TURKMENISTAN INTRODUCES NEW ANTI-MONEY

UNCLAS ASHGABAT 000684 SENSITIVE SIPDIS STATE FOR SCA/CEN, EEB E.O. 12958: N/A TAGS: EFIN EINV ECON PGOV TX SUBJECT: TURKMENISTAN INTRODUCES NEW ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING LAW REF: 08 ASHGABAT 779 ¶1. (U) Sensitive but unclassified. Not for Internet publication. ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING ACT ¶2. (U) on May 29, State-run Russian-language newspaper "Neytralniy Turkmenistan" printed the full text of the newly adopted Anti-Money Laundering and Counter-Terrorism Financing Law of Turkmenistan. The Law's main objectives are to prevent and uncover activities associated with money laundering and terrorism financing. To achieve these goals, it provides for the establishment of a new state agency that is authorized to collect and distribute information, as well as to conduct analysis of suspicious transactions and activities. The Law states that Turkmen and foreign citizens who conduct financial transactions and activities in Turkmenistan are subject to the law. In addition, the Law prohibits state agencies from engaging in money laundering or terrorism financing. The Anti- Money Laundering and Counter-Terrorism Financing Law consists of five sections: -- Section One: defines terminology used in the Law in detail; -- Section Two: stipulates financial measures used in the combat against money laundering and terrorist financing; -- Section Three: lists the responsibilities and functions of the state agency authorized to address anti-money laundering; (NOTE: The Law does not specify which of Turkmenistan's ministries or agencies will take charge of these matters. END NOTE) -- Section Four: stipulates cooperation of the designated state agency with international counterparts (NOTE: This section does not list any international organizations. END NOTE); and -- Section Five: states when enforcement of the Law will commence, and attendant responsibilities for its implementation. (NOTE: The Law will take effect three months after the official announcement of its passage, on approximately August 28, 2009. END NOTE) ¶3. (SBU) COMMENT: The Turkmen government has been aware for many months that they needed to make progress in this area. On February 25, 2009, the Financial Action Task Force (FATF) named Turkmenistan -- along with Iran, Pakistan, Uzbekistan, and Sao Tome and Principe -- as needing to address deficiencies in anti-money laundering and combating the financing of terrorism. Local representatives of the World Bank and European Bank for Reconstruction and Development have not been able to review the law fully as of yet. In general, they are pleased that the law was finally adopted, but note the need for full implementation in order for the law to be truly effective (reftel). END COMMENT.