Financial Crime World

Turkmenistan Makes Significant Strides in Risk Assessment, Coordination, and Policy Setting

Combating Money Laundering, Terrorist Financing, and Proliferation Financing

Ashgabat, Turkmenistan - In a major step forward in combating money laundering, terrorist financing, and proliferation financing (ML/TF/PF), Turkmenistan has conducted two national risk assessments (NRAs) and developed comprehensive action plans to mitigate identified risks.

Risk Assessment and Action Plans

According to a recent assessment by international experts, Turkmenistan demonstrated a good understanding of its ML/TF risks based on the findings of the second NRA (NRA-2). The country’s competent authorities also showed awareness of the private sector’s involvement in risk management.

The NRAs were carried out in 2018 and between 2020 and 2021, with several working groups formed to assess threats and vulnerabilities. The assessments identified risks related to:

  • National threats
  • Terrorism financing
  • Proliferation financing
  • Vulnerabilities in financial and non-financial sectors

Based on the findings of the NRAs, Turkmenistan developed two action plans aimed at improving its regulatory framework, increasing staff knowledge, and enhancing material and technical capabilities.

Financial Monitoring Service (FMS)

Turkmenistan established a Financial Monitoring Service (FMS) under the Ministry of Finance and Economy to collect, process, and analyze financial intelligence related to ML/TF. The FMS has been collecting and transmitting information on transactions from:

  • Financial institutions
  • Designated non-financial businesses and professions (DNFBPs)
  • Relating to predicate offenses

However, there is a need for improved communication between the FMS and law enforcement agencies (LEAs), as well as increased awareness of the FMS’s capabilities among LEAs.

Suspicious Transaction Reports (STRs)

In terms of reporting suspicious transactions, only financial institutions and lawyers submitted STRs in the period between 2017 and 2021. However, the received STRs were found to be insufficient for operational analysis due to a lack of risk-based approach.

Strategic Documents and Programs

Despite these challenges, Turkmenistan has made significant strides in developing strategic documents and programs related to AML/CT/CNF issues, including:

  • National Strategy on Preventing Violent Extremism and Countering Terrorism
  • Plan of Measures to Combat and Prevent Crimes with a Certain High and Medium ML/TF/PF Threat

International Recognition

The country’s efforts have been recognized by international experts, who noted that Turkmenistan has demonstrated a good level of understanding of national ML/TF risks based on the findings of NRA-2. However, there is still room for improvement in terms of:

  • Coordination between authorities
  • Communication with the private sector
  • Use of financial intelligence to support operational needs

Conclusion

Overall, Turkmenistan’s progress in risk assessment, coordination, and policy setting has been significant, but further efforts are needed to ensure effective implementation of AML/CT/CNF measures.