Kazakhstan’s Banking Sector: What Non-Profit Organizations Need to Know
Understanding the Requirements and Regulations
A recent report by the European Center for Not-for-Profit Law (ECNL) and PILnet highlights the importance of non-profit organizations (NPOs) understanding the requirements and regulations in Kazakhstan’s banking sector. The country’s Anti-Money Laundering (AML) law has specific implications for NPOs operating in the sector.
What is a Suspicious Transaction?
In Kazakhstan, a suspicious transaction is defined as any transaction that may be related to criminal activity, including money laundering or terrorist financing. The AML law provides a list of criteria that banks must consider when identifying suspicious transactions, which includes:
- Transactions with charities
- Significant transfers
- Transactions involving non-residents without a business relationship
Restrictions on Bank Transactions
Kazakh banks have the right to terminate business relations with financial institutions from countries that do not comply with Financial Action Task Force (FATF) recommendations. The list of jurisdictions that do not meet these standards is publicly available, and NPOs operating in such countries may face restrictions or limitations on their bank transactions.
Obligations and Reporting Requirements
Banks in Kazakhstan are required to report certain financial information to regulatory authorities, including the National Bank of Kazakhstan. However, these reporting obligations are general and do not apply specifically to NPO clients. Banks also have an obligation to protect client confidentiality, which may be waived under certain circumstances, such as a criminal investigation.
Implications of Russian Sanctions
The imposition of Russian sanctions has not led to any changes in Kazakhstan’s banking regulations. However, banks may have made practical adjustments in completing procedures.
Key Takeaways for NPOs
For NPOs operating in Kazakhstan, it is essential to understand the AML law and its implications for their banking activities. The report provides valuable insights into the requirements and regulations that NPOs must comply with when working with Kazakh banks.
Source: European Center for Not-for-Profit Law (ECNL) and PILnet Report