This page provides an overview of Azerbaijan’s anti-money laundering (AML) legal framework and supervisory expectations for financial institutions – including those evaluating AML software in Azerbaijan (often searched locally as AML proqram təminatı ), submitting suspicious transaction reports (STRs) via the Financial Monitoring Service’s system, and implementing sanctions screening in line with local regulations.
Last Updated: 2025-09-22
Azerbaijan’s AML/CFT regime is anchored in the Law on the Prevention of the Legalization of Criminally Obtained Funds or Other Property and the Financing of Terrorism (2009 AML/CFT Law). This primary law imposes robust obligations on banks, insurers, securities firms, payment providers, and other “monitoring participants” – from thorough customer due diligence (CDD) at onboarding and ongoing monitoring, to identifying and verifying ultimate beneficial owners (UBOs), enhanced due diligence for high-risk clients like Politically Exposed Persons (PEPs), continuous screening against international and domestic sanctions lists, prompt STR reporting to the Financial Monitoring Service (FMS), recordkeeping, and strong internal controls . The FMS serves as Azerbaijan’s Financial Intelligence Unit (FIU), empowered to receive and analyze STRs . Sectoral regulators such as the Central Bank (for banking and currency exchange), capital market and insurance authorities, and other agencies oversee compliance in their respective domains to ensure AML laws are adhered to across all obliged entities. All STR filings in Azerbaijan are submitted electronically via the FMS’s portal , and both regulators and financial institutions increasingly expect automated, auditable compliance systems (rather than manual processes) to handle the growing volume and complexity of transactions.
Azerbaijani banks and fintech companies are adopting modern RegTech platforms to meet these requirements efficiently. H3M’s KROTON compliance platform is one such end-to-end solution, providing integrated modules for every key AML function. For example, KROTON’s KYC onboarding module captures and verifies customer identity documents, screens clients (and their beneficial owners) against sanctions and PEP watchlists in real time, and ensures no account is opened without all required checks. The transaction monitoring engine continuously analyzes account activity using risk-based scenarios (rules and AI analytics) to detect unusual patterns, while an adverse media screening tool (e.g. RUMI) monitors news for any negative information on clients. The platform consolidates alerts into an investigation Case Manager that guides compliance officers through reviewing and documenting each case, and can auto-generate STR reports in the format required by the FMS . By centralizing customer data, due diligence records, and reporting workflows with full audit trails, an advanced platform like KROTON helps Azerbaijani financial institutions maintain compliance with the 2009 AML/CFT law and FMS guidelines more effectively – increasing transparency and confidence in their AML program.
Under Azerbaijan’s AML law, suspicious transactions should be reported to the Financial Monitoring Service (FMS) without delay once identified as suspect. In practice, this means filing an STR within about 3 business days of determining that a transaction is suspicious, via the FMS portal.
Azerbaijani regulations require financial institutions to keep customer identification and transaction records for at least 5 years after the end of the business relationship or one-off transaction. This retention period can be extended if authorities request, ensuring older records are available for inspections or investigations.
Full customer due diligence is required in Azerbaijan whenever a new customer relationship is established and for any occasional transaction above the designated threshold (around 15,000 AZN). Additionally, institutions must conduct KYC any time there is a suspicion of money laundering or terrorist financing, regardless of the transaction amount.
The AML system is an electronic reporting platform used by Azerbaijan’s FIU (the Financial Monitoring Service) to receive suspicious transaction reports and other filings. Banks and other obliged entities in Azerbaijan must register and submit their STRs through the FMS AML web portal, which standardizes and secures the reporting process.
Yes. In practice, banks and other financial institutions in Azerbaijan deploy specialized AML software (referred to as “AML proqram təminatı” in Azerbaijani) to meet regulatory requirements. These platforms provide automated tools for KYC checks, transaction monitoring, sanctions screening, and reporting, helping firms comply with the 2009 AML/CFT law and the FMS’s guidelines more efficiently.
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