Risk-Based Approach to Anti-Money Laundering in Kyrgyzstan Receives Mixed Evaluation

Introduction

A recent report from the Financial Action Task Force (FATF) has evaluated Kyrgyzstan’s efforts to implement a risk-based approach to anti-money laundering. The report highlights both progress and areas of improvement for the country.

Progress and Challenges

Assessing and Managing Risks

Kyrgyzstan has made significant progress in assessing and managing risks related to money laundering and terrorist financing. However, there is still room for improvement in national cooperation and coordination mechanisms, as well as the ability to confiscate and freeze assets linked to illicit activities.

Key Findings

Compliance with FATF Recommendations

• Customer Due Diligence: Kyrgyzstan was found to be “largely compliant” with FATF recommendations on customer due diligence.
• Record Keeping and Reporting: The country also showed significant compliance in record keeping and reporting of suspicious transactions.
• Transparency and Beneficial Ownership: However, Kyrgyzstan received a lower rating in areas such as transparency and beneficial ownership of legal persons and arrangements.
• Regulation and Supervision: The country’s regulation and supervision of financial institutions were also found to be lacking.

Areas for Improvement

• Targeted Financial Sanctions: Kyrgyzstan has not fully implemented targeted financial sanctions related to terrorism and terrorist financing.
• International Cooperation: The country also needs to improve its international cooperation on issues such as mutual legal assistance and extradition.

Conclusion

The FATF’s evaluation suggests that while Kyrgyzstan has made some progress in implementing a risk-based approach to anti-money laundering, it still has significant work to do to meet its obligations under international standards.