Kyrgyzstan Country Summary

FATF Status

Kyrgyzstan is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 27 June 2014

The FATF welcomes Kyrgyzstan’s significant progress in improving its AML/CFT regime and notes that Kyrgyzstan has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in October 2011. Kyrgyzstan is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Kyrgyzstan will work with EAG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

Compliance with FATF Recommendations

The latest Follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Kyrgyzstan was undertaken in 2023. According to that Evaluation, Kyrgyzstan was deemed Compliant for 4 and Largely Compliant for 36 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Corruption is a pervasive issue in Kyrgyzstan, affecting all levels of society and the economy, despite the existence of laws against bribery and recent efforts to strengthen anti-corruption policies. The government's enforcement of these laws is inconsistent and often politically motivated, leading to a culture where bribery is seen as a necessary means to obtain government services. While Kyrgyzstan has made some progress in adopting anti-corruption measures, significant challenges remain, including the need for judicial reform, improved law enforcement cooperation, and greater transparency in political financing.

The Kyrgyz economy faced a significant contraction of 8.6 percent of GDP in 2020, primarily due to declines in construction, tourism, and non-gold exports, with foreign direct investment plummeting by over 50 percent. The government, under President Sadyr Japarov, is attempting to stabilize the economy and attract foreign investment while grappling with a high public debt of 68 percent of GDP and ongoing concerns about corruption and investor security. Despite these challenges, the International Monetary Fund projects a rebound in growth for 2021, with hopes for a full recovery to pre-pandemic levels by 2023.

The investment climate in Kyrgyzstan is currently challenging due to political instability, a significant contraction in the economy, and increased government scrutiny of private businesses under an anti-corruption campaign. Foreign direct investment (FDI) has plummeted by over 50% in 2020, exacerbated by aggressive government actions against major investors, such as the $3 billion fine levied against Centerra Gold Inc. While the government seeks to attract foreign investment and has established frameworks to support it, concerns over the security of investments and inconsistent regulatory practices continue to deter potential investors.