|
|
Sanctions:
In February 1992, the Organisation for Security and Co-operation
in Europe (OSCE) requested that all OSCE participating states
should introduce an embargo on 'all deliveries of weapons and
munitions to forces engaged in combat in the Nagorno-Karabakh
area'. This embargo is still in force.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011
Azerbaijan is a rapidly growing economy, at the crossroads of
Europe and central Asia, with extensive hydrocarbon resources.
The majority of international trade and foreign investment takes
place in the energy sector. All other sectors lag energy in growth
and sophistication, including the financial sector. This gap,
coupled with Azerbaijan’s shared history, long-standing trade
relationships, and common border with Iran, makes Azerbaijan’s
financial institutions vulnerable to being used by foreign entities
looking to conduct money laundering/terrorist financing
transactions involving Iran. Over the past year, Azerbaijan has
made visible progress in addressing this vulnerability by creating
a Financial Monitoring Service (FMS), and implementing
regulations in line with international standards.
The major source of criminal proceeds in Azerbaijan is endemic
corruption which cuts across all sectors of the economy and all
layers of society. International reports also identify Azerbaijan as
a transit country for the Afghan drug trade; Azerbaijani authorities
suspect this illicit drug trade generates a significant amount of
illicit funds. Other generators of illicit funds include robbery, tax
evasion, smuggling, trafficking, and organized crime. Money
laundering likely occurs in the formal financial sector, non-bank
financial systems, alternative remittance systems, and the
construction industry. There is a significant black market for
smuggled goods in Azerbaijan, which serves as a transit country
for illicit goods.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF U.S.
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S. OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: NO civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks; insurance and reinsurance companies
and intermediaries; notaries, lawyers and auditors; company
formation agents and asset managers; real estate brokers and
agents; pawnshops; securities brokers and investment funds;
lotteries; the National Post; non-governmental organizations
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, money remitters; insurance and
reinsurance companies and intermediaries; securities brokers and
investment funds; leasing companies; company formation agents
and asset managers; lawyers and auditors; company formation
agents and asset managers; real estate brokers and agents;
lotteries; dealers of precious metals and stones; pawnshops; non-
governmental organizations
Number of STRs received and time frame: 6,607 January 1
through December 14, 2010
Number of CTRs received and time frame: 35,872 January 1
through December 14, 2010
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: Six in 2010
Convictions: One in October 2009
Assets forfeited: criminally: 58,000 EUR (approximately $75,400)
in October 2009 civilly: Not applicable
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
Azerbaijan is a member of MONEYVAL, a Financial Action Task
Force-style regional body. Its most recent mutual evaluation can
be found here: http://www.coe.
int/t/dghl/monitoring/moneyval/Evaluations/Evaluation_reports_en.
asp
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The AML law excludes from the list of covered entities travel
agencies; auto dealers; and dealers of art, antiques, and other
high-value consumer goods. These entities are not required to
maintain customer information or report suspicious activity.
The FMS is a dynamic but very young organization. It is in the
process of building a database and the expertise with which to
systematically study and identify trends in money laundering.
Currently, inadequate interagency cooperation and training
significantly diminish its investigative abilities. The FMS has
concluded information exchange agreements with a number of
regional financial intelligence units.
Recently, intergovernmental discussions of draft amendments to
the Criminal Code and Code of Criminal Procedure were finalized.
In particular, the draft amendments include corporate criminal
liability in relation to money laundering and terrorist financing
offenses, and special confiscation procedures with an all crimes
approach which will make it possible to confiscate proceeds for all
forms of offenses.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Azerbaijan is frequently used as a transit country along major
drug trafficking routes from Afghanistan and Iran to Europe due to
its location. Portions of Azerbaijan’s border are also uncontrolled
due to regional conflict. The quantity of drugs seized by the
authorities in Azerbaijan, as well as the number of reported crimes
related to drugs, have increased over the last decade. The
Ministry of Interior leads domestic counternarcotics efforts while
the Ministry of National Security leads international
counternarcotics operations. The State Border Service and State
Customs Committee also play significant counternarcotics roles.
Domestic drug cultivation includes both cannabis and opium
poppy, but is not widespread, and is mostly for regional
consumption. Few government-sponsored programs exist in
Azerbaijan to address domestic drug use.
Azerbaijan was one of the first countries in the South Caucasus to
become a party to the 1988 UN Drug Convention in 1993.
