Azerbaijan — Country Risk Report

Azerbaijan (Europe • Eastern Europe). Risk report as of the 19 Jun 2026 FATF plenary.

Moderate country risk, with governance and transparency concerns. Azerbaijan's country risk score is 4.3/10, placing it in the moderate-risk band. The principal driver is weak voice and accountability, alongside corruption risk. Azerbaijan is not currently FATF grey- or black-listed. Azerbaijan is not subject to comprehensive country-wide sanctions. Firms should apply additional scrutiny where exposure involves state-linked entities, restricted sectors, sensitive technology, dual-use goods or politically exposed counterparties.

Recommended treatment

Standard due diligence, with enhanced checks for defined risk triggers.

At a glance

• FATF status: Not currently listed (one indicator only; it does not set the overall country risk rating by itself)
• Comprehensive country sanctions: none identified. Targeted sanctions exposure: possible, screen applicable persons, entities and sectors
• Government effectiveness and rule of law: 5.2/10
• Corruption (CPI 2025): 30/100, rank #130 of 182
• Enforcement data: not yet assessed (no RegActions coverage)

Country Risk Score: 4.3/10 (Moderate)

Higher score means higher country risk (global average 4.6). Full information available. Strong data coverage. Enforcement activity and CPI are shown for context but do not change the score.

All three parts of the score are available.

How this score was calculated

• Financial crime controls: 5.4/10 — 50% of this score
• Government effectiveness and rule of law: 5.2/10 — 30% of this score
• International sanctions: 0.0/10 — 20% of this score

International sanctions contributes 0.0 because the complete UN, UK, EU and US review found no direct country-level sanctions programme. People or organisations connected to the country may still appear on sanctions lists.

Principal risk drivers

• Voice & accountability — 6.9/10
• Corruption (WGI) — 6.8/10

Mitigating factors

• Not currently on the FATF grey or black list.
• No comprehensive country-wide sanctions programme.
• Comparatively stronger political stability (3.7/10).
• Risk is concentrated in specific counterparties, sectors and transactions rather than applying uniformly.

Business impact

• Customer onboarding (Medium): Additional ownership and control verification may be required.
• Payments and transactions (Medium): Review transaction purpose, counterparties and geographic routing.
• Trade and export activity (Medium): Screen goods, end users and potential dual-use exposure.
• Corporate clients (Medium): Assess state ownership, government links and political exposure.
• Ongoing monitoring (Medium): Apply alerts for ownership changes, sanctions and geopolitical developments.

Recommended controls

• Verify ultimate beneficial ownership using more than one reliable source.
• Identify state ownership, government influence and politically exposed persons.
• Screen entities, directors and beneficial owners against applicable sanctions lists.
• Apply enhanced review to technology, defence, telecommunications, financial services and dual-use activity.
• Document transaction purpose and source of funds where cross-border structures are complex.
• Escalate unresolved ownership opacity or adverse information to Compliance.

Enhanced due diligence triggers

• State ownership / control
• PEP involvement
• Sensitive / restricted sectors
• Opaque ownership
• Adverse media
• Dual-use goods & technology
• High-risk intermediary routing

FATF status: Not currently listed

Azerbaijan is not on the FATF grey or black list as of the 19 Jun 2026 plenary.

Source details

International sanctions by issuing body

• UN: No
• EU: No
• UK: No
• US: No

No means the complete UN, UK, EU and US review found no direct country-level programme. People or organisations may still appear on sanctions lists.

Government effectiveness and rule of law (World Bank 2024, percentile)

• Government Effectiveness: 55/100
• Regulatory Quality: 57/100
• Rule of Law: 49/100

Regulators and legal framework

FATF network

FATF network via MONEYVAL.

• Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL)

Last mutual evaluation: 2024 · report

National regulators

Regulator profiles not yet available on RegActions.

FIU: Egmont Group member (FMS)

Framework signals

• FATF listing: Not currently listed
• International sanctions: no listed programme identified
• Corruption (CPI 2025): 30/100, rank #130 of 182
• Rule of law (WGI): 4.6/10 risk

Sector exposure

• Banking & payments (Low): No FATF listing, rule-of-law governance within normal range
• Trade & export controls (Low): No sanctions programme or FATF black-list constraint identified
• Crypto & virtual assets (Elevated): Weak accountability governance (WGI 6.9/10 risk)
• Real estate & luxury assets (Elevated): Elevated corruption exposure (CPI 30/100)
• State-linked & procurement (Elevated): State-capture exposure (corruption WGI 6.8/10)

Derived from sanctions tier, FATF listing, World Bank WGI governance and CPI; no per-sector dataset is asserted.

