Persons under economic sanctions may be prohibited from opening accounts in Uzbek banks. The respective bill was passed in the first reading by the Legislative Chamber at the meeting on Tuesday.

The explanatory note said that the bill was based on “the need to create a system for compliance with sanctions in the country’s banks during the period of integration of the banking and financial system of Uzbekistan into the international financial system.”

Reportedly, the current geopolitical conditions, the risks associated with economic sanctions have been exacerbated, therefore it is necessary to create a legal framework for compliance with sanctions in banking and payment organizations

Among the risks are a possible severance of relations with foreign correspondent banks, the application of economic sanctions against Uzbek banks, as well as restrictions on entry into foreign financial markets, which may cause interruptions in cross-border monetary settlements between entrepreneurs.

Deputy governor of the Central Bank Abrorkhuzha Turdaliev said that the bill provided for the provision of the Central Bank with powers to establish requirements for managing risks associated with economic sanctions in credit and payment institutions, their correct assessment and minimization of risks (amendments to Article 61 of the Central Bank Law).

According to the bill, banks, payment organizations and systems, as well as non-banking entities will be able to refuse or restrict opening accounts and conducting transactions with clients if there is a risk of economic sanctions being applied to banks.

Meanwhile, payment organizations will be required to attach to the list of documents required to obtain a license a description of the measures that are taken to comply with the requirements for managing risks associated with economic sanctions.

When developing the amendments, the experience of Latvia, the Czech Republic, Estonia and Georgia was reportedly taken into account.