Restrictions on Opening Bank Accounts for Sanctioned Individuals in Uzbekistan
The Senate of Uzbekistan has approved a new law that could grant the Central Bank the authority to set requirements for managing economic sanctions-related risks in credit and payment organizations. The law would also allow the Central Bank to apply measures and sanctions if these requirements are not met. The draft law, titled “Introducing amendments and additions to certain legislative acts of the Republic of Uzbekistan due to the improvement of mechanisms for managing risks related to economic sanctions,” was considered during the Senate’s plenary session.
The proposed document aims to address the lack of regulation and control of risks related to economic sanctions in the current legislation. According to Abrorkhodja Turdaliev, Deputy Chairman of the Central Bank, the absence of norms for the regulation and control of risks related to economic sanctions has led to a situation where persons under economic sanctions can freely open accounts in local banks and conduct operations through them. This situation increases the likelihood of risks associated with economic sanctions across the entire banking system, including potential disconnections of correspondent relations with foreign banks and the application of economic sanctions against local commercial banks.
Under the new law, credit and payment organizations would be granted the right to refuse the opening of accounts and the execution of transactions for clients who do not comply with the requirements for managing risks related to economic sanctions.
The draft law was adopted by deputies at first reading, and if it passes further readings and is signed into law, it could have significant implications for the management of economic sanctions-related risks in Uzbekistan’s financial sector.
