SOME ISSUES OF COUNTERING THE LEGALIZATION (MONEY-LAUNDERING) OF PROCEEDS FROM CRIME AND THE FINANCING OF TERRORISM

Abstract

This article addresses the issues of combating money laundering and terrorist financing, as well as enhancing the national security system in accordance with international standards (AML/CFT) and the financing of the proliferation of weapons of mass destruction as set by the Financial Action Task Force (FATF).

The events of January 2022 in Kazakhstan demonstrated that the groups responsible for crimes, riots, and mass looting in Almaty and other major cities had a clear plan. It is suspected that the financing of these groups to carry out terrorist actions in the country was sourced both domestically and internationally.

The authors analyzed the Law of the Republic of Kazakhstan «On Combating Legalization (Laundering) of Proceeds from Crime and Financing of Terrorism» (hereinafter – the Law of August 28, 2009) and proposed new solutions, including the adoption of two separate laws: «On Combating Legalization (Laundering) of Proceeds from Crime» and «On Combating Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction».

Additionally, the authors conducted an analysis of certain terms and definitions used in sector-specific legislation and concluded that clarification is needed. For example, defining a beneficiary or beneficial owner can be a complex process. In some jurisdictions, only individuals owning a certain percentage of shares (e.g., more than 25%) are considered beneficial owners. This allows for the evasion of disclosure if ownership is structured in such a way that no single beneficiary reaches the threshold.