Combating Financing of Terrorism in Kazakhstan: A Mixed Bag
Kazakhstan’s efforts to combat the financing of terrorism have been deemed “largely compliant” by the Financial Action Task Force (FATF) according to a recent report. While the country has made significant progress in implementing key measures, there are still areas that require improvement.
Progress and Challenges
The FATF report evaluates Kazakhstan’s compliance with 40 recommendations aimed at preventing the misuse of financial systems for terrorist financing and money laundering. The country scored high marks in several areas, including:
- National cooperation and coordination (R.2): Kazakhstan demonstrated effective national cooperation and coordination among relevant authorities.
- Confiscation and provisional measures (R.4): The country has established a robust system for confiscating and freezing assets related to terrorist financing and money laundering.
- Transparency and beneficial ownership of legal persons (R.24): Kazakhstan has implemented measures to ensure transparency in the beneficial ownership of companies.
However, the report highlights several areas where Kazakhstan fell short:
- Targeted financial sanctions related to terrorism and terrorist financing (R.6): The country was deemed “partially compliant” due to inadequate implementation of targeted financial sanctions.
- Effective customer due diligence (R.10): Kazakhstan struggled with implementing effective customer due diligence measures, which are essential for preventing money laundering and terrorist financing.
- Record-keeping requirements (R.11): The country also faced challenges in maintaining accurate and detailed records related to financial transactions.
Recommendations for Improvement
To address the remaining gaps in its regulatory framework, the FATF has recommended that Kazakhstan implement additional measures to strengthen its anti-money laundering and combating the financing of terrorism regime. These include:
- Improving customer due diligence
- Enhancing record-keeping requirements
- Increasing transparency in beneficial ownership
By implementing these recommendations, Kazakhstan can bring itself into full compliance with FATF standards and effectively combat the financing of terrorism.