National Bank of Kyrgyzstan Comments on Suspension of Money Transfers with Russia

In regard to the  suspension by some Kyrgyz banks of money transfers between Kyrgyzstan and Russia, the National Bank explained to The Times of Central Asia that second-tier banks are working to prevent the negative impact of international sanctions. “To minimize the risk of secondary sanctions, measures are taken to strengthen control over clients and counterparties, to conduct thorough checks to ensure that they are not on the sanctions lists,” said  representatives of the financial regulator, before adding that the National Bank is remotely supervising compliance with international sanctions. All commercial banks in Kyrgyzstan must check their counterparties in adherence to the policy “know your client,” and request documents from clients confirming the origin of funds. It should be noted that money transfers between Kyrgyzstan and Russia are still carried out through ruble details of other Russian banks, which have not fallen under sanctions. In addition, it is possible to transfer funds through money transfer systems. On June 12, 2024, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) added the Moscow Exchange, the Russian Center, and the National Settlement Depository National Cleari to its sanctions list. As a result, trading in the U.S. dollar and euro was halted at the Moscow Exchange. Then, eight commercial banks from Kyrgyzstan restricted their work to Russian money transfer systems. But after a few days, work with Russian-sanctioned banks was resumed. In April this year, Kyrgyzstan stopped accepting Russian MIR cards due to the risk of secondary sanctions. Later, the head of the Kyrgyz Cabinet of Ministers, Akylbek Zhaparov, said that once a processing center is created, they will continue to work with Russian banking systems. Currently, the Interbank Processing Center of Kyrgyzstan is serviced by a Latvian company providing work software.