Financial Crime World

Kazakhstan’s Financial Crimes Prevention Efforts Receive Mixed Assessment

The Financial Action Task Force (FATF) has recently evaluated Kazakhstan’s efforts to prevent financial crimes, providing a mixed assessment. While the country has made significant progress in implementing anti-money laundering and combating the financing of terrorism (AML/CFT) measures, it still faces challenges in certain areas.

AML/CFT Implementation

According to the FATF’s Mutual Evaluation Report 2023, Kazakhstan is considered “partially compliant” with 14 out of 40 Recommendations related to AML/CFT. The country has implemented many technical requirements, such as:

  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Confiscation and provisional measures

However, Kazakhstan still lags behind in other areas, including:

  • Targeted financial sanctions related to terrorism and terrorist financing (largely compliant)
  • Transparency and beneficial ownership of legal persons (non-compliant)
  • Regulation and supervision of DNFBPs (largely compliant)

Strengths and Weaknesses

The report highlights several strengths in Kazakhstan’s AML/CFT regime, including:

  • Robust national cooperation and coordination mechanisms
  • Effective implementation of laws and regulations to prevent money laundering and terrorist financing

However, the report also identifies several weaknesses, including:

  • Lack of transparency and beneficial ownership information for legal persons
  • Inadequate supervision of DNFBPs

These deficiencies may pose risks to the stability and integrity of the financial system and undermine efforts to combat financial crimes.

FATF Recommendations

The FATF has called on Kazakhstan to address these weaknesses and improve its AML/CFT regime. The country is expected to provide a follow-up report in two years to demonstrate its progress in implementing necessary reforms.

Conclusion

While Kazakhstan’s AML/CFT regime shows some strengths, it still requires significant improvements to ensure that it meets international standards and effectively prevents financial crimes.