework demonstrates its dedication to preventing financial crime and maintaining a stable and reliable financial system. Ongoing efforts are expected to continue enhancing transparency, accountability, and investor protection.