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Kazakhstan Embraces Risk-Based Approach to Financial Crime Prevention

Progress and Areas for Improvement

A recent evaluation of Kazakhstan’s efforts to prevent financial crime has highlighted significant progress in implementing a risk-based approach, but also identified areas for improvement. According to the assessment, conducted by the international community, Kazakhstan has made substantial strides in implementing the technical requirements of the Financial Action Task Force (FATF) Recommendations.

Implementation of FATF Recommendations

The report praised Kazakhstan for its strong commitment to fighting money laundering and terrorist financing, citing its effective implementation of a risk-based approach to assess and mitigate financial risks. The country’s authorities have also demonstrated good cooperation with other countries in sharing information and best practices to combat financial crime.

However, the evaluation also identified several areas where Kazakhstan needs to improve:

• Strengthening laws and regulations related to:
  • Terrorist financing
  • Proliferation financing
  • Transparency of beneficial ownership of legal persons and arrangements
• Enhancing supervision and regulation of:
  • Financial institutions
  • Non-profit organizations

Progress in Implementing FATF Recommendations

The report noted that Kazakhstan has made significant progress in implementing many of the FATF Recommendations, with a majority of areas assessed as “largely compliant” or “partially compliant”. However, several areas require further improvement to meet international standards.

Global Significance

Kazakhstan’s efforts to combat financial crime are crucial not only for its own economic stability but also for maintaining global financial integrity. The country’s authorities have demonstrated a commitment to fighting financial crime and must continue to strengthen their defenses to prevent the misuse of the financial system.

Risk-Based Approach

The evaluation highlights the importance of a risk-based approach in preventing financial crime, which involves identifying and mitigating high-risk areas, such as:

• Correspondent banking
• Money or value transfer services

Kazakhstan’s progress in this area is a significant step forward in its efforts to combat financial crime.

Conclusion

While there are still areas for improvement, Kazakhstan’s commitment to fighting financial crime is evident, and the country’s authorities have made significant progress in implementing a risk-based approach to prevent financial crime.