Methodological Recommendations on Working with Public Officials

Return to previous page

Print version

Date of creation: 2026-06-09

Approved by resolution of the Committee for Supervision of the National Bank of the Kyrgyz Republic of May 22, 2026 No. 22/1

METHODOLOGICAL RECOMMENDATIONS

on working with public officials

1. General Provisions

2. These Methodological Recommendations on working with public officials (hereinafter – the Recommendations) are developed to enhance the efficiency of financial organizations supervised by the National Bank of the Kyrgyz Republic (commercial banks, credit unions, microfinance organizations, specialized financial-credit organizations, exchange offices, payment organizations, operators of payment systems using electronic money, hereinafter – FOs) in their interactions with public officials (hereinafter – POs), to assist FOs in identifying POs, as well as persons associated with them, taking into account the heightened level of risks inherent in this category of clients, and to ensure the analysis and monitoring of their financial operations in accordance with the legislation of the Kyrgyz Republic in the field of combating the financing of criminal activities and legalization (money laundering) of criminal proceeds (hereinafter – AML/CFT), regulatory legal acts of the National Bank of the Kyrgyz Republic (hereinafter – the National Bank), as well as the recommendations of the Financial Action Task Force (hereinafter – FATF) regarding POs.

The objective of these Methodological Recommendations is to define minimum requirements for the formation of an adequate risk management system in FOs and requirements for organizing internal control, providing for the application by FOs of risk control methods that ensure effective identification, assessment, and mitigation of FO risks taking into account the type and volume of operations conducted by them.

These Methodological Recommendations are used in the development and updating of internal policies and procedures of FOs, employee training, as well as in preparing FOs for inspections and audits. The Recommendations are intended for practical application by FOs in daily activities when establishing and maintaining business relationships with POs and persons associated with them.

2. For the purposes of these Methodological Recommendations, terms and definitions provided for in the Law of the Kyrgyz Republic "On Combating the Financing of Criminal Activities and Legalization (Money Laundering) of Criminal Proceeds" (hereinafter – the Law) and the Regulation "On the Procedure for Conducting Customer Due Diligence," approved by Appendix 12 to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of November 14, 2025 No. 739, are used.

3. Public Officials (POs) – any of the following natural persons:

1. Foreign PO – a person performing or having performed significant state or political functions (public functions) in a foreign state (heads of state or government, senior officials in government and other state bodies, courts, armed forces, state-owned enterprises, as well as prominent political figures, including prominent figures of political parties);

2. National PO – a person holding or having held a political and special state position or a political municipal position in the Kyrgyz Republic, provided for in the Registry of State and Municipal Positions of the Kyrgyz Republic, approved by Decree of the President of the Kyrgyz Republic of January 31, 2017 UP No. 17, as well as senior management of state companies (joint-stock companies, limited liability companies, etc., with state share), prominent political figures, including prominent figures of political parties;

3. PO of an international organization – a person who is or was a senior official of an international organization (heads, deputy heads, and board members of an international organization or persons holding equivalent positions in an international organization);

4. Close persons of POs include close relatives, business partners, and official representatives of POs.

5. Close relatives of POs include parents, adoptive parents, adopted children, full and half brothers and sisters, grandfathers, grandmothers, grandchildren, for whom the PO bears financial costs for covering living expenses, education, healthcare, and other necessary expenses.

6. Family members of POs include spouses (husband/wife) and children, including adopted/foster children.

7. International Standards and Best Practices Regarding POs

8. FATF establishes international standards regarding relationships with POs.

According to FATF recommendations, a PO is a person entrusted with significant/notable/important functions. FATF recognizes that due to their status and influence, many high-ranking officials hold positions that provide opportunities for the legalization (money laundering) of proceeds from crime and the commission of crimes, particularly those related to corruption. These include corruption and bribery, as well as activities related to terrorist financing.

Therefore, FATF recommendations require the application of enhanced customer due diligence in business relationships with public figures due to potential AML/CFT risks. It should be emphasized that these measures are preventive in nature. FATF emphasizes that this should not mean that all public figures are involved in criminal activity or that they are corrupt by default.

Due to the risks associated with public figures, it is recommended to effectively implement, among others, FATF Recommendations 10, 12, and 22.

