Financial Crime World

Tajikistan Banks on International Assistance to Boost Financial Stability, Integrity

===========================================================

Tajikistan’s financial sector is set for a boost as the National Bank of Tajikistan (NBT) receives technical assistance from the US-based non-profit organization, Financial Services Volunteer Corps (FSVC). The comprehensive program aims to strengthen the country’s financial stability, integrity, and inclusion.

Objectives of the Program

The program has two main objectives:

  • Strengthening Monetary Policy and Risk Management Practices: FSVC experts will work closely with NBT officials to enhance risk management across departments and adopt a monetary policy that adapts to Tajikistan’s unique macroeconomic context. This is crucial in mitigating the country’s vulnerability to external shocks, such as the COVID-19 pandemic, war in Ukraine, and global supply chain disruptions.
  • Improving Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) Practices: The program aims to enhance AML/CFT compliance and alignment with Financial Action Task Force (FATF) standards among NBT officials and reporting entities. This will help address the country’s high risk of money laundering and terrorism financing, which has hindered its ability to maintain correspondent banking relationships with international banks.

Challenges Facing Tajikistan

Tajikistan’s economy is heavily reliant on Russian financial institutions, which are currently subject to international sanctions. The country’s geographical location and historical ties with countries such as Afghanistan, Iran, Russia, and China also pose significant challenges in maintaining a stable financial sector.

Additionally, the country has struggled to maintain correspondent banking relationships with international banks due to its high risk of money laundering and terrorism financing. This has further exacerbated its financial instability.

Conclusion

The FSVC program is a welcome development for Tajikistan’s financial sector. By strengthening monetary policy and risk management practices, as well as improving AML/CFT compliance, the country can mitigate its risks and improve its overall financial stability and integrity. With international assistance, Tajikistan can work towards a more stable and inclusive financial system.