Wednesday, August 22 2012 18:55
Armenian Central Bank: Financial operations of Iran via Armenian banks beyond international sanctions technically impossible
ArmInfo. Armenian banks cannot make financial transactions with private Iranians or Iranian organizations included in the sanctions lists of the UN Security Council, Daniel Azatyan, Head of the Financial Monitoring Center (FMC) of the Armenian Central Bank said at a briefing, Wednesday.
"UN Security Council imposed financial and economic sanctions on Iran. And all the countries are to observe those sanctions. Financial operations of Iran via Armenian banks beyond international sanctions are technically impossible, for the names of privates and organizations included in the lists are saved in the database of relevant bank programs. Consequently, any coincidence of data during the customer identification process automatically bans transactions with the given person or entity," Azatyan said.
He said that the owners of Armenian banks demand their executive staffs to strictly observe all the measures and demonstrate maximum vigilance not to discredit the banks' good names. In this context, Azatyan said that assets of the Armenian banking system are too little to afford harm to the name of even one bank. "That will damage not only the banking system but also the country, in general," said the head of the Financial Monitoring Center. He told media that to exchange relevant information, the FMC cooperates with Iran's financial supervision agency within permissible limits. Iran is one of the candidates to the The Egmont Group of Financial Intelligence Units and Armenia and Ukraine come out as guarantors, he said.
Earlier, on Wednesday, the Armenian Central Bank refuted foreign media reports on broad activity of Iranian banks in Armenia. Armenian Central Bank has disseminated a statement in response to the article published by Reuters Agency "Iran looks to Armenia to skirt bank sanctions". "The banks in the Republic of Armenia, operating under the supervision of the Central Bank of Armenia, are subject to the laws of the Republic of Armenia, the regulations of the Central Bank of Armenia, and the banks' internal rules. One of the supervisory tiers of the Central Bank of Armenia is the provision of the adequate implementation of financial sanctions imposed on certain countries under relevant decisions of international organizations, such as the UN Security Council Resolutions. The banks in the Republic of Armenia, including "ACBA- Credit Agricole Bank" CJSC, hold no correspondent accounts with banks and financial institutions in the Islamic Republic of Iran. The banks in the Republic of Armenia are strictly bound to customer due diligence rules, in order to avoid any direct or indirect financing of individuals and companies related to nuclear proliferation programs.
The Central Bank of Armenia will follow its supervision over the behavior and transactions of all financial institutions and their customers in the Republic of Armenia, in order to safeguard its financial system from any destabilizing effects," the CB declared.
To recall, Reuters published the above article on August 21. It says: A U.N. panel of experts that monitors compliance with the sanctions against Tehran recently submitted a report to the U.N. Security Council's Iran sanctions committee that concluded Iran was constantly searching for ways to skirt restrictions on its banking sector.
"One state bordering Iran informed the Panel of requests from Iran to open new financial institutions," the report said. "The requests were not pursued apparently because of that country's burdensome legislation."
Several U.N. diplomats familiar with the panel's work confirmed that the unnamed state was Armenia, where Iran already has banking ties. Regarding Armenia, the Western intelligence report cited Armenian bank ACBA Credit Agricole Bank, a full-service institution that does business with individuals and companies and had some $574 million in assets last year, as one of Iran's principal targets.
A Western U.N. diplomat who closely follows the sanctions on Tehran confirmed that ACBA was "a bank that has come up in connection with Iran." He declined to provide details of any potentially illicit ACBA transactions linked to Iran.
Ashot Osipyan, chairman of the Union of Armenia's Banks, said it was impossible ACBA had any ties with Iran. "Armenian banks are financing only Armenia's economy," he said.
ACBA Chief Executive Officer Stepan Gishian was similarly categorical in his denial of helping Iran skirt sanctions.
"We finance exclusively the economy of Armenia," he said. "We don't have any relationship with Iran. We never have, we don't now and furthermore we don't plan on becoming a channel for financing Iran. What you're saying is complete nonsense."
The central bank statement said that "banks in the Republic of Armenia, including 'ACBA-Credit Agricole Bank' CJSC, hold no correspondent accounts with banks and financial institutions in the Islamic Republic of Iran."
As for Mellat Bank, the Central Bank of Armenia declared: ""Mellat Bank" CJSC has been operating in the Republic of Armenia since 1996; its clientele is primarily composed of small and medium enterprises involved in the foreign trade between the Islamic Republic of Iran and the Republic of Armenia, as well as of tourists and students. The bank's activities and assets have dramatically decreased during the past 3-4 years; in the period from December 31, 2010 to July 1, 2012, the banks' assets have decreased by more than 50%, dropping from 88 million US dollars to only 40 million US dollars. "Mellat Bank" CJSC holds no correspondent accounts either in the European Union and the United States of America or in the Republic of Armenia."
The Financial Monitoring Center (FMC) was established in 2005 as a separate unit in the structure of the Central Bank of Armenia. The FMC is an administrative-type financial intelligence unit, which acts as an intermediary between reporting entities and law enforcement authorities. The mission of the FMC is to combat money laundering and terrorism financing (AML/CFT).
The main function of the FMC is to collect, analyze and exchange information for AML/CFT purposes. In addition, the FMC represents the Republic of Armenia in several international organizations and structures, while actively participating in international AML/CFT initiatives.
The directions and targets of the AML/CFT regime are defined under the National Strategy for Combating Money Laundering and Terrorism Financing.
The authorities of the FMC are defined under the Republic of Armenia Law on Combating Money Laundering and Terrorism Financing, while the organizational structure and functions of the FMC are defined under the FMC Statute. The Financial Monitoring Center of the Central Bank (CB) of Armenia became a full member of Egmont Group, which unites the financial intelligence services of over 100 countries of the world for the joint struggle against laundering of illegal incomes.
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