Amendments to the Law "On Approval of the Rules for Carrying out Currency Transactions"

For 2024, the Law of the Republic of Kazakhstan "On Approval of the Rules for Carrying out Currency Transactions in the Republic of Kazakhstan" will make the following changes to certain procedures:

Clause 13

Clause 13 of Paragraph 3 will state the following: evasion from fulfilling the requirements of the currency legislation of the Republic of Kazakhstan shall be carried out in the presence of information on the submission by the resident, who is the sender or receiver of money, of the authorisation of the authorised bank to transfer information on this payment and (or) transfer of money to the currency control authorities and law enforcement bodies.

As of 2023, paragraph 13 indicates that Payment and (or) transfer of money under a currency transaction, the performance of which may be aimed at the withdrawal of money from the Republic of Kazakhstan and defined in paragraph 2 of Article 21 of the Law on Currency Regulation and Currency Control, is carried out in the presence of information on the submission by the resident, who is the sender or receiver of money, of the authorisation of the authorised bank to transmit information on this payment and (or) transfer of money to the currency control authorities.

According to Paragraph 4, p. 2, Article 21 of the Law "On Currency Regulation and Currency Control" discloses the types and criteria of certain currency operations, the conduct of which may be aimed at withdrawal of money from the Republic of Kazakhstan, evasion from fulfilment of the requirements of the currency legislation of the Republic of Kazakhstan, and the procedure for their conduct.

For example, such currency transactions include the following transactions:

  1. a financial loan providing for the provision of money by a non-resident to a resident (except for an authorised bank), if the terms of the relevant currency agreement (initially or after amendments and (or) additions to the currency agreement) do not provide for the transfer of money to be received from a non-resident to the resident's bank accounts with authorised banks;
     
  2. a financial loan providing for the emergence of the resident's (except for the authorised bank) claims against a non-resident for the return of money, if the terms and conditions of the respective currency agreement (initially or after making amendments and (or) additions to the currency agreement) do not provide for the transfer of money to be received from a non-resident to the resident's bank accounts with the authorised banks;
     
  3. financial loan providing for the provision of money by a resident to a non-resident who is not an affiliated person, if the terms and conditions of the respective currency agreement (initially or after making amendments and (or) additions to the currency agreement) do not provide for the payment of remuneration for the use of the subject of the financial loan;
     
  4. export operations, if the terms of the respective currency agreement (initially or after making amendments and (or) additions to the currency agreement) stipulate that the term of fulfilment of non-resident's obligations to pay for export exceeds 720 (seven hundred and twenty) days from the date of fulfilment of obligations by the resident;
     
  5. import operations, if the terms of the respective currency agreement (initially or after making amendments and (or) additions to the currency agreement) stipulate that the term of fulfilment of the non-resident's obligations on delivery of goods (performance of works, rendering of services) or on return of money, including advance payment or prepayment amount in full (in case of non-fulfilment of non-resident's obligations on import), exceeds 720 (seven hundred and twenty) days from the date of fulfilment of obligations by the resident;
     
  6. transfer of money by a resident to a non-resident professional participant of the securities market, which performs currency transactions on clients' instructions, in the amount exceeding 50,000 (fifty thousand) US dollars in equivalent;
     
  7. transfer of money by a resident to his/her own account abroad in the amount exceeding USD 50,000 (fifty thousand) in equivalent;
     
  8. gratuitous transfer of money by a resident in favour of a non-resident in an amount exceeding USD 50,000 (fifty thousand) in equivalent.


Currency transactions specified in subparagraphs 1), 2) and 3) of part one of this paragraph do not include financial loans that arise under trade or Islamic financing transactions, as well as transactions carried out by non-residents with their branches (representative offices) in the Republic of Kazakhstan, and transactions between branches (representative offices) of foreign organisations in the Republic of Kazakhstan.

For the purposes of this paragraph, an affiliated person of a resident shall include:

  1. a person who owns ten or more per cent of voting shares of a joint stock company (ten or more per cent of votes of participants) of a resident legal entity;
     
  2. a person in which this resident owns ten per cent or more of the voting shares of a joint stock company (ten per cent or more of the votes of the participants);
     
  3. a person which, together with the resident in question, is controlled by a third party.

This paragraph shall not apply to intra-corporate money transfers performed by branches (representative offices) of foreign non-financial organisations.

Clause 16-2

Currency operations, the performance of which may be aimed at evading the requirements of the currency legislation of the Republic of Kazakhstan, shall include payments and (or) money transfers of one person in a calendar month under two or more currency contracts concluded with the same non-resident for the total amount exceeding the threshold value above which such currency contracts are subject to assignment of a record number.

Clause 16-3

When making a payment and (or) transfer of money under currency operations specified in paragraphs 16-1 and 16-2 of the Rules, the resident shall submit to the authorised bank the permission to transfer information on this payment and (or) transfer of money to the currency control authorities and law enforcement bodies, as well as upon request of the authorised bank other documents and information necessary for the authorised bank to monitor and study the operation in accordance with the requirements of the Law of the Republic of Kazakhstan "On Combating Legalisation (Laundering) of Proceeds of Crime".

Clause 16-4

When making payment and (or) transfer of money under currency operations specified in items 16-1 and 16-2 of the Rules, the authorised bank shall monitor and examine such operation in accordance with the programme of monitoring and examination of clients' operations provided for by the internal control rules developed and adopted in accordance with Article 11 of the AML/CFT Law.
 

The information will be interesting and useful to those who will be interested in working with payments, transfers and other currency transactions in the territory of the Republic of Kazakhstan.

 

If you have any questions, you can ask Andrey Artyushenko, partner, Head of REVERA Kazakhstan (a.artyushenko@revera.legal)

 


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