Kyrgyzstan Struggles to Combat Money Laundering

Kyrgyzstan Struggles to Combat Money Laundering Amid Global Financial Isolation

A Challenge to the Country’s Economy

BISHKEK, KYRGYZSTAN - The Central Asian country of Kyrgyzstan is facing significant challenges in combating money laundering (ML) and maintaining its connection to the global financial system. The country’s vulnerability to ML and drug traffic-related financial flows from Afghanistan has led several large international banks to sever their correspondent accounts with Kyrgyz banks, a phenomenon known as “de-risking.” This has severely impacted Kyrgyzstan’s ability to make trade-related payments and receive remittances.

Addressing the Challenges

To address these challenges, the High Technology Park of the Kyrgyz Economy and the U.S. Embassy in Bishkek invited the Financial Services Volunteer Corps (FSVC) Managing Director Chad Kilbourne to deliver a webinar on effective anti-money laundering (AML) policies that meet international standards. The event was attended by representatives from the Central Bank of Kyrgyzstan, the Financial Intelligence Unit, and the Kyrgyz Banking Association.

Key Topics Covered in the Webinar

Adopting a Risk-Based Approach to Supervision and Compliance: This approach involves identifying and assessing risks associated with financial transactions and institutions.
Leveraging Low-Cost IT Solutions: Using technology can help facilitate the work of compliance officers, supervisors, and investigators in strengthening the AML chain.

Impact of De-Risking

Participants expressed great interest in the webinar, citing the severe impact of de-risking on their economy. COVID-19 has further exacerbated remittance flows and damaged many emerging economies, highlighting the need for countries like Kyrgyzstan to develop strong financial institutions and practices that meet international standards.

FSVC’s Commitment to Supporting Countries

FSVC is committed to supporting countries in strengthening their AML/CFT regimes, including through training and capacity-building programs. The organization has implemented successful programs in over 30 countries, providing over $13 million in donated services.

Expanding Program Activity in Central America

In related news, FSVC is expanding its program activity in Central America and welcomes applications from senior-level volunteer experts who can deliver activities in Spanish.