With the outbreak of hostilities between Russia and Ukraine, the concept of sanctions has firmly entered into everyday life, both for every citizen of Kyrgyzstan, and in the activities of large and small companies – rising prices, shortages of goods, and following them some services, supply disruptions, the difficulty of securing contracts and other. Financial institutions were no exception, despite the conventional wisdom regarding the superprofits of migrating foreign exchange flows.
Moreover, in Kyrgyzstan today, almost all banks are candidates for getting into the US OFAC SDN list for secondary sanctions.
To begin with, let’s clarify what this list is and what it threatens.
In the United States, the Office of Foreign Assets Control (OFAC, Office of Foreign Assets Control), a division of the US Department of the Treasury, is responsible for planning and implementing economic and trade sanctions in order to ensure American national security and foreign policy. The strategic objectives of OFAC are determined by the White House. OFAC publishes what is known as the SDN List, a constantly updated list of entities that are subject to OFAC’s restrictions. It includes both legal entities and individuals.
To remove an entity from the SDN list, a petition must be filed with OFAC, and the change in the entity’s activities must be justified with assurances that there will be no future violations by demonstrating that the entities “placed on the SDN have renounced any potentially sanctionable activity following being sanctioned” .
At the same time, it is not easy for the vast majority of commercial companies to refuse cooperation with Russian partners, which means sooner or later – getting into the SDN list. For banks, being on this list means significant problems in working with all international payment systems, a sharp restriction of access to international financial resources, difficulties in issuing credit cards, etc.
In other words, both the banks themselves and their clients – legal entities and individuals – are facing difficulties.
So, secondary sanctions are on the way, and here, frankly speaking, it is impossible not to admire the hardening of Kyrgyz businessmen, who seem to have a new gene responsible for survival in any conditions of a permanently stormy market.
So, for example, back on January 13 of this year, the board of Bakai Bank, signed by the chairman of the board of directors of the bank, Sergey Ibragimov, already (!) Completed all the procedures in order not to get into the mentioned OFAC SDN list (a photo of the insider document is attached). The bank itself does not advertise its actions in any way, however, following malicious jokes, it remains only to state that Bakai Bank worked ahead of the curve.
