Kazakh government adopts bill to reduce transactions in foreign currency

The Kazakh government has adopted a bill developed by the National Bank of Kazakhstan to reduce transactions in the country in foreign currency.

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“The bill is designed to expand the coverage of statistical monitoring of foreign exchange transactions and reduce the use of foreign currency in Kazakhstan,” said bank chair Daniyar Akishev, presenting the bill at a government meeting.

One of the important changes and additions envisioned by the bill is strengthening currency control over transactions aimed against moving funds outside the country.

“In accordance with the instructions of the head of state, the bill defines a list of currency transactions that have signs of movement of funds outside the country. First is the provision of a financial loan by a resident to a non-resident, which does not provide for repayment by crediting funds in Kazakhstan. Second is the provision of a financial loan by a non-resident to a resident, which does not provide for repayment by crediting funds in Kazakhstan. Third is the provision by the resident of an interest-free financial loan to an unaffiliated non-resident for a period exceeding 720 days or operations for payment of export or import with a repatriation period of more than 720 days,” said Akishev.

“Such transactions will be carried out by banks only upon submission by the resident of permission to transfer information to the financial control authorities and the draft law provides for the right to transfer information on currency transactions containing bank secrecy to the state committee,” he added.

The proposal also introduces a number of changes aimed at state revenue bodies’ access to more complete information on currency transactions, improving the effectiveness of currency control in the legislation. At the same time, the draft law intends to preserve the principles of the liberal currency regime.

The draft legislative amendments were adopted at the government meeting and will be submitted for consideration to the Mazhilis (lower chamber of the Kazakh Parliament). The planned date for putting it into effect as the law is July 1, 2019.