News that the Uzbek government has decided to join financial sanctions against Russia has spread on social networks. The Budget and Economic Reforms Committee of the Legislative Chamber of Oliy Majlis provided official information on the contents of the draft law.

Reportedly, at the meeting of the Legislative Chamber of Oliy Majlis on February 13, 2024, the draft law “On amendments and additions to certain legal documents of the Republic of Uzbekistan in connection with the improvement of risk management mechanisms related to economic sanctions” was considered in the first reading. This bill was introduced by the Cabinet of Ministers on December 29, 2023.

“Today, the use of economic sanctions by various countries, international organizations and financial institutions has become a reality of the present time in international economic relations.

However, the national legislation of the Republic of Uzbekistan does not have a legal basis for regulating and controlling the risks associated with the use of secondary economic sanctions in the activities of credit and payment organizations.

In such circumstances, each credit and payment organization determines these risks based on its own needs and visions, and imposes restrictions on clients at the level and scope it likes. Such situations lead to subjective approaches to residents and non-residents of the Republic of Uzbekistan in opening bank accounts and conducting banking operations, as well as violation of the legal rights of customers.

Based on this, the draft law envisages giving the Central Bank of the Republic of Uzbekistan the authority to establish uniform requirements for the management of risks related to economic sanctions by credit organizations, payment organizations and payment system operators.

This serves to increase the efficiency of state policy in the banking sector, to create a mechanism of a unified, unified approach of credit and payment organizations in working with customers, as well as to strengthen the confidence of the population and international financial institutions in the banking system of our country,” the report reads.

According to the Committee, this bill is not directed against any country. Almost all countries of the world have a procedure provided for in the project, the purpose of which is to prevent secondary sanctions against national financial organizations themselves.