Kyrgyzstan Makes Progress in Anti-Terrorist Financing Regulations, But Remains Partially Compliant with FATF Recommendations

In its latest evaluation, Kyrgyzstan has demonstrated significant progress in implementing anti-terrorist financing regulations, but still falls short of meeting some key standards set by the Financial Action Task Force (FATF).

Progress and Challenges

According to the report, Kyrgyzstan scored partially compliant (PC) in several areas, including:

• Assessing risk and applying a risk-based approach: The country has made progress in assessing risks related to terrorist financing, but still needs to improve its risk-based approach.
• National cooperation and coordination: Kyrgyzstan has strengthened its national cooperation and coordination mechanisms, but still requires improvement.
• Targeted financial sanctions related to terrorism and terrorist financing: The country has implemented targeted financial sanctions, but their effectiveness is limited due to a lack of resources and capacity.

However, the report found that Kyrgyzstan was:

• Largely compliant (LC) in areas such as:
  • Confiscation and provisional measures
  • Terrorist financing offence
  • Customer due diligence
• Non-compliant (NC) in areas including:
  • Regulation and supervision of DNFBPs
  • Transparency and beneficial ownership of legal persons
  • Mutual legal assistance: freezing and confiscation

FATF Recommendations

Kyrgyzstan’s anti-terrorist financing regulations were evaluated based on 40 key recommendations set by the FATF. The report found that while the country has made significant progress in implementing some requirements, it still needs to address several key shortcomings.

The report notes that Kyrgyzstan has a comprehensive legal framework for combating money laundering and terrorist financing, but its implementation is often limited due to lack of resources and capacity. Additionally, the country’s financial intelligence unit lacks sufficient powers and resources to effectively conduct investigations and share information with other countries.

Recommendations

Despite these challenges, Kyrgyzstan has made significant progress in recent years, including strengthening its legal framework and increasing cooperation with international partners. The report recommends that Kyrgyzstan continues to strengthen its anti-terrorist financing regulations and implementation, particularly in areas such as:

• DNFBPs
• Mutual legal assistance

By addressing these shortcomings, Kyrgyzstan can further improve its efforts to combat terrorist financing and money laundering, and meet the FATF’s recommendations.