Azerbaijan also started one of the first police units that specifically
targeted drug trafficking in the region.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
Azerbaijan is a source, transit, and destination country for men,
women, and children subjected to forced labor, and women and
children subjected to sex trafficking. Men and boys from
Azerbaijan are subjected to conditions of forced labor in Russia
and Moldova. Women and children from Azerbaijan are subjected
to sex trafficking in the UAE, Turkey, Russia, and Iran. Women
and children from Azerbaijan are subjected to sex trafficking and
children are subjected to forced labor, including forced begging,
within the country. Azerbaijan serves as a transit country for
women from Uzbekistan and Kazakhstan subjected to forced
prostitution in Turkey and the UAE. Azerbaijan is a destination
country for women from Uzbekistan and Kyrgyzstan subjected to
forced prostitution. Azerbaijan is also a destination country for
men from Turkey, Afghanistan, and China subjected to conditions
of forced labor, primarily in the construction industry. Chinese
women are subjected to forced labor as street vendors within
Azerbaijan.
The Government of Azerbaijan does not fully comply with the
minimum standards for the elimination of trafficking. The
Government of Azerbaijan has not made sufficient progress in
investigating, prosecuting, or convicting labor trafficking offenses
or in identifying victims of forced labor; therefore, Azerbaijan is
placed on Tier 2 Watch List for a fourth consecutive year.
Azerbaijan was not placed on Tier 3 per Section 107 of the 2008
Trafficking Victims Protection Reauthorization Act, however, as
the government has a written plan that, if implemented, would
constitute making significant efforts to bring itself into compliance
with the minimum standards for the elimination of trafficking and is
devoting sufficient resources to implement that plan. During the
reporting period, the government acknowledged that forced labor
is a problem within Azerbaijan and investigated at least three
reports of forced labor. It did not, however, prosecute or convict
any trafficking offenders for forced labor. Moreover, the reported
number of sex trafficking prosecutions and convictions declined
from the previous year. The government identified three
Azerbaijani victims of forced labor in Poland and investigated an
allegation of 25 Azerbaijanis subjected to forced labor in Russia.
The government also provided assistance to some domestic
victims of trafficking without requiring them to submit a police
report.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: Azerbaijan actively opposed terrorist organizations
seeking to move people, money, and material through the
Caucasus. The country stepped up efforts and has had some
success in reducing the presence of terrorist facilitators and
hampering their activities.
Legislation and Law Enforcement: Law enforcement bodies
continued to pursue terrorist groups and facilitators operating in
Azerbaijan. In October 2009, a Baku court sentenced two
Lebanese nationals, Ali Muhammad Karaki and Ali Hussein
Najmeddin, to prison terms of 15 years each, and sentenced four
Azerbaijani accomplices to terms of two to 14 years. The court
found that the group was planning attacks on the Israeli Embassy.
The investigation revealed that Karaki and Hussein were linked to
Hizballah and others in Iran. According to press reports, Karaki
and Najmeddin were released in a prisoner exchange with Iran
and deported in August 2010, along with 12 Iranian nationals.
Countering Terrorist Finance: The Azerbaijani government
continued to implement its law on anti-money laundering and
counterterrorist financing (AML/CTF) and established a Financial
Investigative Unit (FIU). In October, the Central Bank prepared an
action plan to bring Azerbaijan's AML/FIU into conformity with the
standards of the UN, the Financial Action Task Force (FATF), and
other international organizations and conventions. In addition, the
Azerbaijan government submitted its plan to the Council of Europe’
s Committee of Experts on the Evaluation of Anti-Money
Laundering Measures and the Financing of Terrorism
(MONEYVAL), the FATF-style regional body. MONEYVAL
reviewed Azerbaijan's proposals in December and agreed to
withdraw its advisory on non-compliance for Azerbaijan, and
removed Azerbaijan from the FATF Watch List. The United States
worked with the FIU to improve the legal AML/CTF framework,
establish information systems, build capacity for AML/CTF
stakeholders, and develop a strategy plan for the FIU. Azerbaijan
continued to identify possible terrorism-related funding by
distributing lists of suspected terrorist groups and individuals to
local banks.
Regional and International Cooperation: In September, Azerbaijan
and Russia signed a border demarcation agreement regarding
Azerbaijan's 390-kilometer border with Russia. On November 18,
Azerbaijan signed a security cooperation agreement with Caspian
Sea littoral states to coordinate law enforcement efforts aimed at
smuggling, narcotics trafficking, organized crime, and terrorism.
