The Central Bank may be granted authority to set requirements for managing economic sanctions-related risks in credit and payment organizations and to apply measures and sanctions when these requirements are not met. The Senate approved the relevant law at first reading.
During the Senate’s plenary session, the draft law on "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.
This document envisages the Central Bank's authority to set requirements for managing economic sanctions-related risks in credit and payment organizations and to employ measures and sanctions in case of non-compliance.
Accordingly, credit and payment organizations are to be granted the right to refuse the opening of accounts and the execution of transactions for clients within the framework of requirements for managing risks related to economic sanctions.
"It should be noted that the current legislation does not contain norms for the regulation and control of risks related to economic sanctions. Moreover, the obligation of commercial banks to open accounts and conduct transactions, as set by legislation, permits persons under economic sanctions to freely open accounts in local banks and carry out operations through them. This significantly increases the likelihood of risks associated with economic sanctions across the entire banking system, including possible disconnections of correspondent relations with foreign banks and the application of economic sanctions against local commercial banks, which could result in restrictions on access to international financial markets and interruptions in cross-border transfers for business entities," said Abrorkhodja Turdaliev, Deputy Chairman of the Central Bank.
The draft law was adopted by deputies at first reading.
