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Financial Institutions in Kyrgyzstan Fall Short on Anti-Fraud Measures

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A recent assessment of financial institution anti-fraud measures in Kyrgyzstan has revealed significant shortcomings, with many institutions failing to meet international standards.

The Mutual Evaluation Report 2018

The country’s Mutual Evaluation Report 2018, published by the Financial Action Task Force (FATF), assessed 40 key areas related to money laundering and terrorist financing. The report found that while some areas showed improvement, many financial institutions in Kyrgyzstan still lag behind in implementing effective anti-fraud measures.

Shortcomings in Anti-Fraud Measures

According to the report, Kyrgyzstan’s financial institutions were largely non-compliant with requirements related to:

Customer Due Diligence

  • Only 30% of financial institutions were found to be fully compliant with customer due diligence requirements.

Record Keeping

  • More than 50% of financial institutions failed to maintain adequate records, making it difficult to track and monitor transactions.

Internal Controls

  • Many financial institutions lacked effective internal controls, increasing the risk of money laundering and terrorist financing.

Areas Showing Improvement

The FATF report also noted that some areas showed improvement, including:

Regulation and Supervision of Financial Institutions

  • Kyrgyzstan’s regulatory bodies have made efforts to strengthen supervision and enforcement.

Financial Intelligence Units

  • The country has established a financial intelligence unit to help identify and track suspicious transactions.

Roadmap for Improvement

While the report highlights significant shortcomings in Kyrgyzstan’s anti-fraud measures, it also provides a roadmap for improvement. The government and financial institutions must work together to address these weaknesses and ensure that the country meets international standards for combating money laundering and terrorist financing.

The FATF will continue to monitor Kyrgyzstan’s progress and provide guidance on implementing effective anti-fraud measures. In the meantime, financial institutions in the country must take immediate action to strengthen their controls and procedures to prevent money laundering and terrorist financing.