BAKU, Azerbaijan, October 30. Financial institutions in Azerbaijan will undergo a new risk assessment if the volume or value of their transactions increases by 40% or more compared with the previous calendar year.
This provision is included in a draft law amending the Law on the Central Bank of the Republic of Azerbaijan, discussed at a plenary session of the Azerbaijani Parliament on Friday.
Under the draft law, the Central Bank of Azerbaijan (CBA) will supervise financial institutions and the financial groups to which they belong in line with anti-money laundering and counter-terrorist financing legislation and the Law on Targeted Financial Sanctions.
The CBA will regularly assess the risks of money laundering and terrorist financing, including the risk that financial institutions may fail to comply with relevant legal requirements.
Additional assessments will be required when significant changes occur in an institution's management or operations. These include restructuring, changes in beneficial ownership, business activities, customer base or geographical reach, as well as a 40% or greater increase in transaction volume or value compared with the previous year.
The CBA will also be able to request documents and information from financial institutions and financial groups in writing, setting deadlines for their submission.
The scope and frequency of supervisory measures will depend on the risks identified, the effectiveness of institutions' internal controls and procedures, national money laundering and terrorist financing risks, and the size and structure of financial institutions and groups.
The draft law also sets out which financial groups will be subject to consolidated supervision for anti-money laundering and counter-terrorist financing purposes. These include groups comprising banks, life insurers, reinsurers, insurance intermediaries, investment companies, investment funds and their managers, as well as representative offices of foreign investment funds.
The existing legislation already authorizes the CBA to supervise financial institutions under anti-money laundering and counter-terrorist financing rules and targeted financial sanctions requirements. Financial institutions are required to comply with these rules.
Following discussions, the draft law was put to a vote and adopted in its third reading.
