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Magazine "Қаржы/Финансы" № 8, 2014 Interview of the Chairman of The Committee on Financial Monitoring of the Ministry of Finance of the Republic of Kazakhstan

Chairman of  The Committee on Financial Monitoring of the Ministry of Finance of the Republic of Kazakhstan
Bissengali Tajiyakov

1. Bisengali Shamgalievich in June passed the regular EAG Plenary meeting, and with what news returned delegation of Kazakhstan?

- News is only good. During past 2014 year in the period from 16 to 20 June in Moscow at the regular 20th Plenary and working groups of the EAG was attended by representatives of the Committee on Financial Monitoring, the National Bank, General Prosecutor's Office, the Agency for Combating Economic Crimes and Corruption and the National Security Committee of the Republic of Kazakhstan.

The key issue for the EAG Plenary meeting for Kazakhstan was the discussion on the progress of Kazakhstan to overcome the existing drawbacks identified by EAG mutual evaluation in 2011.

In order to implement the results of observations on the EAG mutual evaluation was developed and adopted the Law of the Republic of Kazakhstan "On amendments and additions to some legislative acts of the Republic of Kazakhstan concerning counteraction to legalization (laundering) of proceeds from crime and terrorist financing", signed by the Head of the country 10 June of this year, which amended 34 legislative acts of the Republic of Kazakhstan on AML / CFT. A significant part of drawbacks corrected by adoption of the Act, however some work still have to be done.

Kazakhstan confirmed the standard regime of monitoring that is undoubtedly a success, wherein Kazakhstans major tasks are to implement the AML/ CFT all 49 FATF Recommendations. Plenary noted that under the procedures of removal from the the standard regime of monitoring Kazakhstan should submit third detailed report on progress on all recommendations-rated PM and NM at the 23rd Plenary meeting in November 2015, and interim information in November 2014 year.

I would like to specially note and thank all the members of our delegation for their active participation, in that the Plenary thanked the Republic of Kazakhstan for their work and noted the progress made ​​by Kazakhstan existing drawbacks.

At the present time, 25 normative legal acts are preparing, aimed at the implementation to the adopted Law on AML/CFT. Work has started to develop the concept of the new law.

All of the above mentioned activities must be completed and approved till October 2014.

2. Kazakhstan presented a report on accordance with the FATF standards 2003. As we know, the standards have been updated. In this connection what Kazakhstan have to do?

You are right, the standards were updated in February 2012. The new edition of the FATF standards, which not only greatly expand the range of regulated issues and purview of the institute, but also introduce new parameters and standards of international AML/CFT system.

Thus, in the near future will further work on theoretical understanding and methodological treatment of the FATF standards in accordance with national legislation and regulatory features of the various spheres of activity. 
From the next year, the FATF plans to begin an assessment of their countries on the new standards.

3. In your opinion, what is the role of the Committee on Financial Monitoring as a national unit in the international AML/CFT?

Committee on Financial Monitoring of Kazakhstan - an integral part of the international system of combating money laundering and terrorist financing. Cooperation with foreign colleagues, and active participation in the activities of intergovernmental organizations - the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG), a group of financial intelligence units Egmont and the Council of heads of financial intelligence units of the CIS countries.

In spite of the fact that the system of financial monitoring of Kazakhstan is relatively young, I can confidently say, that other countries are listen for our opinion, and the Committee shares his experience on some issues with colleagues, and at the same time studying their experience, on what basis are improving own work.

4. Previously information about possible membership of Kazakhstan at the FATF, why it is important for us to participate in this group?

FATF is a universal International Centre for Settlement of issues in the field of AML/CFT and recognized developer of the comprehensive international standards in this sphere.

In particular, the UN Security Council resolution 1617 (2005), which is obligatory for all UN member states are urged to fulfill the requirements of the FATF standards.

