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1 results foundAuthor: Council of Europe. Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) Title: Anti-money laundering and counter-terrorist financing measures: Armenia Summary: This report provides a summary of the AML/CFT measures in place in Armenia as at the date of the on-site visit (25 May to 6 June 2015). It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Armenia's AML/CFT system, and provides recommendations on how the system could be strengthened. Key Findings - Armenia has a broadly sound legal and institutional framework to combat money laundering (ML) and financing of terrorism (FT). Armenia's level of technical compliance is generally high with respect to a large majority of FATF Recommendations. - Armenia is not an international or regional financial centre and is not believed to be at major risk of ML. The predicate offences which were identified by the 2014 national risk assessment (NRA) as posing the biggest threat are fraud (including cybercrime), tax evasion, theft and embezzlement. The findings of this assessment indicate that corruption and smuggling also constitute a ML threat. The real estate sector, the shadow economy and the use of cash all constitute significant ML vulnerabilities. Competent authorities have assessed and demonstrated an understanding of some, but not all, ML risks in Armenia. - The NRA concludes that the risk of FT is very low. Although Armenia shares a border with Iran, which is considered by the FATF to pose a higher risk of FT, the evaluation team found no concrete indications that the Armenian's private sector and non-profit organisations (NPOs) are misused for FT purposes. There have never been any investigations, prosecutions and convictions for FT. There is an effective mechanism for the implementation of Targeted Financial Sanctions (TFS). No terrorist-related funds have been frozen under the relevant United Nations Security Council Resolutions (UNSCRs). - The financial intelligence unit (FIU) has access to a wide range of information sources and is very effective in generating intelligence for onward dissemination to LEAs. Law enforcement access to information is somewhat restricted by a combination of issues connected with the legislation dealing with law enforcement powers to obtain information held by financial institutions and law enforcement ability to successfully convert intelligence into evidence. Law enforcement authorities (LEAs) did not demonstrate that they make effective use of FIU notifications to develop evidence and trace criminal proceeds related to ML. - The number of ML investigations and prosecutions has increased in the period under review. However, it appears that LEAs target the comparatively easy self-laundering cases mainly involving domestic predicate offences. One ML conviction (described as autonomous) was secured, although the judiciary appears to have based its ruling on the admission that the predicate offence had been committed. Overall, law enforcement efforts to pursue ML are not fully commensurate with the ML risks faced by the country. - Seizure and confiscation of criminal proceeds, instrumentalities and property of equivalent value are not pursued as a policy objective. It is doubtful whether LEAs are in a position to effectively identify, trace and seize assets at the earliest stages of an investigation, since proactive parallel financial investigations for ML and predicate offences are not conducted on a regular basis. - The banking sector is the most important sector in terms of materiality. Banks understand the risks that apply to them according to the FATF Standards and the AML/CFT Law. However, they have not demonstrated that they have incorporated the risks identified in the NRA into their internal policies. The real estate sector, notaries and casinos pose a relatively higher risk compared to other DNFBPs. Their understanding of risk - The application of customer due diligence (CDD), record-keeping and reporting measures by financial institutions is adequate. Major improvements are needed by the DNFBP sector with respect to preventive measures. - The approach of the Central Bank of Armenia (CBA) to anti-money laundering/counter financing of terrorism (AML/CFT) supervision is to some extent based on risk. Developments in this area are on-going. Adequate procedures for the imposition of sanctions are in place. However, the level of fines could be improved. The supervision of the DNFBP sector was found to be in need of improvement relative to casinos and notaries, and inadequate relative to real estate agents, dealers in precious metals and stones, lawyers and accountants. - Most basic information on legal persons is publicly available through the State Register. All legal persons in Armenia are required to disclose the identity of their beneficial owners to the State Register upon registration and, inter alia, whenever there is a change in shareholding. Information on beneficial ownership of legal entities is also ensured through the application of CDD measures by banks. - While all the banks understand that they have to apply freezing of funds to proliferation financing and there is an innovative system in place in financial institutions to ensure that matches are detected, there is a concern that the legal framework based on the AML/CFT Law could be open to legal challenge. Coordination between the different competent authorities involved in this area needs to be further developed. Details: Strasbourg: Council of Europe, 2015. 182p. Source: Internet Resource: Fifth Round Mutual Evaluation Report: Accessed April 26, 2016 at: https://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round5/MONEYVAL(2015)34_5thR_MER_Armenia.pdf Year: 2015 Country: Armenia URL: https://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round5/MONEYVAL(2015)34_5thR_MER_Armenia.pdf Shelf Number: 138814 Keywords: BanksFinancial CrimeMoney LaunderingTerrorist Financing |