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Kazakh Machine Builders Face Payment Hurdles in Russia Trade

Azat Peruashev, head of the Ak Zhol party's parliamentary faction, which represents Kazakhstani business interests, has appealed to Prime Minister Olzhas Bektenov and National Bank Chairman Timur Suleimenov to address payment difficulties faced by machine-building enterprises exporting to Russia. According to the Majilis deputy, these challenges stem from within Kazakhstan itself. Peruashev explained that machine-building enterprises have approached his party, reporting that Kazakhstani banks are refusing them credit. Additionally, second-tier banks (BVUs) are declining to process payments for companies engaged in business with Russian partners. “These actions by financial institutions are driven by concerns that exported products could be added to U.S. and EU sanctions lists, which, in turn, could expose the banks to secondary sanctions,” Peruashev said. As a result, commercial banks in Kazakhstan have begun demanding that local factories provide guarantees that they will not export products to Russia - under threat of having their credit lines revoked. This is happening despite assurances from David O'Sullivan, the European Union’s sanctions envoy, who recently visited Kazakhstan. O'Sullivan stated that the European Commission would not impose sanctions on goods manufactured in Kazakhstan and exported to Russia. “The EU’s only concern is to prevent the re-export of sanctioned European products through Kazakhstan,” Peruashev said. “However, representatives of Kazakhstan’s largest banks find these assurances unconvincing. In their view, the decisive factor is not whether a product is re-exported or locally manufactured, but whether it appears on a sanctions list. This creates the risk of secondary sanctions, not necessarily from the EU, but from the U.S., including the potential disconnection from the SWIFT international banking system.” According to Ak Zhol, Kazakhstani exports of machine-building products and components to Russia fell by 15% last year. The banks’ refusal to process payments is not based on any official government restrictions. Last summer, seven Kazakh companies faced U.S. secondary sanctions for cooperating with Russian partners. In October, the list expanded to include Kazstanex, a company involved in supplying machine tools and components. As The Times of Central Asia previously reported, during his visit to Astana in January, David O'Sullivan stated that the EU had sanctioned two Kazakh companies so far but did not rule out further additions to the list.

Russia Banking Migration Legislation Migrants money tranfer migrants rights

Are Registry Errors Behind Migrants’ Bank Account Freezes in Russia?

Dozens of migrants in Russia have complained that they were wrongfully included in the newly launched Register of Controlled Persons, leading to blocked bank accounts, detentions at the border, and job dismissals, according to human rights activist Valentina Chupik. During the first two days of the registry's operation, 31 people sought Chupik's assistance: 13 were citizens of Kyrgyzstan, eight from Tajikistan, seven from Uzbekistan, and one each from Armenia, Azerbaijan, and Turkmenistan. Among them were three holders of Russian residence permits and one with a temporary residence permit. All claim they were added to the list without justification. The majority - 17 people - discovered their inclusion in the register through blocked bank accounts, with 12 of them clients of T-Bank. Four were notified by police following their detention, another four were denied entry at the Russian border, and one individual lost their job. Interviews with those affected revealed no valid reasons for their inclusion in the registry, except for four cases where there might have been formal grounds for entry bans. However, none of these migrants had received prior notification. In addition, five had previously faced unlawful restrictions: three were expelled, one was stripped of a residence permit, and another was banned from entry - though all these decisions were later overturned. Chupik advised migrants to withdraw their money from Russian banks immediately, warning that indiscriminate entries into the registry put their finances at risk. “Since they enter the register indiscriminately, I advise you to withdraw all your funds and send them home, leaving only the necessary minimum,” she said. Baza, a Telegram channel linked to Russian law enforcement agencies, also reported the mass blocking of hundreds of foreign nationals' accounts. Additionally, human rights activist Alexander Kim stated that refusals to provide state services, including migration registration, have become increasingly common. The Register of Controlled Persons was launched in summer 2024 following the adoption of a law on the expulsion of foreign citizens. The move came amid an anti-migrant crackdown that intensified after the Crocus City Hall terrorist attack. Foreign nationals included in the register face deportation and lose the right to register businesses and property in Russia.

Kyrgyzstan’s Keremet Bank Restricts Use of Visa Cards Following U.S. Sanctions

Keremet Bank, a commercial bank in Kyrgyzstan recently subjected to U.S. sanctions, has announced new restrictions on the use of its Visa cards. The announcement was issued through the bank’s press service. As per the official statement, Visa cards issued by Keremet Bank can now only be used at the bank's ATMs, POS terminals, and other payment devices. To provide customers with an alternative, the bank is offering free issuance of cards under the national payment system, Elkart. The process for obtaining an Elkart card will take up to five working days in Bishkek and up to ten days in other regions. The bank reassured its clients that their funds remain secure. Customers can withdraw money at the nearest branch by presenting a valid passport or transferring funds through the mobile application to Elkart cards or settlement accounts. The U.S. Treasury Department imposed sanctions on Keremet Bank, citing alleged ties to Russian authorities and collaboration with Promsvyazbank, a Russian financial institution that has been under U.S. restrictions since 2022.

