Armenia Sharply Increased Money Laundering Investigations Since 2018 – US State Department Report

WASHINGTON, DC — The US State Department’s Bureau of International Narcotics and Law Enforcement Affairs presented its International Narcotics Control Strategy Report.

“Armenia is gradually strengthening its AML legislation and has sharply increased its money laundering investigations and convictions since the 2018 “Velvet Revolution.” Armenia is aggressively pursuing criminal cases against high-level officials from prior governments and oligarchs connected to them, and thanks to new legislation, can now pursue assets connected to illegal activity in civil court following the establishment of a non-conviction-based asset forfeiture regime. Armenia’s parliament passed amendments to strict bank secrecy laws that hinder the ability of Armenian investigators to gain access to banking records. Although the Constitutional Court struck down the amendments, the government is currently working on new draft legislation to address the Constitutional Court’s concerns. The non-conviction-based asset forfeiture regime and these prospective changes to the bank secrecy laws should provide the Armenian criminal justice system with the authorities and tools to strengthen money laundering investigations and ramp up convictions even further in 2021 and beyond,” the report, in part, says.

“Although the current government is implementing an ambitious anti-corruption program, narcotics smuggling, the shadow economy, significant inflows of remittances from abroad, the hiding of assets within the real estate sector, and the use of cash remain widespread and constitute vulnerabilities.”

Between mid-2018 and November 2019, the Financial Investigation Unit  received inquiries on a total of 200 criminal cases involving elements of money laundering. That number increased to approximately 700 such investigations from January to October 2020, the report said.

These cases were mostly initiated with charges for predicate offenses such as high-profile corruption, embezzlement, tax evasion, theft, and fraud. A significant number of these investigations target representatives of Armenia’s former regimes and associated oligarchs.

“Armenia should provide criminal penalties for legal persons involved in money laundering or terrorist financing, ensure all reporting sectors provide mandated financial intelligence reports, criminalize misrepresentation, and create vetting mechanisms to prevent corrupt criminal actors from serving as, owning, or managing DNFPBs.”