MONEYVAL PUBLISHES ITS 3RD ROUND EVALUATION REPORT ON ARMENIA

ArmInfo
2010-01-12 14:29:00

ArmInfo. The Council of Europe’s MONEYVAL Committee (Committee of
Experts on the Evaluation of Anti-Money Laundering Measures and the
Financing of Terrorism) today published its 3rd Round Evaluation
Report on Armenia.

The report analyses the implementation of international and European
standards to combat money laundering and terrorist financing, assesses
levels of compliance with the Financial Action Task Force (FATF) 40+9
Recommendations and includes a recommended action plan to improve the
anti-money laundering (AML) and combating the financing of terrorism
(CFT) system of Armenia.

The main findings of the evaluation report are:

Armenia has made considerable improvements in its AML/CFT framework
in a relatively short timeframe, particularly by replacing the first
AML/CFT law enacted in 2005 with a more comprehensive law in 2008. The
new law still needs to be implemented effectively, especially by
designated non-financial businesses and professions (DNFBPs).

The Financial Intelligence Unit – the Financial Monitoring Centre
(FMC) – which is established within the Central Bank of Armenia is
knowledgeable and active, but is understaffed.

The Armenian AML/CFT preventive measures for financial institutions
operating in the financial system are comprehensive, provide
for risk-based elements, and are relatively close to the FATF
Recommendations. Implementation of the preventive measures by financial
institutions is slightly more advanced in the banking sector but less
so in other sectors (securities, insurance, foreign exchange offices
and money remitters).

Armenia’s criminal provisions for money laundering are basically
sound and address many criteria under the FATF standards though legal
persons are not subject to criminal liability under Armenian law.

Although there are some convictions, it has not yet been ascertained
through a court judgment that money laundering can be prosecuted
as an autonomous offence and in the absence of a conviction for the
predicate offence.

The criminal provisions relating to terrorism financing are broadly
in line with the international standards but further amendments are
necessary, particularly to cover the financing of individual terrorists
and terrorist organisations without an intention or knowledge that the
funds will be used in the commission of a specific act of terrorism.

The provisions relating to the confiscation of property involved in
the commission of money laundering, terrorism financing and predicate
offences meet several, though not all, criteria of the international
standards. Most notably, confiscation is not available for all FATF
designated predicate offences. Armenia should also review the freezing
mechanisms in place to implement obligations under UNSCR 1267 and
UNSCR 1373.

All designated non-financial businesses and professions, as described
in the FATF definition, are encompassed within the AML/CFT Law but
the legal regime for DNFBPs is not as comprehensive as for financial
institutions. Implementation of preventive measures by DNFBPs is
inadequate across the sector. No DNFBP has yet filed a suspicious
transaction report. The supervisory and regulatory regime for DNFBPs
also needs developing.

Significant improvements in the national co-operation framework
and practices have taken place over the past few years with the
establishment of a national body with a wide mandate in relation to
financial crime.

The legal framework for mutual legal assistance and extradition is
sound. The provisions of mutual legal assistance are not subject to
any unreasonable or unduly restrictive conditions.

More accurate statistics need to be maintained across all sectors
to assist the meaningful assessment of the effectiveness of AML/CFT
measures.

The report was prepared by the International Monetary Fund (IMF) under
co-operation agreements between IMF and MONEYVAL and it was adopted
at MONEYVAL’s 30th Plenary meeting (Strasbourg, 21-24 September 2009).

MONEYVAL was additionally responsible for evaluation of compliance
with the European Union directives, which are part of MONEYVAL’s
specific mandate.

MONEYVAL will follow up implementation of the recommendations through
its progress report procedure, under which MONEYVAL countries are
required to update the Committee on action taken on the mutual
evaluation report, one year after its adoption.
From: Baghdasarian