Tajikistan’s Progress in Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

Positive Developments

While there are still areas for improvement, Tajikistan has made significant progress in implementing effective AML/CFT practices. Some key positive developments include:

• Financial Institutions’ Understanding: Almost all financial institutions have a general understanding of Money Laundering/Terrorism Financing (ML/TF) risks.
• Credit Institutions’ Compliance: Credit institutions adopt ML/TF risk mitigation measures based on enhanced Customer Due Diligence (CDD) and transaction monitoring.
• Targeted Sanctions: Targeted financial sanctions against Terrorist Financing (TF) are applied by all financial institutions based on lists published on the Financial Monitoring Department (FMD) website.

Areas for Improvement

Despite progress, there are still areas where Tajikistan needs to improve its AML/CFT practices:

• DNFBPs’ Understanding: Designated Non-Financial Businesses and Professions (DNFBPs), such as notaries, independent legal professionals, and real estate agents, lack a good understanding of ML/TF risks and fail to take steps to mitigate them.
• Licensing and Supervision: The country’s licensing and supervisory regime for credit institutions, payment services, and postal money transfer sectors is largely commensurate with the scale and scope of the financial sector, but there are shortcomings in the insurance and securities sectors.
• Risk-Based Approach (RBA) Supervision: Tajikistan plans to implement RBA supervision in the financial sector based on the findings of the national risk assessment and approved National Concept, but not all financial sector supervisors are involved in this work.
• Sanctions for Non-Compliance: Sanctions for non-compliance with AML/CFT requirements are regularly applied against credit institutions, but other FIs were not sanctioned due to a lack of authority and attention from supervisors.

Conclusion

While Tajikistan has made progress in implementing effective AML/CFT practices, there is still work to be done to improve understanding and compliance among DNFBPs and to strengthen licensing and supervisory regimes. By addressing these areas for improvement, Tajikistan can further enhance its efforts to combat money laundering and the financing of terrorism.