State Authorities’ Mechanisms for Supervision of Activities: Armenia’s Progress and Challenges
Yerevan, Armenia - The Republic of Armenia has made significant progress in strengthening its mechanisms for supervising activities by state authorities, according to a recent report.
Framework for Effective Supervision
The country’s Constitution and relevant laws provide the framework for ensuring effective supervision and combating money laundering and terrorist financing (ML/TF).
Financial Monitoring Center
The Financial Monitoring Center (FMC), as the national financial intelligence unit, plays a crucial role in receiving, analyzing, and disseminating ML/TF information to corresponding recipients. The FMC engages in national and international cooperation to serve this purpose and exercises limited supervisory functions.
Law Enforcement Agencies
Law enforcement agencies (LEAs), including the National Security Service, Police, Ministry of Finance, and General Prosecution Office, are responsible for exercising pre-trial proceedings, while judicial authorities handle in-trial proceedings. The report emphasizes the need to improve practices in instigating and investigating criminal cases with potential elements of ML offense.
Central Bank of Armenia
The Central Bank of Armenia (CBA) exercises licensing, regulatory, and supervisory functions over all financial institutions in the country, including banks, credit organizations, insurance companies, investment firms, money transfer services, foreign exchange bureaus, and pawnshops. The report suggests that the CBA should fully implement and consistently apply a risk-based supervision approach.
Ministry of Finance
The Ministry of Finance (MoF) is responsible for supervising various categories of designated non-financial businesses and professions (DNFBPs), such as licensed auditors, casinos, organizers of games of chance and lotteries. The report highlights that the MoF should ensure consistent application of AML/TF requirements among these DNFBPs.
Areas for Improvement
The report identifies several areas where Armenia’s mechanisms for supervising activities by state authorities can be improved:
- Strengthening the effectiveness of law enforcement and judicial authorities in exercising their functions related to criminal prosecution.
- Improving practices in instigating and investigating criminal cases with potential elements of ML offense.
- Enhancing the CBA’s risk-based supervision approach and ensuring consistent application of AML/TF requirements among DNFBPs.
Conclusion
Armenia’s progress in strengthening its mechanisms for supervising activities by state authorities is encouraging, but there are still challenges to be addressed to ensure effective implementation of AML/TF measures.