FATF Recommendation 12 concerns POs and establishes measures to combat money laundering/terrorist financing that apply to primary financial monitoring organizations entering into business relationships with POs.

FATF Recommendations 10 and 22 are general requirements for due diligence for clients of primary financial monitoring organizations.

8. In the definition of POs, FATF divides them into international, national, and POs of international organizations.

Foreign POs – persons entrusted with an important state position in a foreign state, such as heads of state or government, prominent politicians, officials of judicial or military institutions, heads of state corporations, prominent figures of political parties.

National POs – persons entrusted with an important state position in their own country, such as heads of state or government, prominent (well-known) politicians, officials of judicial or military institutions, heads of state corporations, prominent figures of political parties. As a rule, the following positions should be included in the definitions of "national POs" applicable in different countries as a reference for primary financial monitoring organizations:

• Head of state – President;
• Head of government – Prime Minister;
• Senior members of the legislative branch – Speaker, Deputy Speakers of Parliament;
• State officials – Members of Parliament, Ministers, Mayors or Governors, Opposition leaders, Parliamentary Secretaries;
• Senior state officials – Permanent Secretaries, Chief Technical Officers, Ambassador or High Commissioner, Police Commissioner or higher rank;
• Officials of judicial bodies – Magistrates or judges of first and second instance courts, judges of higher courts, Prosecutor General and senior officials of the Prosecutor's Office;
• Senior military officials – Colonels or higher;
• Heads of state companies (joint-stock and limited liability companies with state share), members of councils of all state bodies and state-owned enterprises, including those bodies in which the state holds a controlling share;
• Senior officials of political parties, such as Chairman/Leader/Deputy of a political party.

The list indicated is not exhaustive and may vary significantly depending on the jurisdiction.

9. Close relatives of POs include persons related to the PO by birth, marriage, or other types of family relations.

Definitions of "closest family members" typically include:

• Spouses (including former);
• Parents;
• Brothers and sisters (full and half);
• Children (including adopted/foster);
• Brothers and sisters of parents, children of the PO's spouses.

Close persons of POs – persons connected to the PO by personal (social) or business (professional) ties.

International standards include in this definition:

• Partners outside the family;
• Prominent members of the same political party, public organization, trade unions;
• Business partners or colleagues, especially those who share beneficial rights with the PO in legal entities;
• Persons who are relatives;
• Persons who, due to personal relations (social, economic, and cultural conditions), may play a certain role in relations with the PO.

Close relatives and persons close to POs are treated as POs, as there is a potential danger of abusing such relationships to transfer proceeds from crime or to ensure the placement and concealment of proceeds, as well as their use for criminal purposes.

3. Measures Applied to POs

4. FOs must ensure the presence of an appropriate risk management system that allows for the identification of clients who are POs.

5. The FO's risk management system must ensure consistency of actions among front-office units, compliance functions, and risk management, define the distribution of responsibility, and provide practical tools (algorithms, criteria, and control measures) necessary for the uniform application of internal control requirements and proper compliance with AML/CFT legislation norms.

6. FOs must carry out the following customer due diligence measures (hereinafter – CDD) regarding POs:

1. use the risk management system to determine whether the client or beneficial owner is a PO;

2. obtain written permission from the executive body or one of the members of the executive body managing the current activities of the FO to establish or continue (for existing clients) business relationships with the PO;

3. establish the source of origin of the PO's funds and other property;

4. conduct continuous and enhanced monitoring of business relationships, including operations (transactions) carried out by the PO, in the manner established for high-risk clients;

5. continuously update available information on foreign POs.

FOs are obliged to apply the above measures also to family members and close persons of POs.

13. The measures indicated in sub-items 2-4 of item 12 of these Methodological Recommendations are applied to national POs and POs of international organizations, as well as their family members and close persons, in the case of determining a high risk of business relationships with such persons.

14. Clients must provide FOs with the requested information and/or documents for conducting CDD.

15. In the event that a client fails to provide information and/or documents necessary for conducting CDD, FOs make one of the following decisions:

1. do not establish business relationships with the client (refuse to accept for service or open an account);

2. suspend or terminate the established business relationship with the client (refusal of service) and terminate the contract concluded with the client;

3. do not carry out the operation (transaction).

When making a decision in this case, FOs are obliged to send a corresponding report to the financial intelligence agency within 1 (one) working day from the date of making such a decision.

