Orkhan Mammadov: Fight against money laundering is important for economic security

The fight against money laundering in Azerbaijan is of strategic importance for economic security, Orkhan Mammadov, the Chairman of the Small and Medium Business Development Agency (KOBIA) under the Ministry of Economy, said at the international scientific-practical conference themed "The role, duties and responsibilities of supervisory bodies in the fight against the legalization of criminally acquired property and the financing of terrorism" held in Baku, Report informs.

According to Mammadov, illicit financial flows weaken the economic security of states, reduce trust in financial institutions, and put the investment climate at risk: "These threats are especially strong against the small and medium-sized businesses. SMBs are often more vulnerable to uncontrolled operations and legal loopholes."

The KOBIA chairman also emphasized that the money laundering process, based on classical approaches, consists of the stages of placement, design and integration. He said that these stages form the model of the inflow of illegal funds into the economic system: "Legalized funds enter the market by creating a formal business image in the fields of investment, real estate, services and production. This creates an unequal competitive environment for transparent entrepreneurs."

According to him, the functional approach of supervisory bodies to such challenges is of particular importance: “Prioritizing risky operations, institutional cooperation between law enforcement, banking, tax and economic institutions, and automatic detection of anomalies with artificial intelligence are important issues.”

Mammadov also stressed the importance of international cooperation: “The international mechanisms to which Azerbaijan has joined – FATF recommendations, Council of Europe conventions and relevant UN frameworks – play the role of a roadmap for us.”

He noted that informing micro and small entrepreneurs prevents them from accidentally or unknowingly being involved in illegal activities: "As KOBIA, we understand this responsibility and have made calls to entrepreneurs. In the future, we plan to hold educational events on the risk of suspicious transactions and non-transparent contracts together with supervisory bodies."

The chairman added that ensuring a safe and transparent economy is a shared responsibility that falls not only on regulatory bodies, but on all segments of society.