Financial Crime World

Turkmenistan Makes Significant Progress in Combating Money Laundering and Terrorist Financing

Ashgabat, Turkmenistan - According to a recent report, Turkmenistan has made significant progress in building an effective anti-money laundering (AML), combating the financing of terrorism (CFT), and preventing proliferation financing (CPF) system.

Recognizing Threats and Mitigating Risks

Turkmenistan recognizes the threats associated with its long border with Afghanistan and the potential for infiltration by individuals involved in terrorism and terrorist financing. The country has taken steps to mitigate these risks, including classifying all public associations and religious organizations as non-profit organizations (NPOs) requiring TF risk mitigation measures.

Improvements in AML/CFT/CPF Legislation

The report notes that Turkmenistan has made significant improvements in its AML/CFT/CPF legislation. Most legal acts and other legislation relevant to the issues under review have undergone significant changes. The country has criminalized money laundering and terrorist financing offenses, established asset freezing and confiscation mechanisms, and developed strategic documents and programs to manage and mitigate risks.

Financial Monitoring Service

The Financial Monitoring Service (FMS) was established in 2018 and collects, processes, analyzes, and transmits information on transactions related to predicate offenses. While the FMS provides some support to law enforcement agencies, there is a lack of awareness among LEAs of its capacity and the intelligence it produces does not sufficiently support operational needs.

Submission of Suspicious Transaction Reports

The report highlights that only financial institutions and lawyers have submitted suspicious transaction reports (STRs) in the period between 2017 and 2021. Other FIs and DNFBPs failed to submit STRs. The received STRs are insufficient for operational analysis due to a lack of risk-based approach.

Key Findings

  • Turkmenistan recognizes the threats associated with its border with Afghanistan and has taken steps to mitigate these risks.
  • The country has made significant improvements in its AML/CFT/CPF legislation.
  • The FMS was established in 2018 and provides some support to LEAs, but there is a lack of awareness among LEAs of its capacity and the intelligence it produces does not sufficiently support operational needs.
  • Only financial institutions and lawyers have submitted STRs in the period between 2017 and 2021, with other FIs and DNFBPs failing to submit STRs.

Recommendations

  • Turkmenistan should continue to improve its AML/CFT/CPF system by strengthening its legal framework, enhancing the capacity of the FMS, and increasing awareness among LEAs of its capabilities.
  • The country should also prioritize the submission of STRs by all relevant financial institutions and DNFBPs.
  • Further training and guidance should be provided to LEAs on the use of financial intelligence and the application of a risk-based approach.