Financial Crime World

Uzbekistan’s Banking Regulations and Compliance: A Review of the FATF Recommendations

Introduction

The Financial Action Task Force (FATF) recently assessed Uzbekistan’s banking regulations and compliance, revealing that the country has made significant progress in implementing international standards. This article reviews the key findings of the assessment and identifies areas where improvement is needed.

Compliance with FATF Recommendations

According to the report, Uzbekistan was found to be largely compliant with several key requirements, including:

  • Assessing Risk and Applying a Risk-Based Approach (R.1): Uzbekistan demonstrated its ability to assess risk and apply a risk-based approach in its financial sector.
  • National Cooperation and Coordination (R.2): The country showed effective coordination between different government agencies and institutions to combat money laundering and terrorist financing.
  • Confiscation and Provisional Measures (R.4): Uzbekistan has implemented measures to confiscate proceeds of crime and apply provisional measures to prevent the dissipation of assets.

Additionally, Uzbekistan demonstrated partial compliance in areas such as:

  • Targeted Financial Sanctions related to Terrorism and Terrorist Financing (R.6): The country has implemented targeted financial sanctions against individuals and entities involved in terrorism and terrorist financing.
  • Non-Profit Organisations (R.8): Uzbekistan has introduced measures to regulate non-profit organizations and prevent their misuse for money laundering or terrorist financing.

Areas Requiring Improvement

Despite the progress made, Uzbekistan was found to be non-compliant in a few areas, including:

  • DNFBPs: Other Measures (R.23): The country needs to introduce additional measures to regulate DNFBPs and prevent their misuse for money laundering or terrorist financing.
  • Transparency and Beneficial Ownership of Legal Arrangements (R.26): Uzbekistan requires improvement in ensuring transparency and beneficial ownership of legal arrangements, including trusts and companies.
  • Regulation and Supervision of Financial Institutions (R.27): The country needs to strengthen its regulation and supervision of financial institutions to prevent money laundering and terrorist financing.

Conclusion

Overall, the assessment indicates that Uzbekistan has made significant progress in implementing the FATF recommendations. However, there are still areas that require attention and improvement to ensure full compliance with international standards. By addressing these areas, Uzbekistan can further strengthen its banking regulations and compliance, ultimately enhancing its ability to combat money laundering and terrorist financing.