16. The list of national POs, their family members, and close persons of POs in the form of an electronic database is formed by the State Service for Financial Intelligence under the Ministry of Finance of the Kyrgyz Republic (hereinafter – SSFI).

17. Access to the information of the electronic database of national POs is provided to FOs via secure electronic communication channels.

18. The list of database information of national POs to which access is provided is determined by an agreement between the SSFI and the database user.

19. Database users ensure confidentiality, preservation, and protection against unauthorized access and are responsible for the transfer to third parties of information obtained from the database of national POs.

20. FOs may use open source information to establish, monitor, and verify information regarding POs.

21. Identification of Beneficial Owner

22. FOs must identify whether the client is a PO. A PO may be a client – a natural person or a beneficial owner of a legal entity that is a client.

23. FOs should properly identify clients – POs, who may use legal entities so that their identity cannot be established, in order to, being the beneficial owner of the client, distance themselves from operations and access financial systems without the risk of being identified (intermediaries (e.g., lawyers, realtors, escrow agents, lobbyists, bankers) acting on behalf of POs to hide that the latter are the real owners of assets).

24. When carrying out CDD measures, FOs must identify the beneficial owner and take measures to verify their identity. If there are grounds to believe that the beneficial owner is a PO, then identity verification must be conducted in this case. If there is a presumption that a person is acting on behalf of the beneficial owner (or a natural person), it is necessary to clarify the reasons and grounds for such representation, as it may turn out that the beneficial owner of the client is a PO.

25. If a person acting on behalf of a PO, or a client, beneficial owner – is a family member of a PO or a close person of a PO, then appropriate CDD measures must be applied to them.

26. Enhanced Measures Regarding POs

27. CDD measures must be applied to each PO – client, beneficiary, beneficiary of a bank transfer, trust, as well as to closest relatives and close persons of POs.

28. When determining a high risk of business relationships with POs, FOs must apply at least the following enhanced CDD measures:

1. collection of additional identification information and documents regarding the client from available and reliable information sources, as well as using this information in the assessment of risk associated with the client;

2. collection of additional information about the client and beneficial owner to deeply understand the risk of possible involvement of such client and beneficial owner in criminal activity;

3. request additional information from the client regarding the purpose and intended nature of business relationships, as well as the source of the client's funds;

4. verification of the source of the client's funds used in the establishment of business relationships, to ensure that the funds are not proceeds from criminal activity;

5. regular updating of identification data of the client and beneficial owner using a risk-based approach;

6. request from the client additional information explaining the reason or economic sense of planned or carried out operations (transactions);

7. obtaining permission to establish or continue business relationships with the client from the executive body or one of the members of the executive body managing the current activities of the FO;

8. carrying out enhanced monitoring of business relationships by daily monitoring of operations (transactions), analysis of information, consideration and accounting of the purpose of funds, including manually, for the purpose of identifying signs of suspicious operations (transactions) and operations (transactions) lacking obvious economic sense or obvious lawful purpose, as well as bringing the results of monitoring to the attention of the internal control service and the executive body managing the current activities of the FO;

9. proposal to conduct the operation (transaction) through a bank account, in case the operation (transaction) is planned to be conducted without opening a bank account.

In this case, FOs must document the necessity of applying enhanced CDD measures for effective management and/or mitigation of risks.

27. It is recommended to apply reasonable measures to determine whether the client or ultimate beneficial owner (controller) is a foreign or national PO, or a PO of an international organization. Requirements for POs also extend to their family members and close persons of POs.

28. Effective control of business relationships with POs is the constant application of a risk-based approach and strict application of the "know your customer" principle.

29. Temporary Restrictions on PO Status

30. Requirements for determining POs must also cover the person who was once endowed with significant public functions, according to the "once a PO – always a PO" approach. The attitude towards a client whose powers have been terminated must be assessed based on risk and does not depend on timeframes.

31. The risk-based approach requires that FOs assess all AML/CFT risks regarding a person who is no longer endowed with significant functions and take effective measures to mitigate the risk. Possible risk factors include:

the level (informal) influence that the person may still exert; how high their position was as a PO; or

whether the past and current functions of the person are related (e.g., official appointment of a successor to the PO or the PO continues to deal with the same important issues).

