Individuals under economic sanctions may be prohibited to open bank accounts in Uzbekistan, as per the bill the Legislative Chamber of Oliy Majlis approved in the first reading at a meeting on Tuesday.
The explanatory note states that the bill is established on “the necessity to create a system of compliance with sanctions in the country’s banks during the integration of the banking and financial system of Uzbekistan into the international financial system.”
The current geopolitical circumstances were mentioned as a contributing risk increasing factor to economic sanctions. Therefore, there is a need to create a legal framework for organizing compliance with sanctions in credit and payment entities.
Some of the risks are a possible breakdown of relations with foreign correspondent banks, imposition of economic sanctions on domestic banks and limitations on entry to foreign financial markets. These factors may cause disruptions in cross-border monetary settlements for entrepreneurs.
Deputy of the Central Bank Abrorxoja Turdaliyev shared that the document provides for granting the Central Bank the authority to establish requirements for managing risks associated with economic sanctions in credit and payment organizations, their proper assessment and risk minimization (amendments to Article 61 of the Law on the Central Bank).
Central Bank Deputy Abrorxoja Turdaliyev shared that the document grants the Central Bank the authority to set requirements for managing risks related to economic sanctions in credit and payment organizations, their proper assessment and risk minimization (amendments to Article 61 of the Law on the Central Bank).
According to the draft law, banks, payment organizations and systems, as well as non-banking organizations will be able to refuse or restrict the initiation of bank accounts and transactions with customers in case of a potential risk of economic sanctions affecting the banks.
Additionally, payment institutions will be obligated to attach to the list of documents to receive a license, a description of the measures taken to meet the requirements for managing risks associated with economic sanctions.
The experience of Latvia, the Czech Republic, Estonia and Georgia was mentioned to have been taken into account while drafting the amendments.
