FATF status

Turkmenistan is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 June 2013

The FATF welcomes Turkmenistan’s significant progress in improving its AML/CFT regime and notes that Turkmenistan has largely met its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified. Turkmenistan is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Turkmenistan will work with EAG as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report, and further strengthen its AML/CFT regime.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Turkmenistan was undertaken in 2023. According to that Evaluation, Turkmenistan was deemed Compliant for 7 and Largely Compliant for 20 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective 4 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

In 2023, Turkmenistan was ranked 170 out of 180 countries in Transparency International's Corruption Perceptions Index, highlighting severe corruption issues that hinder foreign investment and business development. Despite the existence of anti-corruption laws and designated agencies, enforcement is weak, and corruption remains widespread across all sectors, with bribery being a common requirement for services and contracts. The lack of independent oversight and the political motivations behind corruption investigations further exacerbate the problem, leaving the public with limited information on the extent of corruption.

Turkmenistan's economy is characterized by high government control, strict foreign currency regulations, and endemic corruption, making it a high-risk environment for foreign direct investment (FDI). Despite having significant natural gas reserves and potential for attracting FDI, the government has not actively pursued foreign partnerships, leading to a lack of substantial foreign investment outside the energy sector. The strict currency controls and bureaucratic hurdles further hinder foreign companies' ability to operate effectively in the country.

Turkmenistan's investment climate is characterized by high risks for foreign direct investment (FDI) due to stringent government control over the economy, strict currency regulations, and pervasive corruption. Although the country has significant natural gas reserves and a modern seaport, the government has not actively sought foreign investment, opting instead to finance projects through state-owned enterprises. Foreign investors face numerous challenges, including an unofficial currency exchange rate that complicates profit repatriation and a lack of transparency in bureaucratic processes.