Financial Crime World

Mechanisms for Supervision of Activities by State Authorities in Armenia

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Introduction

The Armenian government has implemented various mechanisms to ensure effective supervision of activities by state authorities, according to a new report. This article highlights the key players and findings from the analysis.

Framework for Supervisory Bodies

According to the Constitution of the Republic of Armenia and derivative laws, supervisory bodies have been granted powers to exercise their functions effectively. The following are among the key players:

  • Financial Monitoring Center (FMC): As the national financial intelligence unit, the FMC receives, analyzes, and disseminates suspicious transaction reports to corresponding recipients.
  • Law Enforcement Agencies (LEAs): The LEAs, including the National Security Service, Police, Ministry of Finance, and General Prosecutor’s Office, provide for the exercise of pre-trial proceedings.
  • Central Bank of Armenia (CBA): The CBA exercises its licensing, regulatory, and supervisory functions over all financial institutions in Armenia.
  • Ministry of Finance (MoF): As the supervisory authority for various categories of designated non-financial businesses and professions (DNFBPs), the MoF ensures their compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) requirements.

Key Findings

The report analyzed several indicators to assess the effectiveness of these mechanisms, including:

  • Quantitative and qualitative characteristics of notifications made by reporting entities
  • Numbers of criminal cases instigated and brought to court
  • Amounts of property seized and confiscated

Key findings from the analysis are:

  • The FMC’s exercise of its function of receiving, analyzing, and disseminating suspicious transaction reports is rated very low, with a stable trend going forward.
  • The CBA’s licensing, regulatory, and supervisory functions are rated low, with a declining trend going forward.
  • Law enforcement and judicial authorities’ exercise of their function of criminal prosecution is rated medium, with a declining trend going forward.
  • The MoF’s supervision over DNFBPs is rated low, with a stable trend going forward.

Conclusion

While there are areas for improvement, the Armenian government has made significant progress in implementing effective mechanisms for supervising activities by state authorities.