US embassy cable - 04YEREVAN2798

UNCLAS YEREVAN 002798 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EUR/CACEN, INL (JCAMPBELL AND CMESHESKE) 
JUSTICE FOR OIA AND AFMLS TREASURY FOR FINCEN, OTA 
 
E.O. 12958: N/A 
TAGS: EFIN, KCRM, KSEP, PTER, SNAR, AM 
SUBJECT: NA ADOPTS NEW ANTI-MONEY LAUNDERING LAW 
 
REF: YEREVAN 2604 
 
1. (U) Sensitive But Unclassified.  Please protect 
accordingly. 
 
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SUMMARY 
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2. (U) The Armenian National Assembly (NA) adopted the Law 
on Fighting Legalization of Illegally Received Income and 
Terrorist Financing.  The new law calls on the Central Bank 
of Armenia to coordinate anti-money laundering and terrorist 
financing activities in Armenia and defines the legal 
grounds for fighting illegal financial transactions, 
identifying and reporting on involved entities and creating 
a Financial Intelligence Unit (FIU).  The Central Bank is 
responsible for developing the law's regulatory and 
enforcement framework.  The GOAM notes that adopting the law 
places Armenia in compliance with international anti-money 
laundering and terrorist financing initiatives including the 
Money Val Committee of the Council of Europe and the 
Financial Action Task Force (FATF).  End Summary 
 
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NATIONAL ASSEMBLY ADOPTS THE LAW 
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3. (U) The Armenian National Assembly (NA) voted to adopt 
the Law on Fighting Legalization of Illegally Received 
Income and Terrorist Financing on December 14 and submitted 
it to President Kocharian for signature on December 22.  The 
law will take effect roughly two months after the president 
signs it.  The Central Bank of Armenia (CBA) drafted the law 
as part of an Anti-Money Laundering and Terrorism Financing 
package to fulfill Armenia's obligation under the 
International Convention on the Suppression of the Financing 
of Terrorism, UN Security Council Resolution No. 1373 
(2001).  (Note:  The National Assembly ratified the 
convention early this year.  End Note.)  In addition to the 
new law, the CBA's comprehensive package includes amendments 
to 12 existing laws and the Criminal Code, affecting 
banking, credit and non-profit organizations, insurance, and 
gaming. 
 
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CBA SETS THE LEGAL FRAMEWORK 
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4. (U) The new law assigns the Central Bank of Armenia as 
the single authorized body to coordinate anti-money 
laundering and to battle terrorist financing activities in 
the country.  The CBA is working to develop a series of 
implementing regulations (aiming to have them take effect by 
June 2005) and plans to set up a Financial Intelligence Unit 
(FIU) by March 2005.  The implementing regulations include 
the charter regulating CBA activities and define the mandate 
of the CBA, FIU, other reporting entities and the 
relationships among them. 
 
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LAW DEFINES A "DUBIOUS TRANSACTION" 
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5. (U) The new law lays out criteria that trigger a 
reporting requirement under suspicion of money 
laundering/terrorist financing.  Financial institutions must 
report any non real-estate transaction of more than 20 
million dram (about USD 40,000), real-estate transactions of 
more than 50 million dram (about USD 100,000) as well as any 
money transfer of more than 5 million dram (about USD 
10,000).  The law also requires state registration 
authorities to report any business purchase exceeding 30 
million dram (USD 60,000) in a sole proprietorship company 
and 40 million dram (about USD 80,000) for other types of 
companies. 
 
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COMMENT 
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6. (SBU) This legislation brings Armenia into technical 
compliance with its obligations under the International 
Convention on the Suppression of the Financing of Terrorism, 
UN Security Council Resolution No. 1373 (2001); the 
effectiveness of the implementing regulations have yet to be 
seen. 
EVANS