Financial Crime World

Tajikistan’s Efforts to Combat Money Laundering and Terrorist Financing

Tajikistan has implemented mechanisms for appealing against listing/de-listing decisions and de-freezing of funds. However, the procedure is not detailed enough.

  • Legal grounds exist for freezing funds suspected to be involved in proliferation financing.
  • The country’s legal framework provides a solid foundation for combating money laundering (ML) and terrorist financing (TF).

Preventive Measures

Financial institutions in Tajikistan have a general understanding of ML/TF risks, but only credit institutions adopt risk mitigation measures. DNFBPs lack a good understanding of ML/TF risks and fail to take steps to mitigate them.

  • The majority of threshold and suspicious transaction reports are submitted by banks and some non-bank credit institutions.
  • There is room for improvement in the preventive measures taken by financial institutions, particularly in the DNFBP sector.

Supervision

Tajikistan’s supervisory regime is largely commensurate with the scale and scope of the country’s financial sector. However, there are shortcomings in certain areas, such as the insurance and securities sectors.

  • The licensing and supervisory regime for credit institutions, payment services, and postal money transfer sectors does a good job of preventing persons convicted of economic crimes from holding controlling interests or management functions.
  • DNFBP supervision is an area that requires further improvement to ensure effective implementation of AML/CFT measures.

Enforcement

Sanctions for non-compliance with AML/CFT requirements are regularly applied against credit institutions, but not against DNFBPs. The type of sanctions applied in the banking sector has shifted from monetary fines to written warnings, indicating a decline in violations and an increase in compliance.

  • Enforcement measures are necessary to ensure that financial institutions comply with AML/CFT regulations.
  • Further efforts are needed to enhance enforcement in the DNFBP sector.

Conclusion

Tajikistan’s efforts to combat ML/TF are ongoing, with some progress made in certain areas. However, there are still challenges to be addressed, particularly in terms of DNFBP supervision and the effectiveness of preventive measures.