At present, the FATF includes 34 countries and two regional organizations: the European Commission and the Council of the Persian Gulf Cooperation. 180 countries are Observers. Operates eight regional FATF-style groups. One of them is the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG), where the Republic of Kazakhstan is the member.

In August 2013 the Government of the Republic of Kazakhstan addressed the FATF with the intention of getting membership in this organization.

Participation in the work of the FATF is important to us for several reasons.

The most important of them is the fact that in recent years the FATF became the organization that listen for the international community. You've probably heard about the gray and black lists of the FATF, which consist of countries with serious drawbacks in AML/CFT. Inclusion in the FATF blacklist - is not only a impact to the credibility of the country. If the country during the long period of time is in the black list, the other countries are invited to take in respect of its financial countermeasures. This means that all banking operations of this country will be closely monitored.

In consequence:

  1. Limitation the rights of citizens making any payments abroad;
    1. Suspension of operations of accounts in foreign banks;
  2. Classification of opened accounts to the category with an high risk;
    1. The inhibition of foreign economic activity;
  3. Complication correspondent relations between national banks and financial institutions of countries - members of the FATF and regional FATF-style groups;
  4. Significant reduction of investment attractiveness of the economy to foreign investors;
  5. Decline in foreign trade operations, which in turn affects the execution of government programs.

5. How is the interaction of the Committee with the subjects of financial monitoring and law enforcement authorities?

Today, the Committee on Financial Monitoring has a considerable amount of information on transactions with funds or other assets subject to financial monitoring.

Unified Information analytical system database is forms from reports of suspicious financial transactions coming from the subjects of financial monitoring under the current legislation in the field of AML/CFT

Every day this database is updated with thousands of messages. Only the first half of 2014 has received more than 900,000 messages. Accumulated information resource provides an opportunity for a detailed analysis and there are reasons that a financial transaction related to legalization of money laundering and terrorist financing, the Committee directs the information and materials to law enforcement authorities for further organization of inspections.

Committee on Financial Monitoring – is the administrative body that coordinates anti-money laundering and terrorism financing. This issue is solved in close cooperation with law enforcement, government and special authorities of Kazakhstan.

To improve the organizing of informational cooperation in the field of combating money laundering and terrorist financing signed a joint order for the exchange of information and transfer of materials related to the legalization (laundering) of proceeds from crime and financing of terrorism (extremism) with the General Prosecutor's Office, the National Security Committee, Ministry of Internal Affairs and the Agency of the Republic of Kazakhstan on Fighting economic Crimes and Corruption of the Republic of Kazakhstan.

Signed Agreements on cooperation in the field of AML/CFT between the Committee on Financial Monitoring and Tax Committee, the Association of Financiers of Kazakhstan, Kazakhstan Chamber of Notaries, the College of Auditors of the Republic of Kazakhstan, the Chamber of Auditors of the Republic of Kazakhstan, Association of bookmakers and totalizator of the Republic of Kazakhstan.

6. According to our information, you are elected to the post of Deputy Chairman of the EAG. What does imply this nomination, and what obligations placed upon our country?

Election to the post of deputy chairman of the EAG simultaneously honorable and difficult task for our country and for me personally.

As you remember, the EAG was founded in October 2004 by six countries. And Kazakhstan was in the very beginning of creation of this organization. Today is full-fledged international organization consisting of 9 Member countries, the 14 states and 18 organizations - observers, open to extension.

Financial monitoring system in Kazakhstan is one of the youngest at the site of the EAG. Despite this, and we aim to make every possible effort to achieve a level of more developed systems.

In accordance with the Intergovernmental Agreement on the EAG Kazakhstan elected deputy chairman of the EAG for the period from November 2013 to November 2015. Then it is assumed that Kazakhstan take over the chairmanship of the EAG for the next two years: from November 2015 to November 2017.

Kazakhstan will continue of course started a course to strengthen the position of the EAG countries-members in the global network of AML/CFT. Which in turn imposes even more commitments to improving our national AML/CFT system and achieve more developed systems level.

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