Kyrgyz Republic Makes Significant Progress in Combating Money Laundering and Terrorist Financing

The Financial Action Task Force (FATF) has released a report praising the Kyrgyz Republic for its significant progress in implementing measures to combat money laundering and terrorist financing.

Notable Achievements

• The country has made notable strides in providing guidance documents and feedback to financial institutions, particularly banks.
• The legal framework is largely compliant with the requirement to apply sanctions to virtual asset service providers (VASPs) for violations of anti-money laundering and counter-terrorist financing (AML/CFT) legislation.

Compliance with FATF Requirements

• The Kyrgyz Republic’s AML/CFT law classifies VASPs as financial institutions, subjecting them to similar requirements as traditional financial institutions.
• The country has a legal framework in place for international cooperation and information exchange on VASP issues, which is largely compliant with FATF requirements.

Areas for Improvement

• Criterion 15.7, which assesses the availability of guidance documents to aid in the application of AML/CFT measures developed for VASPs, was rated partially compliant.
• The legal framework provides a broad range of sanctions for AML/CFT legislation violations, but determining whether these sanctions are proportionate and dissuasive is difficult due to lack of practice.

Rating Upgrade

The FATF has upgraded the Kyrgyz Republic’s rating from Partially Compliant (PC) to Large Compliance (LC) for Recommendation 15, which assesses the country’s AML/CFT measures related to VASPs. The overall rating reflects the country’s significant progress in meeting the majority of R.15 criteria requirements.

Enhanced Monitoring

The FATF has placed the Kyrgyz Republic under enhanced monitoring and will continue to report on future progress in improving its national AML/CFT system.