Azerbaijan’s Milli Majlis has adopted amendments in a third and final reading that expand the Central Bank’s risk-based supervision of financial institutions and financial groups.
The regulator will assess risks related to money laundering and terrorist financing at banks, insurance and reinsurance companies, investment companies and funds, and the entities that manage them, according to Vesti Baku.
A 40% Threshold
A new risk assessment will be required when an organization’s operations change substantially. Triggers include reorganization, a change in beneficial owners, or changes in business activities, the customer base or the geographic scope of operations.
A reassessment will also be required when the intensity or volume of transactions rises by 40% or more compared with the previous calendar year.
The frequency and scope of inspections will depend on the level of risk, the quality of internal rules and controls, and the national assessment of threats involving money laundering, terrorist financing and the financing of weapons proliferation.
Group-Wide Supervision
The amendments extend oversight from an individual financial institution to the financial group to which it belongs. The Central Bank will also be able to request documents and information in writing, with the requested material required to be submitted within the regulator’s deadline.
The bill was prepared in light of Financial Action Task Force recommendations reflected in the evaluation of Azerbaijan’s anti-money-laundering and counter-terrorist-financing system.
Approval in the third reading completes the parliamentary stage. The amendments will take effect only after the remaining legal procedures are completed.
Source: Vesti Baku