Azerbaijan Country Summary
Medium Risk
View full Ratings TableSanctions
Medium Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Higher Concern
US State ML Assessment
Medium Concern
Criminal Markets (GI Index)
Medium Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Azerbaijan is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Azerbaijan was undertaken in 2025. According to that Evaluation, Azerbaijan was deemed Compliant for 8 and Largely Compliant for 28 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 2 of the Effectiveness ratings.
Sanctions
The United Kingdom designated the state-owned tanker Zangazur and five Azerbaijani nationals in May 2025 for shipping Russian oil in circumvention of sanctions. The European Union has enacted binding measures under its 18th and 19th Russia sanctions packages that cover Azerbaijani-linked entities, including the SOCAR STAR refinery and the Zangazur, Shusha, and Karabakh tankers, while Australia and Canada maintain OSCE-based arms embargoes, with Canada also designating an Azerbaijani energy trading company in June 2025.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 30 |
| World Bank: Control of Corruption Percentile Rank | 12 |
Azerbaijan faces significant challenges related to corruption and organized crime, despite having established legal frameworks aimed at combating these issues. The effectiveness of anti-corruption measures is often undermined by inconsistent enforcement and a lack of impartiality, while pervasive corruption is particularly evident in government procurement and regulatory systems, creating obstacles for foreign investment.
The country also grapples with various criminal activities, including human trafficking, drug trafficking, and a substantial black market for counterfeit goods. Organized crime is influenced by state-embedded actors, with political elites reportedly controlling many illicit operations, while the judiciary's lack of independence and widespread corruption further complicate efforts to address these challenges effectively.
Economy
Azerbaijan's economy is heavily reliant on oil and gas, which constitute about 90% of its export revenue and over half of the state budget, making the investment climate challenging despite government efforts to attract foreign investment and diversify the economy. In 2023, the economy grew by 1.1%, with inflation rising to 8.8%, and the government has set ambitious targets for renewable energy, aiming for 30% of installed electricity capacity to come from renewables by 2030. While the government has implemented reforms to improve the business environment, issues such as corruption, a lack of judicial transparency, and a slow pace of structural reforms continue to hinder the development of a competitive private sector.
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