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, indicating severe corruption that hampers foreign investment and business development. Despite the existence of anti-corruption laws, enforcement is weak, and there is no independent agency or NGOs to monitor corruption, leading to a culture where bribery is commonplace across various sectors. The government's tight control and lack of transparency further exacerbate the issue, making it difficult to obtain reliable information about corruption.

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 possessing the fourth largest natural gas reserves globally, the government has not actively sought to attract FDI, resulting in minimal foreign investment outside the petroleum sector. The lack of transparency and bureaucratic hurdles further complicate the investment landscape, deterring potential international partners.

Turkmenistan's investment climate is characterized by high risk for foreign direct investment (FDI) due to extensive government control over the economy, strict foreign currency regulations, and pervasive corruption. Although the country has significant natural gas reserves and a modern seaport, the government has not actively sought to attract foreign investment, resulting in minimal FDI outside the energy sector. The lack of transparency, bureaucratic hurdles, and restrictions on currency exchange further deter potential investors.