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A landmark Islamic banking law signed in Uzbekistan on 28 March 2026 has created the country’s first full legal framework for Sharia-compliant finance — and, in doing so, has placed a new set of practical demands on the compliance officers responsible for detecting money laundering and terrorist financing inside the country’s banks.
Law No. ZRU-1126 establishes a dual-track market: dedicated Islamic banks may be licensed, and existing conventional banks may offer Islamic financial services through so-called “Islamic windows.” Both tracks must operate under internal Islamic-operations management systems, including separate internal controls and audit functions. The law also provides for a Council on Islamic Finance at the Central Bank of Uzbekistan and equivalent advisory bodies within individual banks to ensure adherence to Islamic finance standards.
The instruments now available through the banking system — murabaha, ijara, musharaka, mudaraba and wakala — differ structurally from conventional loans and deposits. That structural difference is at the heart of the compliance challenge. In a murabaha transaction, for instance, a bank purchases an asset and resells it to a client at a marked-up price; the transaction involves a seller, a buyer, a physical or financial asset, and a sequence of ownership transfers, in addition to the underlying cash flows. Anti-money-laundering rules apply to all of it, not merely to the final payment.
Same Rules, Harder Analysis
Uzbekistan’s financial-monitoring obligations — covering anti-money-laundering, counter-terrorist financing and counter-proliferation financing, collectively referred to under the Russian-language shorthand ПОД/ФТ/ФРОМУ — apply to banking activity regardless of whether a product is structured on a conventional or Islamic model. The Financial Action Task Force has made clear that risk assessments must account for client risk, product risk, intermediary risk and the nature of the business relationship, rather than stopping at a product’s formal legal classification.
What changes in practice is the scope of the analysis. Under Uzbekistan’s Rules No. 2886, banks must identify suspicious and doubtful transactions and report suspicious ones to the Department for Combating Economic Crimes under the Prosecutor General’s Office. Those rules combine qualitative indicators — relating to the character of the client, counterparty, jurisdiction and economic substance — with quantitative thresholds expressed as multiples of a base calculation unit. For Islamic products, a single economic transaction may be spread across several interlinked contracts and payment legs, meaning that compliance teams must be able to reassemble those elements into a coherent picture and judge whether, taken together, they meet the criteria for a suspicious or doubtful operation.
Asel Omarbeková, Deputy Director of the Forensic Practice and Head of Financial Crime Prevention at KPMG Caucasus and Central Asia, argues that the task for Uzbek banks is not to build a separate AML system for Islamic finance but to adapt their existing internal-control architecture. Know-Your-Customer and customer-due-diligence procedures must capture all material participants and beneficial owners in a transaction, not just the direct client. Transaction-monitoring rules and scenarios must be calibrated to the economic logic of each product type, so that a system designed to flag unusual cash movements can also flag anomalies that only become visible when individual payments are linked back to the underlying contracts and asset transfers.
An Early Opportunity to Build It Right
The global Islamic finance industry reached approximately $4.4 trillion in assets in 2025, according to the Islamic Financial Services Board, with growth recorded across banking, capital markets and takaful, and with particularly strong momentum in non-bank segments and in newer markets including Africa and Central Asia. Uzbekistan’s own market remains at an early stage, which Omarbeková identifies as an advantage: the country has a rare chance to embed financial-monitoring requirements into the architecture of new products and processes from the outset, rather than retrofitting controls after the market has scaled.
International precedents point in the same direction. In Malaysia, where Islamic assets account for between 30 and 40 percent of the banking system, AML and CFT monitoring has been adapted to cover transaction structure, participants and underlying assets, not just cash flows. In the United Arab Emirates, where Islamic assets exceed 50 percent of some banks’ portfolios, the emphasis has fallen on staff expertise. In the United Kingdom, the largest Islamic finance centre in Europe, a single regulatory framework applies, with analysis focused on economic substance — a transaction that resembles a trade deal may in practice constitute financing and must be assessed accordingly.
The planned Tashkent International Financial Centre, which is intended to operate under a special legal regime and to attract modern financial instruments including Islamic finance, could accelerate the sector’s growth and bring in international investors. That prospect makes the compliance question more urgent: banks that move first on Islamic products but lag on the corresponding controls face both regulatory and reputational exposure. Those that build robust, product-aware monitoring from the start, the KPMG analysis suggests, are better placed to scale safely.