Kyrgyzstan is a small Central Asian country that is vulnerable to money laundering (ML) and drug traffic-related financial flows coming from Afghanistan. As a result, a number of large international banks have cut their correspondent accounts with Kyrgyz banks. This phenomenon, known as “de-risking”, has severed Kyrgyzstan’s linkages to the global financial system, and has damaged the ability of the Kyrgyz economy to make trade-related and other payments, and to receive remittances.

At the invitation of the High Technology Park of the Kyrgyz Economy and the U.S. Embassy in Bishkek, on July 27, FSVC Managing Director Chad Kilbourne gave a webinar to public and private Kyrgyz financial institutions on how to implement effective anti-money laundering (AML) regimes that meet international standards. Topics covered included how to adopt a risk-based approach to supervision and compliance, and how low-cost IT solutions can facilitate the work of compliance officers, supervisors and investigators to strengthen the AML chain.

Participants included the Central Bank of Kyrgyzstan, the Financial Intelligence Unit and the Kyrgyz Banking Association, and all three expressed great interest in the webinar, as they reported the severe impact of de-risking on their economy. COVID-19 has dramatically interrupted remittance flows and damaged many emerging economies, exposing more than ever the need for those countries to develop strong financial institutions and practices that meet international standards.