Financial Crime World

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Kyrgyz Republic Makes Significant Progress in AML/CFT, Upgrades to Largely Compliant

The Kyrgyz Republic has made substantial progress in implementing the Financial Action Task Force (FATF) Recommendations, as highlighted in its latest Mutual Evaluation Report (MER). This significant step towards strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) regime has led to an upgrade in its overall rating.

VASPs Guidance and Feedback

The report notes that the Kyrgyz Republic has made significant progress in providing financial institutions with guidance documents and feedback. However, it is lacking in providing similar guidance and documents for Virtual Asset Service Providers (VASPs), which is a key area of concern.

  • Criterion 15.7: Partially Compliant
  • The country lacks guidance and documents for VASPs, making it challenging to implement effective AML/CFT measures.

Sanctions and Enforcement

The report highlights that various sanctions may be applied to VASPs, their founders, and officials for violating AML/CFT legislation. While the range of measures and sanctions is broad, determining whether they are proportionate and dissuasive is difficult due to a lack of practice in implementing these measures.

  • Criterion 15.8: Largely Compliant
  • The country has a wide range of sanctions available, but their effectiveness depends on the implementation process.

VASPs Classification

The report notes that VASPs are classified as financial institutions under the AML/CFT Law, making them subject to all requirements outlined in the law related to R.10-21. Additionally, Decree No. 331 of July 3, 2023, amended Decree No. 606 of December 25, 2018, to extend the requirements of R.16 to VASPs.

Information Disclosure and Control

The report highlights that information disclosure mechanisms, reporting obligations, and control over targeted financial sanctions are fully applicable to VASPs.

  • Criterion 15.10: Largely Compliant
  • The country has established effective information disclosure mechanisms, reporting obligations, and controls for VASPs.

International Cooperation

The Kyrgyz Republic has a legal framework in place for international cooperation and information exchange on VASP issues.

  • Criterion 15.11: Meets the Requirements
  • The country has a legal framework that meets the requirements for international cooperation and information exchange on VASP issues.

Overall Rating Upgrade

Based on the country’s significant progress in Criteria 15.1, 15.2, 15.3, 15.6, and 15.9, the overall R.15 rating is upgraded to Largely Compliant (LC).

The Kyrgyz Republic continues to be under enhanced monitoring and will report to the Eurasian Group on future progress in improving its national AML/CFT system.

Source: FATF Mutual Evaluation Report of the Kyrgyz Republic