Azerbaijan: analysis

Azerbaijan's profile is governance-derived, with no FATF or sanctions overlay. Corruption (elevated) and voice and accountability (elevated) are by far the weakest domains, reflecting a centralised, resource-dependent political economy in which state-linked elites hold significant banking, energy and construction interests. Rule of law and institutions (moderate) and political stability (moderate) are relative strengths. The CPI reading is consistent with entrenched, high-level corruption. MONEYVAL's fifth-round mutual evaluation, published in February 2024, found a fair understanding of risk but concluded that fundamental improvements are needed in the supervision of financial institutions and DNFBPs, and that money-laundering investigations and prosecutions must be pursued more effectively. Azerbaijan was placed in enhanced follow-up. The historical Azerbaijani Laundromat, a roughly 2.9 billion US dollar scheme run through the International Bank of Azerbaijan and European shell companies between 2012 and 2014, illustrates the trade-based and correspondent-banking typologies that firms should treat as live.

Outlook

Azerbaijan's risk environment is anchored by oil and gas revenues that concentrate wealth and constrain accountability, making politically exposed persons and state-linked entities the central due-diligence concern. Beneficial-ownership opacity and weak DNFBP supervision, both highlighted by MONEYVAL, sustain elevated laundering risk despite the absence of any FATF listing. The next FATF plenary in October 2026 is not expected to change the clean listing, but the MONEYVAL enhanced follow-up cycle will be the key indicator of whether supervisory and enforcement deficiencies are being addressed. Firms should apply enhanced due diligence to Azerbaijani PEPs, extractive-sector counterparties and correspondent relationships.

Key watchpoints

• Apply enhanced due diligence to politically exposed persons and state-linked entities across banking, energy and construction.
• Track MONEYVAL enhanced follow-up reporting on supervision of financial institutions and DNFBPs and on money-laundering prosecutions.
• Assess beneficial-ownership transparency and correspondent-banking exposure, given the Azerbaijani Laundromat typologies.
• Monitor oil-and-gas trade-finance and re-export flows for trade-based money-laundering indicators.

Assessment currency

• FATF status: Not listed (as of 19 Jun 2026)
• Sanctions exposure: None identified (as of Jul 2026)
• Governance (WGI): Latest dataset incorporated (as of 2024)
• Corruption (CPI): 30/100 (as of 2025)
• RegActions assessment: Reviewed (as of 19 Jun 2026)

Public evidence layer

FATF action: none. No FATF call-for-action or increased-monitoring status was identified at the latest plenary. This does not establish low risk.

Contextual signals (not scored)

• FATF network membership: FATF regional network: MONEYVAL (present, as of 2026-07)
• EU non-cooperative tax jurisdictions: Not listed in Annex I (absent, as of 2026-02-17)
• Egmont Group FIU: FMS (present, as of 2026-07-17)
• Beneficial-ownership register: No live register identified in the source (unavailable, as of 2026-07-17)
• Transparency International CPI: 30/100, rank 130 (present, as of 2025)

Evidence freshness

• FATF monitored-jurisdiction status: current; data 2026-06-19
• FATF mutual evaluation and follow-up ratings: current; data 2026-07-31; follow-up 2025-12; base assessment 2024-02
• World Bank governance indicators: current; data 2024
• UN, UK, EU and US sanctions regimes: current; data 2026-08-13

Contextual signals are public evidence only and do not change the immutable v2 score.

Download evidence PDF · CSV · JSON

Regional peer scores

• Belarus: 6.0/10 (High)
• Bosnia and Herzegovina: 6.0/10 (High)
• Bulgaria: 6.0/10 (High)
• Monaco: 6.0/10 (High)
• Montenegro: 6.0/10 (High)
• Russia: 6.0/10 (High)

Source: FATF black & grey lists · World Bank WGI (CC BY 4.0 — World Bank WGI) · TI CPI (CC BY-ND 4.0 — Transparency International, display only)