From Armenia in brief: Central Banks bans Western Union transfers

Published: Saturday August 30, 2008

Central Bank of Armenia. Photolure

According to the press service of the Central Bank of Armenia (CBA), all commercial banks operating in Armenia were ordered to immediately stop all cooperation agreements with the international money transfer company Western Union. According to bank officials, Western Union, without prior warning, refused to wire cash transfers to Karabakh.

According to RFE/RL, Western Union was responding to pressure from Azerbaijan. The National Bank of Azerbaijan (NBA) on August 1 instructed Azerbaijani commercial banks to stop transferring money via Western Union and Money Gram. According to the NBA, any financial operations in "occupied Azerbaijani territories" are illegal.

Grigor Ghonjeyan, member of the CBA board, told RFE/RL that Western Union's position is "inconsistent" and "unprincipled." According to the bank official, the CBA ban is not political, but rather a matter of containing any potential risk.

According to Mediamax, the CBA stated, "There are cases of unfounded violation of agreement provisions between Western Union and several banks operating in Armenia. Thus, in branches of several banks the money transfer system stopped service, which can harm the operations of the banks, their financial status, lead to an unexpected situation in the sphere of money transfers, as well as influence the economic, financial and real sectors of the country."

Western Union started cooperation with Armenian banks in 1995. In 1996 it was officially registered in Armenia. Most of the commercial banks of Armenia are members of this system. Arminfo reports that according to the CBA, between January and March 2008, Western Union was in third place on the money transfer market: a total of 8.3 billion AMD was transferred during the period with 88.7 percent (7.4bln AMD) into Armenia.

Armenia's Central Bank may reconsider its position if Western Union resumes money transfers to Karabakh.