Uzbekistan Receives $14.8 Billion in Remittances in 2024

The total volume of remittances sent to Uzbekistan in 2024 reached a record $14.8 billion, marking a 30% increase - equivalent to $3.4 billion - compared to the previous year. This data comes from the Central Bank’s Brief Review on Currency Transactions of Individuals. Key Sources of Remittances Russia remains the dominant source of remittances for Uzbekistan, accounting for 77% of the total, or $11.5 billion - a 29% increase from 2023. Other key contributors include: Kazakhstan: $795 million United States: $577 million South Korea: $534 million Turkey: $405 million United Kingdom: $135 million July saw the highest inflow of remittances, with $1.785 billion received, while February recorded the lowest amount, at $738 million. Remittance growth varied significantly by country / region: United Kingdom: Up 83% South Korea: Up 56% United States: Up 35% European Union: Up 32% While inflows surged, the volume of remittances sent abroad from Uzbekistan also grew, increasing by 19% in 2024 to reach $2.8 billion. Russia remains the largest source of remittances to Uzbekistan, thanks to the significant number of Uzbek migrants working there. However, new restrictions introduced in 47 Russian regions, including the occupied territories of Crimea, Sevastopol, and Zaporozhye, could negatively impact Central Asian migrant workers. According to the Russian Ministry of Internal Affairs, there were more than 6.1 million foreigners in Russia in 2024, the majority from Central Asia and other CIS countries. Among them, over 1.88 million Uzbek citizens visited Russia during the first eight months of the year, underscoring the strong ties between Uzbek migrant labor and Russia's economy. The substantial increase in remittances highlights the critical role of labor migration in Uzbekistan’s economy. However, the evolving regulatory environment in key source countries like Russia could pose challenges for Central Asian migrants and, by extension, Uzbekistan’s remittance-dependent economy.

Russia Migration Parliament Politics Migrant Workers money tranfer Russia's War migrants rights Sanctions

Russian MP Blames Central Asians for Ruble Depreciation

Mikhail Matveyev, a member of Russia’s State Duma, has attributed the depreciation of the Russian ruble in part to remittances by labor migrants from Central Asia and the Caucasus. In a statement on his Telegram channel, Matveyev argued that millions of migrants working in Russia transfer their earnings abroad, removing significant sums from the Russian economy. According to him, these remittances fuel demand for foreign currencies, such as the dollar, thereby weakening the ruble. Citing statistics, Matveyev claimed that in 2023, labor migrants sent $5.7 billion from Russia to Tajikistan - nearly half of Tajikistan’s GDP. Kyrgyzstan received remittances equal to about one-third of its GDP, while Uzbekistan received over $14.5 billion, accounting for 12-15% of its GDP. Other significant recipients included Georgia (over $2 billion), Armenia (over $3 billion), and Kazakhstan. Matveyev also criticized some of these countries for their stance on Western sanctions against Russia. He noted that several countries in the Eurasia region have joined sanctions targeting Russian banks and refuse to process transactions using the Russian Mir payment system. This, he said, forces migrants to withdraw cash dollars from Russia to transfer home, exacerbating the pressure on the ruble exchange rate. The MP’s remarks came amid a sharp drop in the ruble’s value against the dollar last week. For more than 30 years, millions of Central Asian citizens have migrated to Russia for work. However, recent trends indicate an increase in return migration, driven by Russia’s deteriorating economic conditions, stricter immigration rules, worsening attitudes toward Central Asian workers, and attempts by Russian authorities to recruit immigrants - both with and without Russian citizenship - for military service in Ukraine.

Kyrgyzstan Bans Commissions on Online Transfers

The National Bank of the Kyrgyz Republic (NBRK) has adopted a resolution requiring commercial banks to prohibit commissions on money transfers in the national currency, the som (KGS), within the country. The NBKR said such measures are taken to popularize banking services for the population. “The measure will contribute to ensuring accessibility of banking services for all segments of the population and accelerate the introduction of digital technologies in the banking sector,” the bank said. The NBKR resolution will be in force until the end of 2025. The country's authorities have been popularizing non-cash payments for years. President Sadyr Japarov has stated that such payments would bring the economy out of the shadows. “The development of cashless payments is a step towards modernizing our economy, strengthening financial security, and increasing financial inclusion. We must make the payment process so convenient and simple that even those who are used to cash could not resist the transition to new technologies,” said the head of the Cabinet, Akylbek Japarov, at a government meeting.