Kazakhstani banks have extended the timeframe for processing payments from Russian businesses.

This fall, Russian businesses faced increased payment processing times from Kazakh banks—they can now reach up to two months. Kazakh banks continue to strengthen compliance due to the risk of secondary sanctions, according to lawyers.

In the fall of 2024, Kazakhstani banks sharply increased the time it takes to process payments from Russian businesses, representatives of transport companies and specialized lawyers told RBK.

How have payment deadlines changed?

• By November 2024, the average payment processing time between Russia and Kazakhstan had increased by 24% compared to July of this year, and in some cases could reach two months, Roman Romashevsky, CFO of the transport company PEK, told RBK . He attributes this to Kazakhstani banks tightening their compliance requirements for transfers from Russia. "Financial institutions are increasingly requesting additional documents and clarifications regarding the sending and receiving companies, product characteristics, and transaction details," Romashevsky explained.
• The average payment processing time between Russia and Kazakhstan has indeed increased and can range from several weeks to two months, confirmed Andrey Gusev, managing partner of Nordic Star law firm: "The more complex and larger the transaction, the longer it takes to process." According to Alibek Slan, leading lawyer at REVERA Kazakhstan, the average payment processing time between Russia and Kazakhstan is currently approximately two to three weeks.
• The situation with payments to Kazakhstan worsened about three weeks ago, adds Anna Fomicheva, founder of Digital VED: "Currently, the minimum settlement period is 7-10 days, but it can reach up to a month. More than half of our settlements are processed with such delays." Fomicheva also confirms that local banks have strengthened compliance and require documents confirming that goods are not subject to sanctions. "This applies to direct contracts with customs clearance in Kazakhstan, not transit. This became impossible about a year ago. Therefore, we decided not to use Kazakh banks until the situation stabilizes. It has become time-consuming and economically unprofitable," Fomicheva explains.
• According to Logita Trade CEO Tatyana Alekseyeva, payments are going through Kazakhstan, but it's taking five days instead of four. Alekseyeva emphasizes that nothing critical has happened yet.
• A source at a logistics company reported that their company encountered an inability to transfer rubles through a Kazakhstani bank's representative office in Russia, as the credit institution requested every possible document: the contract, instructions, application, product codes, the type of service, and even photos of the cargo. Ultimately, the shipping company found another Kazakhstani bank to process the payments. It also requests documents, but only basic information, he said, rather than the full details.

This isn't the first time Kazakh banks have tightened the conditions for Russian business transfers. For example, in April 2024, Opora Rossii complained about payments from Russia to Kazakhstan being "stuck" for weeks. This summer, transport companies reported that the percentage of payment refusals through Central Asian banks rose to 30% in July.

As Romashevsky notes, the situation has currently improved with all countries in the region except Kazakhstan. "In November, the average payment processing time between Russia and Asian CIS countries ( Uzbekistan , Tajikistan, and Kyrgyzstan) decreased by more than 70% compared to July, to 3-5 days. This is primarily due to the increased share of payments in national currencies—this figure reached 80% of mutual trade turnover, and 84% of exports with Central Asian countries, according to the Russian Ministry of Foreign Affairs and the Federal Customs Service. Furthermore, businesses have established additional payment mechanisms and are now reorienting their partners and customers toward these models when tensions arise," Romashevsky noted.

Why are Kazakhstani banks strengthening compliance?

The increased compliance efforts by Kazakhstani banks are linked to a number of factors, primarily the pressure of international sanctions and the strengthening of global anti-money laundering measures, according to Gusev. "Kazakhstan, as Russia's neighbor, is subject to external pressure and seeks to minimize the risks of violating the sanctions regime. Any suspicion of involvement in illegal schemes threatens banks with serious reputational damage," the lawyer explains. Slan cites the same reason for the increased compliance efforts. "Banks strive to reduce their risks and, as part of their compliance procedures, thoroughly check client transactions for possible sanctions risks and threats," the lawyer adds.

In September 2024, the agencyBLOOMBERG , citing sources, reported that Russian banks and companies have increasingly chosen Kazakhstan for foreign exchange transactions with China. This occurred after the US imposed sanctions on the Moscow Exchange and strengthened measures threatening secondary sanctions for foreign banks helping Russia circumvent restrictions, which ultimately impacted Russian banks' cooperation with counterparties in China and Turkey. Bloomberg noted that the growing role of Kazakh banks was also indicated by increased transaction volumes on the Kazakhstan Stock Exchange (KASE): from June to August 2024, average monthly tenge trading volumes on the exchange's foreign exchange market against the Chinese and Russian currencies more than doubled compared to the first five months of the year, reaching 893 million yuan ($127 million) and 86 billion rubles ($925 million), respectively.

Kazakhstan has historically been one of Russia's counterparties, but due to the risk of secondary sanctions, most banks handling payments from and to Russia have strengthened controls and begun more thorough document checks, according to the consulting firm ITSWM: "The bank does not have strict requirements for payment processing times, as its primary goal is to obtain sufficient and adequate information regarding each transaction and conduct proper verification. Therefore, the workload is increasing for both small and large banks, as the former are limited in resources, while the latter are facing a sharp increase in the number of transactions, requiring additional staff, which is not always feasible."

According to Slan, Kazakhstani banks require clients to demonstrate business ties to Kazakhstan, which may include contracts with local counterparties for the supply of goods within Kazakhstan, as well as documents confirming a legal address in the country. "One of our clients encountered a bank requesting additional evidence of their 'involvement' in activities in Kazakhstan. When the client failed to provide the necessary documents, the bank suspended transactions on their account. In another case, the bank refused to open an account because the client was supplying goods included in sanctions lists. Notably, the refusal was based on sanctions imposed not only by the European Union or the United States, but even by Japan," Slan cited as examples. He explained that document requirements and the level of due diligence may vary from bank to bank.

Problems with payments from Russia began in 2022, following the imposition of sanctions due to Russia's military operation in Ukraine . Since December 2023, banks from friendly countries have begun to further tighten their approaches to working with Russian companies due to a US presidential executive order, according to which foreign banks could be subject to restrictions for assisting transactions with sanctioned Russian entities and facilitating supplies to the Russian defense industry. In June 2024, the US tightened this sanctions regime, including all Russian sanctioned entities, including Russian banks, in the definition of the Russian military-industrial base, increasing the risk of restrictions for interacting with them.