Financial Crime World

Uzbekistan Faces Scrutiny Over Anti-Money Laundering (AML) Software Implementation

A recent assessment of Uzbekistan’s anti-money laundering (AML) framework has highlighted several areas of concern, sparking fears that the country may be vulnerable to financial crime.

FATF Assessment Reveals Deficiencies

The Mutual Evaluation Report published by the Financial Action Task Force (FATF) assigns ratings to countries based on their implementation of technical requirements and standards. The report reveals that Uzbekistan is largely compliant with recommendations regarding:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)

However, significant deficiencies were identified in areas such as:

Key Areas of Concern

  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Targeted financial sanctions related to proliferation (R.7) and non-profit organisations (R.8)

Uzbekistan’s implementation of AML/CFT measures has been deemed partially compliant in regards to:

Challenges Identified

  • Ensuring financial institution secrecy laws are in place (R.9)
  • Conducting customer due diligence (R.10)
  • Meeting record-keeping requirements (R.11)
  • Addressing Politically Exposed Persons (PEPs) (R.12)
  • Correspondent banking (R.13)
  • Money or value transfer services (R.14)
  • New technologies (R.15)
  • Wire transfers (R.16)
  • Reliance on third parties (R.17)
  • Internal controls and foreign branches and subsidiaries (R.18)
  • Higher-risk countries (R.19)

Reporting Suspicious Transactions

Uzbekistan has been deemed compliant with regards to:

  • DNFBPs (R.22)

However, the country faces challenges in ensuring:

  • Transparency and beneficial ownership of legal persons (R.24) and legal arrangements (R.25)
  • Regulation and supervision of financial institutions (R.26)
  • Powers of supervisors (R.27)
  • DNFBPs (R.28)

Conclusion

The report concludes that Uzbekistan has made progress in implementing AML/CFT measures, but significant work remains to be done to address the identified deficiencies. The government must prioritize the strengthening of its anti-money laundering framework to prevent financial crimes and maintain international cooperation.