Uzbekistan Takes Comprehensive Approach to Combating Money Laundering and Terrorist Financing

Introduction

Tashkent, Uzbekistan - The Republic of Uzbekistan has made significant progress in combating money laundering (ML) and terrorist financing (TF), according to a recent report.

Financial Intelligence Unit’s Key Role

The country’s Financial Intelligence Unit (FIU) plays a key role in coordinating ML/TF risk assessment measures, working closely with the Interagency AML/CFT/CPF Commission (IAC) and other authorities. The IAC, comprising 23 members from various ministries and agencies, is responsible for interagency cooperation on anti-money laundering, combating terrorist financing, and proliferation financing issues.

National Risk Assessment

In 2019, Uzbekistan conducted a National Risk Assessment (NRA), which identified ML/TF risks and vulnerabilities. The report was published on the FIU website and disseminated to financial institutions and designated non-financial businesses and professions (DNFBPs). The NRA findings were also used to develop response measures to mitigate identified risks.

Identified Risks and Vulnerabilities

The country’s competent authorities have demonstrated a good understanding of national ML/TF risks and have developed approaches to risk assessment methodology. However, the private sector’s understanding of risks varies depending on size and development. Some identified risks include:

• Insufficient assessment of non-profit organization-related risks
• Vulnerabilities in definition of national politically exposed persons (PEPs)
• Lack of mitigation measures for certain vulnerabilities

Response Measures

To address identified risks, the government has developed a list of response measures, prioritizing adoption of the National AML/CFT/CPF Strategy and combating corruption, disruption of illegal payment systems, strengthening of fight against tax and customs crimes, and improving transparency of financial institutions (FIs) and DNFBPs.

Improvements in Law Enforcement

Many law enforcement agencies (LEAs) restructured their units and optimized staffing levels to improve priority areas in line with identified risks. The country’s FIU has also played a crucial role in collecting and analyzing suspicious transaction reports (STRs) and other information from FIs and DNFBPs.

Legislative Framework

Uzbekistan has a sufficient legislative and institutional framework for identifying and investigating ML cases, with measures in place to ensure confidentiality and security of collected criminal intelligence and other information.

Results and Outlook

While most identified ML cases were related to self-laundering, only a few instances of third-party ML and professional ML have been detected. The share of identified ML offenses is relatively small compared to the total number of committed predicate offenses. Overall, Uzbekistan’s efforts demonstrate a commitment to combating money laundering and terrorist financing, and its comprehensive approach has yielded positive results.

Conclusion

Uzbekistan’s comprehensive approach to combating money laundering and terrorist financing has led to significant progress in identifying and mitigating risks. The country’s authorities have demonstrated a good understanding of national ML/TF risks and have developed effective response measures to address them. While there are still some shortcomings to be addressed, Uzbekistan’s efforts demonstrate a commitment to combating these serious threats to global financial stability.