Freedom Finance Kazakhstan Bank suspends operations with Mir payment system because of sanctions

ALMATY. Feb 28 (Interfax) - Freedom Finance Kazakhstan Bank has suspended operations with the Mir payment system due to sanctions, the bank's press service told Interfax.

In accordance with the requirements of the resolution of the National Bank of Kazakhstan board's resolution "On approval of the rules for the formation of a risk management and internal control system for second-tier banks, branches of non-resident banks of Kazakhstan," banks manage their own compliance risk, specifically the likelihood of losses due to non-compliance by the bank with both the legal requirements of the country and of the foreign countries that influence the activities of the bank, the bank said.

In taking measures to manage the bank's compliance risk, recent modifications to U.S. sanctions legislation dated February 23, 2024 were taken into account, the bank said.

"The bank is currently considering measures aimed at minimizing the risk of application of secondary sanctions from foreign jurisdictions, negative reactions from foreign correspondent banks, and claims cases or administrative and criminal measures against related parties of the bank by authorized bodies of foreign government entities. While considering the correct course of action in the current international legal environment, the bank decided to suspend work on operations associated with the Mir payment system," the bank said.

Freedom Finance Kazakhstan Bank is part of Freedom Holding Corp., which is controlled by Kazakh businessman Timur Turlov.

According to the National Bank of Kazakhstan, Freedom Finance Kazakhstan ranked 8th in terms of assets among 21 banks in the country as of December 1, 2023.