Start date: 2009
Budget: USD 125 000
Project Location: Tashkent
Implementing Agency: General Public Prosecutor’s Office of the Republic of Uzbekistan
Donor: Swiss State Secretariat for Economic Affairs
Domain of assistance: Public Institutions and Services
In 2006 Uzbekistan passed a law introducing Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) obligations, notably in the areas of customer identification and reporting of transactions. The AML/CFT responsibilities of the Financial Intelligence Unit (FIU) were vested in the department of the General Prosecutor’s Office which is in charge of fighting tax- and currency-related crimes and money laundering.
On January 12, 2007, Uzbekistan suspended the obligations of financial and other institutions to report transactions to the national FIU for six years, claiming that the impact of the AML/CFT obligations had a negative impact on the local banking industry. Interruption of the AML/CFT regime a serious breach of international standards and harms the international financial system. Accordingly, the Financial Action Task Force (FATF) called for urgent action to address this vulnerability and to meet international standards.
In the autumn 2008, the International Monetary Fund (IMF) received a request from the Uzbek authorities for technical assistance (TA) in the field of AML/CFT. Consequently, the IMF designed a proposal for a small project comprising basic consultancy delivery and asked Government of Switzerland to finance the program.
The IMF proposed to address the Uzbek TA request by launching a small TA program aiming primary at assessing the needs for improving the AML/CFT framework, building capacity, and developing a work plan. SECO agreed to consider supporting such an approach.
The project falls under the framework agreement between SECO and the IMF Office of Technical Management (OTM).
The project objective is to support the strengthening of the legislature and regulatory framework and to enhance the capacities of the Uzbek authorities with the main responsibilities for AML/CFT.
The project cooperates closely with the FATF and The Eurasian Group on combating money laundering and financing of terrorism (EAG), as well as with other donors operating in the region (the World Bank and the United Nation Office for Drugs and Crimes). It will also build on the major findings of the FATF-EAG mission.
During its implementation the project will execute the following tasks:
- Conduct a TA needs assessment mission, to understand the current AML/CFT framework, identify TA needs and priority actions;
- Describes existing structure of AML/CFT;
- Defines the scope of issues, where Technical Assistance is required.
Based on the outcome of the needs assessment throughout its implementation the project will assist the authorities in developing a legislative and regulatory framework that is consistent with international standards; in particular providing drafting support for an AM/CFT law setting up FATF-complaint preventive measures and reporting requirements which minimize potential negative impacts on the banking system and supporting the criminal law framework and the implementation of the United Nation Security Council Resolutions 1267 and 1373 on freezing terrorist related assets.
Help the authorities with outreach to financial institutions and authorities with the main AML/CFT responsibilities, to raise ML/FT awareness (financial sector) and to enhance the capacity to counter ML/FT (authorities).
The project is expected to achieve the following results:
- Conduct an assessment of AML/CFT legal and institutional framework in order to identify priority actions and TA needs;
- Bring AML/CFT-related criminal provisions in line with the international standards (FATF recommendations and relevant UN conventions);
- Analyze partially the suspended AML/CFT law to ensure consistency with international standards;
- Enhance cooperation between authorities that have AML/CFT responsibilities and financial sector.