Armenian Not Exactly an Attractive Money Laundering Hub

YEREVAN (Armenpress)–Central Bank governor Tigran Sarkisian told journalists on Thursday that Armenia is not susceptible to money laundering practices and there exist no individuals or companies that finance terrorism. Speaking before the launch of an international conference on money laundering and terrorism financing in Yerevan–he recalled only two past instances of money laundering.

The first involved an Armenian citizen who–in cooperation with some other countries’ citizens–transferred a total of $1.4 million from the US to Armenia. He said the information had been sent by US officials; as a result–the Central bank moved to swiftly freeze some accounts in an Armenian bank. He said the investigation into this instance continues.

The second instant was connected to the Credit-Yerevan Bank–when it issued $250 million worth bonds and was trying to cash them in various countries; that operation was thwarted by Interpol.

He explained that Armenia does not attract illegal financial transactions because it is not a major financial center–and offers no offshore banking–only non-banking financial institutions.

However–a 2004 US State Department report on money laundering and terrorism financing noted that high unemployment–low salaries–corruption–a large shadow economy–and the presence of organized crime contribute to Armenia’s vulnerability to money laundering.

It said Armenia’s large shadow economy is largely unrelated to criminal activity other than tax evasion–but schemes that are commonly used in Armenia to avoid taxation are similar to those used for money laundering–including the fraudulent invoicing of imports–double bookkeeping and misuse of the banking system.

It also said the Government of Armenia has made great progress in 2004 in bringing legislation and structural capacity up to international standards in the area of money laundering and terrorist finance. On December 14–2004–the National Assembly adopted a comprehensive anti-money laundering law–"The Law on Fighting Legalization of Illegally Received Income and Terrorist Financing."

Armenia is a member of the Council of Europe’s Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL)–a party to the 1988 UN Drug Convention–the UN Convention on Mutual Assistance in Criminal Matters–the UN Convention against Transnational Organized Crime–and the European Convention on Mutual Assistance in Criminal Matters. During 2004–Armenia became party to the UN International Convention for the Suppression of the Financing of Terrorism and the Council of Europe Convention on Laundering Search–Seizure–and Confiscation of the Proceeds From Crime.

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