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10 Jun, 2023 06:25

Kazakhstan blames its banks for blocked Russian transactions

A number of the country’s lenders are reportedly rejecting payments from the sanctioned country
Kazakhstan blames its banks for blocked Russian transactions

The government of Kazakhstan did not instruct domestic banks to reject transactions from Russia, the country’s finance minister, Yerulan Zhamaubaev, said on Thursday.

His comments were made in response to a report earlier this week by the Russian newspaper Vedomosti, which, citing market sources, claimed that a number of Kazakh banks were rejecting payments in rubles made by Russian importers in order to avoid the risk of secondary Western sanctions.

While Zhamaubaev did not refute the claims that the banks were indeed blocking ruble transactions, he said the decisions were made by the lenders without any directive from the government.

In general, there is such a concept as KYC [know your customer]. If the banking sector filters certain points related to sanctions and other risks, this is directly the work of the banks themselves. There were no instructions from the government,” Zhamaubaev told reporters on the sidelines of the Astana International Forum.

A Vedomosti source at a top-50 Russian bank told the news outlet that his bank has recorded dozens of ruble payments having been rejected by Kazakh banks since the start of this year, including from Halyk Bank, Fortebank, RBK Bank, and Bereke. The source noted that in most cases these banks cited internal policy as grounds for not processing the transactions.

Eldar Babaev, the head of the Kazakh branch of the law firm Aronov & Partners, later explained to RBK that regardless of the currency in which a transaction is made, if it does not pass the internal compliance check within a bank and is categorized as risky, it may be frozen or returned.

Meanwhile, according to a separate report by Kommersant, a number of countries, including Kazakhstan, have started blocking transactions involving deliveries of electronics to entities in Russia. Following that report, the Russian central bank said such situations may also stem from “the compliance procedures of specific foreign banks,” which depend on their internal policies and “may have varying degrees of severity at different times.

The latest Western sanctions dictate that any entities perceived to be aiding Russia in evading previously applied restrictions can themselves face sanctions. This includes facilitating transactions for the acquisition of sanctioned goods.

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