Links:
Worldwide AML Legislation (International Bar Association)
In February 1992, the Organisation for Security and Co-operation
in Europe (OSCE) requested that all OSCE participating states
should introduce an embargo on 'all deliveries of weapons and
munitions to forces engaged in combat in the Nagorno-Karabakh
area'. This embargo is still in force.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011
Azerbaijan is a rapidly growing economy, at the crossroads of
Europe and central Asia, with extensive hydrocarbon resources.
The majority of international trade and foreign investment takes
place in the energy sector. All other sectors lag energy in growth
and sophistication, including the financial sector. This gap,
coupled with Azerbaijan’s shared history, long-standing trade
relationships, and common border with Iran, makes Azerbaijan’s
financial institutions vulnerable to being used by foreign entities
looking to conduct money laundering/terrorist financing
transactions involving Iran. Over the past year, Azerbaijan has
made visible progress in addressing this vulnerability by creating
a Financial Monitoring Service (FMS), and implementing
regulations in line with international standards.
The major source of criminal proceeds in Azerbaijan is endemic
corruption which cuts across all sectors of the economy and all
layers of society. International reports also identify Azerbaijan as
a transit country for the Afghan drug trade; Azerbaijani authorities
suspect this illicit drug trade generates a significant amount of
illicit funds. Other generators of illicit funds include robbery, tax
evasion, smuggling, trafficking, and organized crime. Money
laundering likely occurs in the formal financial sector, non-bank
financial systems, alternative remittance systems, and the
construction industry. There is a significant black market for
smuggled goods in Azerbaijan, which serves as a transit country
for illicit goods.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF U.S.
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S. OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: NO civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks; insurance and reinsurance companies
and intermediaries; notaries, lawyers and auditors; company
formation agents and asset managers; real estate brokers and
agents; pawnshops; securities brokers and investment funds;
lotteries; the National Post; non-governmental organizations
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, money remitters; insurance and
reinsurance companies and intermediaries; securities brokers and
investment funds; leasing companies; company formation agents
and asset managers; lawyers and auditors; company formation
agents and asset managers; real estate brokers and agents;
lotteries; dealers of precious metals and stones; pawnshops; non-
governmental organizations
Number of STRs received and time frame: 6,607 January 1
through December 14, 2010
Number of CTRs received and time frame: 35,872 January 1
through December 14, 2010
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: Six in 2010
Convictions: One in October 2009
Assets forfeited: criminally: 58,000 EUR (approximately $75,400)
in October 2009 civilly: Not applicable
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
Azerbaijan is a member of MONEYVAL, a Financial Action Task
Force-style regional body. Its most recent mutual evaluation can
be found here: http://www.coe.
int/t/dghl/monitoring/moneyval/Evaluations/Evaluation_reports_en.
asp
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The AML law excludes from the list of covered entities travel
agencies; auto dealers; and dealers of art, antiques, and other
high-value consumer goods. These entities are not required to
maintain customer information or report suspicious activity.
The FMS is a dynamic but very young organization. It is in the
process of building a database and the expertise with which to
systematically study and identify trends in money laundering.
Currently, inadequate interagency cooperation and training
significantly diminish its investigative abilities. The FMS has
concluded information exchange agreements with a number of
regional financial intelligence units.
Recently, intergovernmental discussions of draft amendments to
the Criminal Code and Code of Criminal Procedure were finalized.
In particular, the draft amendments include corporate criminal
liability in relation to money laundering and terrorist financing
offenses, and special confiscation procedures with an all crimes
approach which will make it possible to confiscate proceeds for all
forms of offenses.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Azerbaijan is frequently used as a transit country along major
drug trafficking routes from Afghanistan and Iran to Europe due to
its location. Portions of Azerbaijan’s border are also uncontrolled
due to regional conflict. The quantity of drugs seized by the
authorities in Azerbaijan, as well as the number of reported crimes
related to drugs, have increased over the last decade. The
Ministry of Interior leads domestic counternarcotics efforts while
the Ministry of National Security leads international
counternarcotics operations. The State Border Service and State
Customs Committee also play significant counternarcotics roles.
Domestic drug cultivation includes both cannabis and opium
poppy, but is not widespread, and is mostly for regional
consumption. Few government-sponsored programs exist in
Azerbaijan to address domestic drug use.
Azerbaijan was one of the first countries in the South Caucasus to
become a party to the 1988 UN Drug Convention in 1993.
