Turkmenistan Country Summary

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 government corruption that hinders foreign investment and business development. Despite the existence of anti-corruption laws, enforcement is lacking, and there are no independent organizations to monitor corruption, leading to a pervasive culture of bribery among officials. Additionally, Turkmenistan faces significant issues with human trafficking, counterfeit goods, and financial crimes, all exacerbated by weak governance and a lack of civil society.

Turkmenistan's economy is characterized by near-total government control, strict foreign currency regulations, and endemic corruption, making it a high-risk environment for foreign direct investment (FDI). Despite having the fourth largest natural gas reserves globally, the lack of significant FDI, aside from a few petroleum-related agreements, stems from the government's preference for financing projects through state-owned enterprises and its restrictive economic policies. The government's strict currency controls and opaque bureaucratic processes further hinder foreign investment and economic transparency.

Turkmenistan's investment climate is characterized by high risks for foreign direct investment (FDI) due to extensive government control over the economy, strict currency regulations, and pervasive corruption. Despite having significant natural gas reserves and a modern seaport, the government has not actively sought foreign investment, leading to minimal FDI outside the energy sector. Challenges such as an unofficial currency exchange rate, bureaucratic hurdles, and limited internet access further deter potential investors.