FMS � service without service

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-Akram bey, what is the hitch of ther structure? Why is it included as a component either of the Central Bank, or the Chamber; either independent or included in the Ministry of Tax?

-Until rtecently the structure acted to take international circles in. Like the case with the Ombudsman. Look here, we have the same structure. The difference between the FMS and the Ombudsman is that the financial sector may be sanctioned for abortive activity of the FMS. The point is that we have not amorphous (as is the case with human rights protection) but specific international obligations.

It should be acknowledged that the creation of the Financial Monitoring Service, first, under the Central Bank was explained as being due to the fact that it embraced the banking sector, in the first turn. In the reviewed period the Central Bank was a controlling unit. Later on, the control over banks was delegated to the Chamber of Financial Market Control (CFMC) and the FMS - to the PНFR, i.e. it acted as an ordinary structure even outside the CFMC. That was a real attitude to the FMS issue: in fact, we do not need it but we are consent to accept it and thus please international structures, so its structure does not matter at all. When the structure was included in the Chamber, they forgot that international structures demanded to ensure independence of this structure. As soon as international structures learned about incompliance with their demand, they reminded our state about obligations adopted. As a result, the FMS was given an independent status in May last year. However in spite of the fact that more than a year has passed since, the structure has no management yet. You want a status of independence? Please, take it. But we are in no need of the activity of the organization!

Why is there no need in this organization? The problem is that dirty money laundering is habitual for Azerbaijan due to high level of corruption and continuing accumulation of initial capital. Should the FMS really fight with corruption, not only functionaries but most entrepreneurs would be made answerable. Account here has to be taken of the fact that the State Security Service of the Republic is successful in struggling the terrorism financing. It should be recalled that Azerbaijan is a model country to deal with terrorism.

As is known, since the end of the last year the country has started a real struggle against the corruption and shadow economy. The Ministry of Tax is a leader on this track and has always been the most advanced economic block of the country. Note that FMS" membership in the Central Bank and Chamber of Financial Market Control is wrong, for they are an integral part of the banking system and uninterested in FMS activity. The essential point to remember is that the Ministry of Finance activity is of strategic nature. Note that the cadre potential of the Ministry of Economy is very poor and comes to idle talk. Thus, the most optimal structure is the Ministry of Tax together with its law-enforcement body functions. From this standpoint, the decision is logical.

When adjusted for the fact that this time everything came from intrinsic, not international, need, authors of the decree defied independence as basic requirement of international structures.

For this reason the decree provided for the FMS" transfer to the Ministry. It"d be expedient if the FMS would be under the Ministry as an independent legal entity, at least, under present conditions. It is obvious that it cannot operate as an absolutely independent unit but under a ministry, not subordinated though. Otherwise, it may face pressures of international structures. In a word, the FMS starts its practical activity in Azerbaijan. It was no mere coincidence that the FMS has been consigned to the party most interested in this structure"s activity. At any rate, it is essential to qualify the status of the unit.

- As a matter of fact, what"s the goal of this organization? Are there any specific results of the activity of the organization?

-The aim of the structure is to fight dirty money laundering and terrorism financing. It should be appreciated that the struggle against the dirty money laundering provides for prevention of illegal money legalization. For example, banks cannot accept money of corruptionists. Note that the initial capital of any country is gained largely through criminal activity. It was typical for the West; however, the process had long been over there. At present, they are warning elites of third countries against criminal capital accumulation. Traditional double standards! It is natural that third countries elites are eager to evade these demands. As a last resort, they undertake not to finance terrorism.

That"s why we fail to get any specific result from FMS activity. As was the case with worldly-wise policeman Kerbalayi Zal from "Bomb" story by Hakverdiyev, our Financial Monitoring Service has failed to cry "Bomba rabotay!" In other words, the FMS failed to make corruptionists answerable. The only responsibility of the FMS is to take part in international actions and create favorable impression. Однако ситуация сейчас начинает меняться: завершился процесс накапливания первичного крупного капитала.

-Has anybody in Azerbaijan been called to account in Azerbaijan for dirty money laundering of terrorism financing?What do you think, nobody is engaged in money laundering in Azerbaijan? Why is FMS activity ineffective? What is the reason? Who is interested in FMS failure?

-I"ve told that nobody has been called to account. True, there are lots of those laundering money both in public structures and business circles, even those heard from London private residences. It is a great number of those engaged in money laundering that deranges the FMS activity. Where some action seems to be ordinary, is it permissible to qualify it as a crime? Corruptionists in our country are acquitted as saying that "they are resourceful" while honest-minded people are called "simpleton." Is there anybody interested in FMS activity?

What will be results of this structure"s transfer to the Ministry of Tax? It is improbable that any functionary or oligarch in Azerbaijan would be punished for dirty money laundering?

-As I noted above, the Ministry of Tax is interested in FMS activity, for it is struggling against the shadow economy. Owing to the fact that this activity started from point zero, so it"d be unrealistic to wait for effective results. However, sooner or later it is sure to be over, the evolution of our development makes it inevitable!

Some experts allege that the most acceptable variant for Azerbaijan is FMS" independence. To their thinking, despite Ministry of Tax" certain fiscal dues authorities, they display no control over the banking sector. In their words, dirty money laundering is not restricted to tax evasion only, it is much wider. Am I right?

-At any rate, the FMS cannot be absolutely independent. It ought to be accountable to a public structure. It is accepted worldwide. Our FMS should be subordinated to an authoritative and influential organization. Availing of the Central Bank to control the financial system of third countries (they also enjoy independent status - has the West ever criticized the Central Bank management) the West demands independence of structures like FMS in an effort to pressure them heavier. In other words, the more internally independent is the structure of small state, the greater is its external dependence.

A comparison below seems unpleasant but an emphasis is laid on some non-governmental organizations! The most important thing is the following: the FMS must be economically independent. For this to happen, the FMS must be a legal entity under the Ministry of Tax. In turn, the Ministry of Tax is meant to exercise the general management. Also, the FMS must have specialized personnel.

At any rate, activity of this structure is not restricted to the banking system only, it is much wider. From this standpoint, it does not matter what structure the FMS is subordinated to. It has to be kept in mind that the interests of the structure and the FMS should be concordant. The structure of this sort is the Ministry of Tax.

-What do you suggest? What has to be done for unbiased and effective activity of the structure, to make it independent, without any interference from the outside?

- As I said before, the structure a legal entity should be subordinated to the Ministry of Tax. In other words, it is the responsibility of the Ministry to appoint the management of the structure, its policy and accept reports. In other questions the FMS should act independently. It should be understood that the FMS is a political structure to comply with appropriateness criterion. For instance, economic crimes in the United States are punished mercilessly.

However, some indulgences are sometimes made in the public interests. For example, Guantanamo is contrary to the law; yet, it does exist. Or like Britain that has never interested in sources of capital invested but patronized offshore, etc. The main thing is to make exceptions in the name of state, not for personal interests!