Azerbaijan also started one of the first police units that specifically
targeted drug trafficking in the region.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
Azerbaijan is a source, transit, and destination country for men,
women, and children subjected to forced labor, and women and
children subjected to sex trafficking. Men and boys from
Azerbaijan are subjected to conditions of forced labor in Russia
and Moldova. Women and children from Azerbaijan are subjected
to sex trafficking in the UAE, Turkey, Russia, and Iran. Women
and children from Azerbaijan are subjected to sex trafficking and
children are subjected to forced labor, including forced begging,
within the country. Azerbaijan serves as a transit country for
women from Uzbekistan and Kazakhstan subjected to forced
prostitution in Turkey and the UAE. Azerbaijan is a destination
country for women from Uzbekistan and Kyrgyzstan subjected to
forced prostitution. Azerbaijan is also a destination country for
men from Turkey, Afghanistan, and China subjected to conditions
of forced labor, primarily in the construction industry. Chinese
women are subjected to forced labor as street vendors within
Azerbaijan.
The Government of Azerbaijan does not fully comply with the
minimum standards for the elimination of trafficking. The
Government of Azerbaijan has not made sufficient progress in
investigating, prosecuting, or convicting labor trafficking offenses
or in identifying victims of forced labor; therefore, Azerbaijan is
placed on Tier 2 Watch List for a fourth consecutive year.
Azerbaijan was not placed on Tier 3 per Section 107 of the 2008
Trafficking Victims Protection Reauthorization Act, however, as
the government has a written plan that, if implemented, would
constitute making significant efforts to bring itself into compliance
with the minimum standards for the elimination of trafficking and is
devoting sufficient resources to implement that plan. During the
reporting period, the government acknowledged that forced labor
is a problem within Azerbaijan and investigated at least three
reports of forced labor. It did not, however, prosecute or convict
any trafficking offenders for forced labor. Moreover, the reported
number of sex trafficking prosecutions and convictions declined
from the previous year. The government identified three
Azerbaijani victims of forced labor in Poland and investigated an
allegation of 25 Azerbaijanis subjected to forced labor in Russia.
The government also provided assistance to some domestic
victims of trafficking without requiring them to submit a police
report.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: Azerbaijan actively opposed terrorist organizations
seeking to move people, money, and material through the
Caucasus. The country stepped up efforts and has had some
success in reducing the presence of terrorist facilitators and
hampering their activities.
Legislation and Law Enforcement: Law enforcement bodies
continued to pursue terrorist groups and facilitators operating in
Azerbaijan. In October 2009, a Baku court sentenced two
Lebanese nationals, Ali Muhammad Karaki and Ali Hussein
Najmeddin, to prison terms of 15 years each, and sentenced four
Azerbaijani accomplices to terms of two to 14 years. The court
found that the group was planning attacks on the Israeli Embassy.
The investigation revealed that Karaki and Hussein were linked to
Hizballah and others in Iran. According to press reports, Karaki
and Najmeddin were released in a prisoner exchange with Iran
and deported in August 2010, along with 12 Iranian nationals.
Countering Terrorist Finance: The Azerbaijani government
continued to implement its law on anti-money laundering and
counterterrorist financing (AML/CTF) and established a Financial
Investigative Unit (FIU). In October, the Central Bank prepared an
action plan to bring Azerbaijan's AML/FIU into conformity with the
standards of the UN, the Financial Action Task Force (FATF), and
other international organizations and conventions. In addition, the
Azerbaijan government submitted its plan to the Council of Europe’
s Committee of Experts on the Evaluation of Anti-Money
Laundering Measures and the Financing of Terrorism
(MONEYVAL), the FATF-style regional body. MONEYVAL
reviewed Azerbaijan's proposals in December and agreed to
withdraw its advisory on non-compliance for Azerbaijan, and
removed Azerbaijan from the FATF Watch List. The United States
worked with the FIU to improve the legal AML/CTF framework,
establish information systems, build capacity for AML/CTF
stakeholders, and develop a strategy plan for the FIU. Azerbaijan
continued to identify possible terrorism-related funding by
distributing lists of suspected terrorist groups and individuals to
local banks.
Regional and International Cooperation: In September, Azerbaijan
and Russia signed a border demarcation agreement regarding
Azerbaijan's 390-kilometer border with Russia. On November 18,
Azerbaijan signed a security cooperation agreement with Caspian
Sea littoral states to coordinate law enforcement efforts aimed at
smuggling, narcotics trafficking, organized crime, and terrorism.
Links:
Worldwide AML Legislation (International Bar Association)
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| AZERBAIJAN |
___________________________________________________
AML News / Updates
14 Dec 2009
Fourth public statement of the MONEYVAL Committee in respect of
Azerbaijan
view statemant (pdf file)......
| KnowYourCountry |
|
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| Last Updated: 16 April 2012 |