Representatives of the Central Bank of Armenia, including the Financial Monitoring Center of the Central Bank, and the private sector, in particular banks and payment institutions, participated in a workshop on “Money Laundering and Terrorism Financing Risks related to Virtual Assets and the appropriate Mitigating Measures to Address those Risks”, organised in Yerevan on 9 and 10 February 2023.
This workshop built on support provided earlier by the Council of Europe to Armenian authorities in the area of regulation and supervision of Virtual Asset Service Providers (VASPs) – an emerging and fast evolving area requiring adapted measures to prevent the use of virtual assets (VAs) and VASPs for money laundering or terrorism financing.
Previous support included the expert review of a draft legislative package initiated by the Financial Monitoring Center of the Central Bank of Armenia (the Armenian Financial Intelligence Unit – FIU), which includes a new draft Law on Digital Assets, and related amendments to the 2008 Law on Combating Money Laundering and Terrorist Financing (AML Law). Additionally, a capacity-building workshop on risk-based Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) supervision and management of VASPs had been organised for supervisory authorities, namely the Central Bank of Armenia and its Financial Monitoring Center, in October 2022.
Having advanced in the preparation of the above-mentioned legislative package, and obtained a better understanding of ML/TF risks related to virtual assets as well as their possible mitigation, through the previous activities conducted on this topic, the Armenian FIU decided to expand the awareness on these issues to the supervised financial institutions of the private sector, as well as additional staff of the Central Bank. It is in this context, responding to a follow-up request from the national authorities, that the present workshop was organised, with the aim to raise the awareness of banks and payment institutions on the risks related to VAs and VASPs, build their capacity to recognise red flags in this regard, and advise them on how to mitigate such risks, in order to prevent the abuse of the Armenian financial sector for money laundering and terrorism financing using VAs.
The Council of Europe’s international expertise provided at the workshop covered European and international standards in the area of VAs, including the latest relevant guidance from the Financial Action Task Force (FATF), but also focused on more practical considerations relevant to the targeted sector. Group work and interactive discussions helped target the contents of the workshop at best to the reality of the Armenian practitioners.
Following the awareness-raising event, the Armenian authorities also benefited from additional guidance in their ongoing efforts to identify and implement appropriate regulatory and supervisory measures to address the risks related to VAs and VASPs, in particular on elements to take into account prior to the envisaged licensing of VASPs.
In his intervention, the Head of Cooperation of the European Union Delegation to Armenia welcomed the steps taken by the Armenian authorities towards legislative amendments in the field of virtual assets, among the overall ongoing strategic efforts to reform and establish a comprehensive and effective institutional and legal framework on anti-corruption, anti-money laundering and countering the financing of terrorism. The Deputy Head of the Council of Europe Office in Yerevan underlined the effectiveness of the work of the Central Bank of Armenia, as recognised by the Council of Europe monitoring bodies, and expressed the renewed commitment of the Council of Europe to provide technical assistance to the efforts of the Central Bank in assessing and managing the risks arising in relation to the development and use of new technologies. The Deputy Governor of the Central Bank of Armenia emphasised the importance of the cooperation with the European Union and the Council of Europe in this newly emerging area, considering the vast expertise of the Council of Europe in the field. He highlighted the importance of the current event in raising the awareness of the members of the private sector on risks related to VAs and VASPs, based on real examples, so that they could address similar issues in a timely manner when facing them in their daily work.
This workshop was organised in the framework of the Project on “Strengthening institutional capacities to fight and prevent corruption in Armenia” which is co-funded by the European Union and the Council of Europe and implemented by the Council of Europe in their Partnership for Good Governance II.