7. Use of Information Sources for Identifying POs, Their Family Members, and Close Persons

8. Establishing the fact that a client or beneficial owner is a PO and/or who is a family member or close person causes difficulties, especially regarding foreign POs, about whom complete information is lacking. Another problem related to application is identifying the fact that an existing client of the FO has become a PO after establishing business relationships. Thus, it is especially important for FOs to monitor accounts of clients who are not POs, in order to understand whether the status, profile of the client, account operations have changed, and to update information about such a client. Such continuous monitoring must be based on the FO's AML/CFT risk.

9. It is very important to emphasize that CDD is the main way of obtaining information to find out whether a client is a PO. For example, the key factor may be the client's main occupation or place of work. However, there are other sources of information that can help FOs to establish whether a client is a PO. FOs should consider the use of additional information sources, especially to find out whether a person is a foreign PO.

10. Although general queries in major search engines can be difficult, FOs can use free search tools provided through specialized sites with targeted searches. In addition, targeted search in sources related to the client can help find reliable information, for example, through media sites. Internet search also helps to obtain general information about the country. For example, it is appropriate for FOs to know which countries prohibit certain POs (e.g., selected officials) from maintaining bank accounts abroad.

11. FOs are obliged to use available information sources, including information systems and databases, allowing for the continuous identification among clients, beneficial owners, and persons acting on behalf of the client, of POs, close relatives of POs, and persons close to POs, as well as updating the relevant information. If necessary and if possible, it is recommended to gain access to commercial databases.

12. Many countries have a system of disclosure of information about assets and property of persons endowed with significant functions.

13. A client's declaration of their PO status (e.g., providing information about current or past place of work or main occupation, which indicates that the person is a PO) is a measure that will help understand whether the client is a PO. However, FOs that introduce the client to the definition of PO and ask whether they fall into this category should not rely exclusively on this procedure and the information obtained (as it may be unreliable). Such a procedure shifts the obligations of the FO to its client, which is an unacceptable practice. Moreover, not all clients can determine whether they are POs or not, for example, because the client does not know the definition of "PO." Instead, organizations should more actively interact with clients and establish information that would correspond to individual elements of the definition of "PO." To handle this most effectively, there must be well-trained personnel and information collection.

14. FATF recommendations require that internal control rules include current employee training programs, which must include effective methods for determining whether a client is a PO. Training should use real-life examples to ensure their relevance.

15. Establishing the Source of Origin of Funds and Other Property of POs

16. FOs must establish the sources of origin of funds and other property of POs. It is important to note that "source of origin of property (wealth)" and "source of funds" are two different things.

17. "Source of origin of property (wealth)" – is the origin of all the PO's wealth (i.e., all assets). This information usually reflects data on what the client's wealth is and how the PO acquired it. And although FOs may not have information about assets they do not deal with, it is still possible to obtain information from commercial databases and other open sources.

18. "Source of funds" – is the origin of specific funds or assets that are the subject of business relationships between the PO and the FO (e.g., invested funds, funds deposited, or transferred during business relationships). Usually, such information is easy to obtain, but one should not limit oneself to only understanding where they were transferred from. The information obtained must be substantive, i.e., the source or grounds for its acquisition must be indicated.

19. Information on the source of origin of property (wealth) and source of funds may prove useful for continuous monitoring. When enhanced monitoring of business relationships is carried out, FOs must ensure that the level of operations corresponds to knowledge of the source of origin of property (wealth) and funds of the PO. The goal is to ensure correspondence between the reasons for establishing business relationships and what is expected from the PO, taking into account his/her circumstances. When making such a decision, the following factors must be taken into account: the PO's current income, sources of origin of property (wealth) and funds, which may be explained by the fact that he/she previously held another position, presence of commercial enterprises, family property.

20. If the level or type of activity in the course of business relationships differs from what could be reasonably explained, taking into account information on the sources of origin of property (wealth) and funds of the PO, then an immediate assessment of the situation must be undertaken. As a result of such an assessment, a decision must be made to start or continue business relationships or to take other measures, such as termination of relations and/or sending information to the SSFI.

21. When working with POs, verification should not be limited to the analysis of publicly available information about assets owned or under the actual control of the PO. When determining the source of origin of property (wealth), FOs should take measures to obtain more detailed information about what property (wealth) belongs to or is controlled by the PO. Refusal to