It turns out Armenia is one of the leading states to fight money laundering. According to the international standards of Money Laundering and Financing of Terrorism (MLFT) of the evaluation report published by the MONEYVAL, our country is in the 10th place among the EU countries and is in a higher position than, for instance, Romania, Check and Poland.
The international standards consist of 49 assignments. Armenia complies with the 6 out of these 49 standards. It also mostly complies with 20 standards, and 17 ones partially. Armenia does not comply with 5 standards. One assignment was recognized strictly inadmissible for Armenia. The information for evaluation was provided by the CB center for financial monitoring (CFF). The CFF is an Armenian financial investigation body established in 2005 according to the law on “fighting the legalization of money received through criminal means and fighting terrorism” and operates under the cover of the Central Bank. The goal of this center is the adoption of effective mechanisms to fight against money laundering and financing of terrorism. During yesterday’s press conference the head of the center Daniel Azatyan said that the MANIVAL group had observed significant development in the sectors of law enforcement and financial struggling against money laundering and financing of terrorism, as well as significant improvement in the prevention of such illegal activities.
How does this institution work? It receives suspicious reports on transactions exceeding 20 million drams from financial and non-financial institutions and persons. Based on this information and other data available they analyze the transactions, and in case of revealing any suspects or facts of money laundering or financing terrorism it sends the facts the law-enforcement institutions to institute legal proceedings.
The limit of 20 million drams is not a big sum in business, thus the center collects information about other transactions rather than small transactions only. In other words, every citizen who has done a transaction with a medium amount appears under the target. The head of the CFF says the reason of checking up the transactions exceeding 20 million is to collect information base for analysis. He says that the Central Bank had collected such information at all times. A transaction may be deemed suspicious if such transaction, its format or shape significantly differs from the transactions done before.
As of October 1, 2009 the CFF had 417 registered organizations and 639 non-financial organizations or persons in charge of reporting. Up to now they have submitted 294.308 reports on transactions exceeding the limit of 20 million drams. As for suspicious deals, the CFF has received reports on 164 suspicious transactions, 68 out of which were in 2009.
In order to make an opinion about the activities of this center the best information to refer to is the court verdicts in support of it. In this case the figures are some strange. According to the information provided yesterday, there were 7 judicial cases for money laundering, 1 of which was launched in 2006, and the other 6 cases in 2009. Journalists asked whether the financial sector was so clean that the number of suspicious deals was so small. “Yes, yes,” said D. Azatyan and explained that they had received only 60 information requests from outside. It means that at least the external world is not suspicious in this country.
In parallel with the praise concerning the fight against money laundering it is very strange that the sum of money returned to the budget as a result of the mentioned 7 cases of money laundering was 40 million drams. The first case, or as Mr. Azatyan says “the first bird”, was a small case concerning cutting forests and it covered one million drams only. There has not been any noisy discovering as a result of the other six cases either. On the other hand, when speaking of money laundering people remind the former foreign minister Alexander Arzumanyan and the criminal case allegedly launched against him for alleged money laundering of 40 thousand dollars. The court did not make any court verdict; they arrested Arzumanyan and discharged him. Now the case is frozen and it is not excluded that the authorities may remember about this case in the future again. The conclusion is that the tool for fighting and preventing money laundering has been used exclusively for the purpose of political intimidation. At least the case against Alexander Arzumanyan is a good example of that.
D. Azatyan says most of the officially registered and discovered cases concern violations done with credit cards. The head of the CFF also informed about a new way of cheating people, the so-called “niggers’ method”, which means that some people are sending e-mails to the recipients notifying them about a winning or huge heritage. No one has received such winning so far. “There is no one that might have received money, on the other hand there are thousands of people who have lost and paid such people,” said D. Azatyan and confessed that they are unable to struggle against such violations.
The operation of the CFF is closely connected with the president’s ad hoc established by the president “to fight money laundering, violations with plastic cards and other means, and financing of terrorism”, which is an advisory institution in this sector and develops the relative policies as well.
Following the interview with D. Azatyan the mentioned commission launched a session presided by its leader, the CB chairman Artur Javadyan, who welcomed the participants and praised the work of the commission for the achievements (the achievements were the mentioned 7 criminal cases with 40 million return to the budget). He made a short speech and suggested the participants to discuss the achievements but none of the high rank officials of the law-enforcement bodies managed to speak in the presence of journalists. Following this session they thanked the journalists and continued the session behind the closed doors as they said they were going to discuss banking confidential information as well. In a word, the journalists left but the deputy ministers and officials of law-enforcement bodies stayed. While they were discussing issues concerning financial security and policies in the country, their cars parked on the narrow street after Vazgen Manukyan were showing to people how good the traffic police was working and how secure the traffic was in the country… They were free to park their car wherever they wanted and happy because photo-journalist Gagik Shamshyan was not there.