Financial Crime World

Kyrgyzstan Takes Steps to Prevent Financial Crime, But Faces Challenges

Strengthening Anti-Money Laundering Measures

In recent years, Kyrgyzstan has made significant strides in strengthening its anti-money laundering (AML) measures. The country has demonstrated improvements in several areas, including:

  • National Cooperation and Coordination: Kyrgyzstan has shown improvement in national cooperation and coordination, with a focus on addressing the risks of money laundering and terrorist financing.
  • Terrorist Financing Offence: The country’s authorities have taken steps to enhance their understanding and application of the terrorist financing offence, which is crucial in preventing the financing of terrorism.
  • Cash Couriers: Kyrgyzstan has improved its measures to prevent cash couriers from being used for money laundering and terrorist financing activities.

Challenges Remain

Despite these improvements, Kyrgyzstan still faces challenges in implementing some of the technical requirements outlined by the Financial Action Task Force (FATF) recommendations. The country remains partially compliant with regards to:

  • Risk-Based Approach: Kyrgyzstan has not fully implemented a risk-based approach to combating money laundering and terrorist financing.
  • Transparency and Beneficial Ownership: The country’s financial institution secrecy laws have not been fully updated, raising concerns about the ability to prevent money laundering.
  • DNFBPs: Customer Due Diligence: Kyrgyzstan has not effectively implemented customer due diligence requirements for designated non-financial businesses and professions (DNFBPs).

Recommendations and Next Steps

The FATF report emphasizes that Kyrgyzstan’s efforts to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) framework are crucial to preventing financial crime and maintaining international cooperation. To address the identified shortcomings, the country should prioritize the implementation of targeted measures, including:

  • Regulation and Supervision of DNFBPs: Kyrgyzstan should enhance its regulation and supervision of DNFBPs to ensure effective oversight.
  • Targeted Financial Sanctions: The country should implement targeted financial sanctions related to terrorism and terrorist financing, as well as proliferation.
  • International Cooperation: Kyrgyzstan should continue to work closely with international partners to enhance its AML/CFT framework and ensure that the country is better equipped to prevent financial crime.