Turkmenistan Country Summary

FATF Status

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

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Turkmenistan was undertaken in 2023. According to that Evaluation, Turkmenistan was deemed Compliant for 7 and Largely Compliant for 20 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective 4 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Turkmenistan faces significant challenges related to crime and corruption, characterized by widespread government corruption that hinders investment and business development across all sectors. The lack of independent institutions to combat corruption, ineffective enforcement of anti-corruption laws, and the pervasive involvement of state actors in criminal activities contribute to a climate of impunity and limited resilience against crime.

Turkmenistan's economy presents a challenging environment for foreign direct investment (FDI), largely due to the government's extensive control over economic activities, strict currency regulations, and pervasive corruption. Despite possessing significant natural gas reserves and generating substantial revenue from exports, particularly to China, the government has not effectively implemented policies to attract or incentivize foreign investment, resulting in minimal engagement from international investors outside the energy sector. The opaque regulatory framework, burdensome bureaucratic processes, and lack of transparency further deter potential investors, while the dominance of state-owned enterprises in various sectors limits opportunities for private sector growth and innovation.