PRESIDENTIAL DECREE OF THE REPUBLIC OF KAZAKHSTAN

of October 6, 2022 No. 1038

About approval of the Concept of development of financial monitoring for 2022-2026

I DECIDE:

1. Approve the enclosed Concept of development of financial monitoring for 2022-2026 (further - the Concept).

2. To the central state bodies, state bodies, directly subordinate and accountable to the President of the Republic of Kazakhstan, and also the interested organizations (in coordination), responsible for implementation of the Concept:

1) to take measures for implementation of the Concept;

2) to provide information on the course of implementation of the Concept according to the procedure and the terms established by the order of the Government of the Republic of Kazakhstan of November 29, 2017 No. 790 "About approval of System of state planning in the Republic of Kazakhstan".

3. To financial monitoring agency of the Republic of Kazakhstan to take the measures following from this Decree.

4. To impose control of execution of this Decree on Administration of the President of the Republic of Kazakhstan.

5. This Decree becomes effective from the date of its signing.

Approved by the Presidential decree of the Republic of Kazakhstan of October 6, 2022 No. 1038

The concept of development of financial monitoring for 2022-2026

Section 1. Passport

Section 2. Analysis of the current situation

2.1. The achieved results

Financing of terrorism and legalization of the criminal income are acknowledged as world society the global problems having transnational character and capable to undermine existence of the political system.

Acts of terrorism can cause the large-scale conflicts of political, territorial and national nature. In turn, laundering of the criminal income does harm to economic interests of the state, exerting negative impact on fair competition and increasing amounts of shadow economy.

Moreover, the mercenary motive acts as causal factor of the vast majority of criminal acts that determines primacy of center of efforts on disclosure of the criminal offenses connected with legalization of the income.

In this regard counteraction of legalization (washing) of the means received in the criminal way and to terrorism financing (further - POD/FT) becomes extremely urgent task and causes need of acceptance of collective and effective measures from all states both on national, and on international levels.

For today in the Republic of Kazakhstan the POD/FT steady system was created.

It includes set of the state, law enforcement and special bodies which realize state policy in the sphere of POD/FT, in interaction and interrelation with subjects of financial monitoring.

Formation of the POD/FT system of the Republic of Kazakhstan can be divided into three stages.

First stage (2000-2008).

The resolution of the Security Council of the United Nations of July 29, 2005 accomplishment of recommendations of Group of development of financial measures of anti-money laundering is offered to all member countries of the United Nations (further - the UN) (further - FATF).

In implementation of these recommendations the separate type of structure of criminal offense - legalization (washing) of money and other property acquired in the illegal way is criminalized.

International conventions are ratified: about fight against financing of terrorism of October 2, 2002, the UN against corruption of May 4, 2008 and the UN against transnational organized crime of June 4, 2008.

In 2004 Kazakhstan for the purpose of ensuring economic safety and non-admission of threats of financial stability became one of founders of regional group of FATF - Eurasian group on counteraction of legalization of the criminal income and financing of terrorism (further - EAG).

Its main activities are ensuring effective interaction and cooperation at the regional level, and also integration at the level of state members of EAG into the POD/FT international system.

Second stage (2008-2020).

In 2008 in realization of provisions of the international acts obliging the countries to found division which will serve as the national center for collection, the analysis and distribution of information in the sphere of POD/FT the division of financial investigation in the form of Committee on financial monitoring as a part of the Ministry of Finance of the Republic of Kazakhstan is created (such bodies are created in 163 countries of the world).

In 2009 the Law "About Counteraction of Legalization (Washing) of Income Gained in the Criminal Way and to Terrorism Financing" (further - the Law on POD/FT) which laid the legal basis of forming of state policy in the sphere of POD/FT is adopted.

It determines bases of interaction and circle of powers of the state and law enforcement agencies, and also subjects of financial monitoring and basic concepts are entered.

Along with it the unique information system of collection and data processing of subjects of financial monitoring meeting international standards of quality and safety is created.

Agreements on interaction and cooperation both between state bodies, and are signed with the countries of the FSU and beyond.

In 2011 Kazakhstan became the full-fledged member of group of divisions of financial investigation of Egmont which increased efficiency of interaction with financial investigations of foreign states.

Active information exchange with more than 100 divisions of financial investigations of the world is begun.

In case of coordination of Committee on financial monitoring of the Ministry of Finance of the Republic of Kazakhstan the POD/FT system successfully passed the first mutual assessment of EAG.

Realization of fundamental regulations of resolutions of the UN Security Council and the FATF standards regarding activities of division of financial investigation, powers and obligations of law enforcement agencies, international cooperation and rendering mutual legal assistance and extradition, and also questions of providing measures of confiscation allowed Kazakhstan to receive ratings "considerably corresponds" and "partially corresponds" on 24 of 40 recommendations of FATF.

Following the results of mutual assessment the "standard monitoring" procedure - the monitoring mechanism used to all state members of EAG which do not have essential shortcomings of technical compliance to recommendations of FATF and the POD/FT system is applied to Kazakhstan.

EAG of the recommendation developed by experts following the results of mutual assessment formed the basis of measures for enhancement of the national POD/FT system.

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