CBU explains why it introduced restrictions on foreign exchange transactions
Tashkent, Uzbekistan (UzDaily.com) -- The Central Bank of Uzbekistan published a statement in connection with plans to tighten requirements for foreign exchange transactions for legal entities.
On 15 September 2023, in order to ensure the performance of the Central Bank's supervisory tasks, the Bank Supervisory Committee decided to ensure transparency in FX operations and to improve monitoring of these operations based on legal requirements, the regulator said.
It should be noted that in recent days, requests have been received from foreign partner banks to commercial banks in Uzbekistan regarding the strengthening of customer due diligence (KYC-know your client) requirements when making payments related to FX operations and the suspension of money transfers from other banks, the statement read.
In this regard, and in order to properly keep accounts of FX transactions and to carry out the necessary monitoring measures over them, it was required that business entities should conduct FX transactions through the banks where the main account is opened, the CBU said.
Such a practice currently exists, and FX transactions related to capital movements are established through the main accounts of clients (No. 2536, December 17, 2013).
At the same time, it was noted that according to the requirements set forth in the rules of FX operations in the Republic of Uzbekistan (No. 3281, August 31, 2020), foreign currency sales operations to business entities are carried out based on the conclusions of the structural units (expert groups-compliance officers) established in banks, the regulator noted.
This decision of the Banking Supervision Committee did not restrict the purchase of foreign currency and other FX transactions of business entities.
The statement said in addition, this decision was made due to the limited ability of banks servicing secondary accounts of business entities to properly monitor compliance with sanctions and regulations.
However, taking into account the suggestions and opinion expressed by the mass media and business entities, Central bank cancelled the decision regarding the need to make FX operations of business entities through the banks where the main account was opened.
Appropriate instructions were given to commercial banks on the proper fulfillment of compliance-control requirements in providing services to customers through secondary accounts.