Kyrgyzstan Falls Short on Banking Regulations to Prevent Financial Crime

Assessment Reveals Weaknesses in Implementing FATF Recommendations

Bishkek, Kyrgyzstan - A recent assessment has found that Kyrgyzstan is lacking in implementing key technical requirements of the Financial Action Task Force (FATF) recommendations aimed at preventing financial crime. The country scored poorly on several aspects, including its ability to assess and apply risk-based approaches to prevent money laundering and terrorist financing.

Key Findings

• Poor Assessment and Risk-Based Approach: Kyrgyzstan scored poorly in assessing risk and applying a risk-based approach to prevent money laundering and terrorist financing.
• Partial Compliance: The country was found to be “partially compliant” (PC) on aspects such as confiscation and provisional measures, customer due diligence, record keeping, and internal controls.
• Room for Improvement: Kyrgyzstan needs to improve its transparency and beneficial ownership of legal persons and arrangements, regulation and supervision of DNFBPs, and financial intelligence units.

Areas of Improvement

The report highlighted several areas where Kyrgyzstan needs to improve:

• Transparency and Beneficial Ownership: The country must enhance its ability to identify and verify the beneficial owners of legal persons and arrangements.
• Regulation and Supervision of DNFBPs: Kyrgyzstan must strengthen its regulation and supervision of designated non-financial businesses and professions (DNFBPs).
• Financial Intelligence Units: The country should improve the functioning of its financial intelligence units to enhance their effectiveness in preventing financial crime.

Call to Action

The FATF recommendations aim to prevent the misuse of the international financial system for money laundering, terrorist financing, and proliferation financing. Kyrgyzstan must take concrete steps to address the weaknesses identified in this report and implement effective measures to prevent financial crime.

In conclusion, while Kyrgyzstan has made some progress in implementing the FATF recommendations, there is still much work to be done to ensure that the country’s banking regulations effectively prevent financial crime.