Kazakhstan’s National Bank to review trade hurdles for businesses partnering with Russia

Kazakhstan’s National Bank Chair Timur Suleimenov responded to an inquiry from members of the Mazhilis, the lower house of Kazakhstan’s parliament, regarding banks’ reluctance to provide loans to Kazakh enterprises exporting to Russia.

In mid-February, Azat Peruashev, leader of the Ak Zhol political party, submitted a parliamentary inquiry to Suleimenov, stating that Kazakhstani machine-building enterprises were facing challenges in exporting their products to Russia. Banks refused to grant them loans and process payments, citing concerns related to the risk of secondary sanctions from the U.S. and the EU.

Suleimenov pledged to raise this issue at the next meeting with financial regulators, banks and the Association of Financiers of Kazakhstan.

The National Bank’s chair noted that Kazakhstan has not joined the anti-Russia sanctions regime; therefore, there are no limitations on trade with Russia, including items from the sanctions lists. However, when carrying out transactions linked to sanctioned goods, it is impossible to fully eliminate the risk of secondary sanctions, even if partner companies are not targeted with trade restrictions.

According to Suleimenov, banks also keep the risk of sanctions in mind when processing payments. However, the regulator believes that redundant checks on Kazakhstani enterprises are unnecessary.

«One of the most important topics is so-called overcompliance — excessive concerns and verification procedures when processing payments related to Kazakhstani enterprises and products. The National Bank will raise this issue, identified as systemic, at the next meeting with financial regulators, banks and the Association of Financiers of Kazakhstan,» Suleimenov said in response.

At the same time, he emphasized that the final decision depends on the commercial relationship between the bank and its client. According to the chair of the bank, more than 20 Kazakhstani companies are currently subject to sanctions by the U.S., the EU, the U.K. and Japan for activities related to the supply of sanctioned items to Russia.