Mutual Evaluation report Of Kyrgyz Republic

The Eurasian group on combating money laundering and financing of terrorism (EAG) has conducted an assessment of the Kyrgyz Republic’s anti-money laundering and counter-terrorist financing (AML/CFT) system. The mutual evaluation report is a comprehensive review of the effectiveness of Kyrgyz Republic’s AML/CFT system and its level of technical compliance with the FATF standards and provides recommendations for further development of national AML/CFT system.

The EAG Plenary approved the Executive Summary and the Mutual Evaluation Report of the Kyrgyz Republic as part of the 2^nd round of EAG mutual evaluations in May 2018. The Kyrgyz Republic became the first EAG member-state that completed the mutual evaluation according to the revised 2012 FATF Recommendations. The report of the Kyrgyz Republic has successfully passed the FATF quality and consistency procedures.

The EAG recognized the progress of the Kyrgyz Republic in improving its AML/CFT system since the previous evaluation dated 2007. The assessment team praised the Kyrgyz Republic’s efforts to conduct a national risk assessment however recommended to proceed with more detailed and comprehensive analysis of the money laundering and terrorist financing (ML/TF) risks, develop a national strategy based on identified risks and to provide the risk assessment results to all relevant stakeholders. 

Financial institutions have a good understanding of their AML/CFT obligations established under the Kyrgyz Republic legislation. Banks demonstrated a good understanding of ML/TF risks however other representatives of financial institutions and designated non-financial businesses and professions have a limited understanding of ML/TF risks.

Competent authorities responsible for financial institutions and designated non-financial businesses and professions supervision demonstrated effective supervision and sanction regimes. At the time of the on-site mission, the National Bank of the Kyrgyz Republic and Precious Metals Department under the Kyrgyz Republic Ministry of Finance were in the process of introducing risk-based supervisory regimes based on ML/TF risks identified. It should be noted that the incomplete coverage of the reporting entities by the AML/CFT supervisory regime, as well as the lack of supervisory authorities over certain categories of designated non-financial businesses and professions, have a negative impact on the national AML/CFT system.

The Kyrgyz Republic's legal framework allows it to properly apply targeted financial sanctions against individuals and organizations designated by the UN Security Council, as well as to compile a national list of designated individuals. Alongside the implementation of the UNSC sanctions regime, the Kyrgyz Republic applies additional proliferation financing preventive measures. Recommended actions reflected in the report state that the country should improve interaction with non-profit organizations including development of supervisory risk-based approach for non-profit organizations.

The Kyrgyz Republic has legal framework for investigation and prosecution of money laundering and terrorist financing, where necessary the country utilizes financial intelligence and the opportunities available for international exchange of information. Further development of AML/CFT system should be conducted by enhancing the mechanisms of confiscation of proceeds of crime and intensifying parallel financial investigations.

There are many signs and characteristics of an effective international cooperation mechanisms in place in the Kyrgyz Republic, still the competent authorities should make an intensive use of various international cooperation and mutual legal assistance mechanisms as well as set up a system of request prioritization.

Following the Procedures of the 2^nd round of EAG mutual evaluations the Kyrgyz Republic will present its follow-up report during the 30^th Plenary meeting in May-June 2019.