AZERBAIJAN: DELAY IN THE IMPLEMENTATION OF THE

C O N F I D E N T I A L SECTION 01 OF 02 BAKU 000482 SIPDIS INL/C FOR VALERIE SILENSKY E.O. 12958: DECL: 06/17/2019 TAGS: ECON PGOV PTER EFIN SNAR AJ SUBJECT: AZERBAIJAN: DELAY IN THE IMPLEMENTATION OF THE AML/CTF LAW REF: BAKU 147 Classified By: POLECON Chief Robert Garverick for Reasons 1.4 (b) and ( d). ¶1. (C) Summary: Although the Anti-Money Laundering/ Counter Terrorist Financing (AML/CTF) law was signed in late February 2009, as of June 2009 progress seemed to be halted. Despite previous desire to accept technical assistance from the United States, the Government of Azerbaijan (GOAJ) was reticent to decide on a date or course of action for technical assistance. The Central Bank of Azerbaijan (CBA) told PolEcon Officers that they were no longer certain that the financial investigative unit (FIU) would be located in the CBA. However, the Presidential Administration (PA) reassured U.S. Embassy Baku DOJ representative that the FIU would be housed in the CBA, but the PA needed to finalize the implementing regulations. Following the finalization of the regulations, the GOAJ would eagerly await United States assistance in this area. End Summary. Central Bank of Azerbaijan,s Side of the Story -------------- ¶2. (U) During a mid-March 2009 meeting with CBA, the CBA informed EmbOffs that the FIU would be housed in the CBA. In response, the Embassy offered to facilitate an inter-agency team that could assist the GOAJ in coordinating implementation of the FIU. The CBA agreed this was a good idea, but wanted to wait until the statutes of the FIU were finalized. At that time, the CBA estimated that the FIU statutes would be finalized by April 2009. Since April 2009, EmbOffs attempted to organize meetings with the CBA to discuss the FIU and technical assistance. All of these requests went unanswered. ¶3. (U) On 10 June 2009, Rashad Abbasov, the Deputy Director of the International Relations Department at the CBA, informed PolEconOffs that the CBA was no longer certain that it would house the FIU. He claimed that all of the decisions relating to the FIU were uncertain, and the CBA was awaiting instruction from the PA in this regard. Because the CBA had not been informed of anything, including where the FIU would be placed, Abbasov suggested that any meetings should be delayed until the role of the CBA and any statutes or regulations concerning it, were defined. During this discussion, Abbasov inferred that it was possible the FIU might be located in the Prosecutor General,s office and projected there would be more clarity by August 2009. At which time, the CBA would happily set up an appointment with USG experts. Presidential Administration's Side of the Story -------------- ¶4. (U) On 10 June 2009, Inam Karimov, Senior Advisor, Department of Coordination of Law Enforcement Bodies, told Embassy's DOJ representative that the FIU would be located in the CBA. He claimed that as President Aliyev had already decreed by law that the FIU would be located in the CBA, there was no reason to believe that he had any intention to change what he had already signed off on. Karimov suggested that the CBA might be confused because the implementing regulations had not yet been made public, and therefore, the CBA had not been given any guidance. Karimov noted that the regulations would be finalized and presented to Parliament soon. Once the regulations are passed by Parliament, Karimov said, the GOAJ would be ready to accept foreign technical assistance. Comment -------------- ¶5. (C) Embassy Baku is concerned by the GOAJ,s potential backsliding on this issue. The creation of an FIU is a critical step in the AML/CTF process, and the apparent reluctance of the GOAJ to take actionable steps is disconcerting. At the least, publicly, the GOAJ has not done anything to further this process since February 2009, despite that the law ordered it completed by April 2009. Furthermore, the fact that CBA management is no longer certain that the FIU would be located in the CBA indicates a change of posture since the April 2009 meeting, when CBA BAKU 00000482 002 OF 002 representatives spoke with certainty that the FIU would be located in the CBA. Given the CBA,s sudden uncertainty, it is possible that some players, like the Prosecutor General,s office, are trying to influence this issue at the last minute. Alternatively, CBA officials may have been merely speculating as a result of the lack of activity on this issue. End Comment. DERSE