On 1 and 2 April 2024, representatives of the Agency for Regulation and Development of the Financial Market of Kazakhstan (the Agency) and commercial banks gathered in Almaty for a two-day intensive practical workshop focusing on tackling money laundering networks and detecting schemes involving "money mules". Recognizing the growing use of these sophisticated methods in contemporary financial crimes and significant challenges they pose to financial institutions and regulatory agencies, the workshop aimed to equip participants with advanced knowledge for detection and prevention activities.
The need to enhance the qualifications of entities combating money laundering, including preventing illicit capital outflows, has become increasingly apparent. According to the annual Basel AML (Anti-Money Laundering) Index ranking, Kazakhstan ranked 100th in 2023, with an estimated impact on its economy amounting to monetary losses from money laundering and capital flight abroad exceeding USD 150 billion. So-called "money mules" are persons who are used by criminal networks to launder money through bank accounts, often without the mule's knowledge. In many cases, the "mule" is unaware of the criminal activity and may be convinced that they are simply performing transactions for legitimate business.
Through hands-on capacity-building activities, the workshop aimed to empower Kazakhstan's financial intelligence community by providing up-to-date knowledge and effective strategies to proactively address emerging threats, including advanced analytical techniques, technological solutions for monitoring financial transactions, and enhanced collaboration between regulatory agencies and financial institutions. Addressing emerging threats is crucial as they constantly evolve, posing significant risks to the financial system's integrity and stability, thus necessitating proactive measures.
The workshop saw the participation of eighteen financial compliance and anti-fraud specialists, comprising six women and twelve men. Sessions were conducted by an expert from K2 Integrity, a U.S. company specializing in financial crime investigations and anti-money laundering/countering financing of terrorism consulting for public and private sectors. The workshop emphasized a combination of theoretical frameworks and practical approaches, particularly focusing on techniques that could be implemented on a short-term operational basis. This included Know Your Customer (KYC) and Customer Due Diligence (CDD) methodologies, as well as the deployment and use of transaction monitoring systems.
"One of the key takeaways from the workshop was the implementation of innovative monitoring techniques to track illicit money movement networks. By integrating advanced algorithms into our systems, we can now identify suspicious transactions more effectively" shared Maksat Shagdarov, Head of the Agency's Department for Combating Abuse in the Financial Market. "Understanding the mindset of money mules was eye-opening. Through case studies and real-life examples shared by the expert, we gained insights into how to disrupt their operations" remarked Arman Omarbekov, Head of Anti-Unfair Practices Division at the Agency's Banking Regulation Department.
This workshop represents a step forward in enhancing the resilience of the host country against money laundering activities, thereby contributing to a secure investment climate and sustainable economic growth. The OSCE Programme Office in Astana remains committed to continuing its efforts to improve the host country's ability to combat money laundering and terrorist financing offenses. Through ongoing collaboration and knowledge-sharing, stakeholders can work together to strengthen the financial integrity and security of the region.
