Kazakhstan and Russia share best practices in implementing international anti-money laundering standards

Kazakhstan and Russia Consultations Forum on Financial Security of Private Sector and AML/CFT Best Practices was held in Almaty (Kazakhstan) on the behest of the Eurasian group on combating money laundering and financing of terrorism (EAG) in cooperation with the Kazakhstani Ministry of Finance. Over 40 banks and other financial institutions and experts of supervisory bodies took part in the Forum.

The Forum opened the EAG Plenary week which is taking place in Kazakhstan since May 31 till June 3, with participation of more than twenty countries and international organizations involved in AML/CFT.

According to the address of the EAG Chairman Mr. Oleg Markov to the participants of the consultations, developing efficient AML/CFT systems is ever more relevant in the context of creation of the Single economic space between the two countries. Mr. Markov stated that legislative and institutional AML/CFT framework has been formed in Kazakhstan which should be now actively developed and brought into compliance with international standards.

Chairman of Financial Monitoring Committee of the Ministry of Finance of Kazakhstan Mr. Musyraly Utebayev declared that hosting the EAG Plenary in Kazakhstan is a unique opportunity for the country especially taking into consideration the upcoming mutual evaluation by the EAG experts of Kazakhstan’s AML/CFT system’s compliance with international standards.

The EAG Executive Secretary Mr. Igor Nebyvaev commented on the FATF and EAG approaches to risk assessment for private sector institutions. According to Mr. Nebyvaev, partnership of the private sector with regulators can significantly contribute to enhancing the efficiency of national AML/CFT systems. Taking into consideration the fact that the anti-money laundering regime is being actively developed in Kazakhstan, Mr. Nebyvaev recommended that the country’s private sector should implement international practices including those of the FATF and the FATF-style regional bodies.

The co-chair of the EAG Working group on mutual evaluations and legal issues and head of Rosfinmonitoring legal department Mr. Pavel Livadny underlined that a very relevant AML/CFT law has been implemented in Kazakhstan which was elaborated in collaboration with the EAG, World Bank and IMF experts.

“The recently implemented AML/CFT law of Kazakhstan will not interfere with the activities of legal business. It is aimed at detecting criminal schemes of money laundering and penetration of illegal proceeds into the national economy. At the moment Kazakhstan is preparing for the EAG mutual evaluation which is to start this year” – said Mr. Utebaev at the Forum.

The results of an INTERFAX expert survey on money laundering impact on the effectiveness of the economy in the view of Kazakhstan’s business community were presented at the Forum. According to the survey, Kazakhstani private sector institutions are highly interested in cooperating with the government agencies for AML/CFT purposes. They realize the importance of implementation of the AML/CFT legislation in the country as it is aimed at integration of Kazakhstan into the international financial system. The importance of cooperation with the international organizations and the upcoming EAG mutual evaluation was also underlined.

As a result of the Consultations Forum, the following recommendations for the EAG member-state private sector and supervisory bodies were proposed:

1. To the financial institutions and other reporting entities: in the context of creation of the Single economic space with participation of Kazakhstan and Russia it is recommended to monitor closely transborder payments and conduct due diligence regarding those customers involved in the international trade operations. 

2. To the financial institutions and other reporting entities: in order to ensure transparency of monetary transactions and those with securities and other propriety it is recommended to monitor closely transactions with offshore jurisdictions and the jurisdictions under the FATF monitoring. 

3. To the supervisory bodies: in the context of spread of new technologies and payment methods including those which do not demand customer’s presence – it is recommended to pay attention to e-money payments and other alternative non-banking payments (including payments through terminals). In this regard it is recommended to consider enhancing state regulation of e-payments in compliance with international standards. 

4. To the supervisory bodies: in the context of spread of non-banking financial services in terms of short-term loans and crediting it is recommended to enhance government regulation and supervision in these areas.