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, with widespread government corruption acting as a major barrier to investment and business development across various sectors. The lack of independent institutions to combat corruption, ineffective enforcement of anti-corruption laws, and a judiciary that is controlled by the government contribute to a climate where criminal activities, including human trafficking and drug trafficking, thrive, while civil society remains virtually non-existent and unable to address these issues effectively.

Turkmenistan's economy presents a challenging environment for foreign direct investment (FDI), primarily due to extensive government control, strict currency regulations, and pervasive corruption, which create significant barriers for potential investors. While the country boasts substantial natural gas reserves and a modern seaport, the government's preference for financing projects through state-owned enterprises has stifled private sector growth and limited foreign participation outside the energy sector. Furthermore, strict foreign currency controls and an opaque regulatory framework hinder the repatriation of profits and complicate business operations, leaving Turkmenistan largely isolated from international investment opportunities despite its potential.