Kazakhstan banks will be able to block transfers: new rules

Tengrinews.kz - The Central Securities Depository (KCSD) has supplemented the rules for refusing to transfer funds, crediting or writing off due to sanctions risks.
The KCSD has amended the rules for establishing, maintaining and terminating business relationships. According to the new amendments, the depository may refuse to provide services to a client if this may entail the implementation of any of the risks inherent in the activities of the Central Depository, which were identified by its employees as part of the implementation of internal control procedures.

"The amendments were developed in order to minimize the risks inherent in the activities of the Central Depository and possible due to failure to comply with the requirements of OFAC (the US Office of Foreign Assets Control), accounting organizations and / or servicing banks when they establish requirements, restrictions and / or special conditions that have a direct impact on the activities of the Central Depository," the organization reported.

The amendments provide for:

provisions obliging the depository's clients to protect KCSD from claims/lawsuits from their clients;
the right of KCSD to refuse to provide a service to a client if this may entail the implementation of any of the risks inherent in the depository's activities, which were identified by its employees as part of the implementation of internal control procedures.

The amendments will come into force on December 4.
Depository is a key infrastructure organization of the Kazakhstani financial market in the field of post-trading services. KCSD offers its clients depository, registrar and information services, as well as bank account servicing and payment agent services. It is an authorized depository of the National Bank, the Ministry of Finance and local executive bodies of Kazakhstan.
Recall that at the end of October, the U.S. Department of the Treasury imposed sanctions on the Kazakh company. Kazstanex was added to the U.S. sanctions list as one of the intermediaries in Central Asia for supplying machinery to Russia. Later, several companies from Kazakhstan were also included in the UK's sanctions list.