A draft law amending the Law of the Republic of Azerbaijan "On the Central Bank of the Republic of Azerbaijan" was discussed at a plenary session of the Milli Majlis. FinFly reported on this.
According to the document, the Central Bank of Azerbaijan will act as the supervisory authority for financial institutions defined by the Law "On Combating the Legalization of Property Obtained by Crime and the Financing of Terrorism," as well as for the financial groups that include these institutions. Supervision will be carried out in the manner and in the cases stipulated by that law and the Law "On Targeted Financial Sanctions."
The Central Bank of Azerbaijan will periodically assess the risk profiles of financial institutions and financial groups in the area of combating the legalization of criminal proceeds and the financing of terrorism, including the risks of non-compliance with the requirements of the relevant law. In addition, a reassessment will be conducted in the event of significant changes in the management of a financial institution or the financial group to which it belongs, or in their operations. Such changes include reorganization, a change of beneficial owners, a change in the types of activity of the financial institution, its client base or the geographic scope of its operations, as well as an increase in the intensity or volume of operations by 40 percent or more compared with the previous calendar year.
To carry out supervisory measures provided for by the laws "On Combating the Legalization of Property Obtained by Crime and the Financing of Terrorism" and "On Targeted Financial Sanctions," the Central Bank of Azerbaijan will have the right to request documents and information from financial institutions or financial groups on the basis of a written request within the period specified in that request.
The frequency and intensity of the Central Bank of Azerbaijan's supervisory measures will be determined taking into account the following factors: the risks identified as a result of assessing the risk profiles of financial institutions or financial groups, as well as their policies, internal rules, control mechanisms and procedures; the risks of legalization of property obtained by crime, financing of terrorism, proliferation of weapons of mass destruction and financing of their proliferation existing at the national level; and the characteristics of financial institutions and/or financial groups, including the diversity and number of financial institutions, as well as the extent of the powers granted to them by a normative legal act within the framework of a risk-based approach.
Supervision of financial groups that include banks, local and foreign insurers engaged in accumulative life insurance, reinsurers, insurance intermediaries, investment companies, investment funds and their managers, as well as representative offices of foreign investment funds, for the purpose of combating the legalization of property obtained by crime and the financing of terrorism, will be carried out on a consolidated basis.
