Kyrgyzstan State Banks Cut Ties With Dozens of Companies Over Sanctions Risks

Kyrgyzstan is intensifying its efforts to mitigate sanctions risks, with state-owned banks actively terminating business relationships with numerous companies. A high-level meeting, chaired by Bakyt Sydykov, the President's Special Representative for Sanctions Policy, focused on improving compliance and internal control mechanisms.

The meeting reviewed a request from European entities concerning legal entities in Kyrgyzstan potentially linked to sanctions risks. A significant focus was placed on the financial sector's sanctions risk management. State banks are reportedly enhancing their compliance control systems to adhere to international restrictive measures.

These banks conduct daily screening of customers and payments against sanctions lists from the EU, UK, and US, employing a risk-based approach. This involves analyzing ownership structures, business activities, counterparty geography, and other risk factors. Transactions flagged for potential sanctions violations are rejected or undergo further review.

As a result of these strengthened procedures, Eldik Bank JSC has terminated relations with approximately 80 companies, with another 40 under review. Similarly, ABANK JSC has ended ties with about 51 companies, while 40 others are being assessed. Both banks have also submitted thousands of suspicious transaction reports to the relevant authorities this year.