In Kyrgyzstan, legal action is being taken to wind up 16 companies due to the risk of sanctions

In Kyrgyzstan, following an audit of around 40 companies, files relating to 16 of them have been referred to the courts for consideration of their liquidation. The companies were examined for potential sanctions risks.

This information emerged following a working meeting held on 2 October, chaired by Bakyt Sydykov, the President’s Special Representative for Special Assignments.

Inspections of the remaining companies are ongoing. Once these are complete, the authorities intend to determine further measures in accordance with the law.

At the same time, the country is preparing a mechanism for compiling a so-called sanctions ‘blacklist’ – a list of individuals and companies posing a heightened risk. A decision on its introduction is expected to be approved in the coming days.

It is anticipated that the new mechanism will enable the monitoring of foreign economic transactions carried out by such companies and their counterparties, as well as the identification of potential sanctions risks prior to the execution of such transactions.

Separately, the authorities discussed tightening compliance procedures in the banking sector. As of 2 October, ‘ABank’ had terminated business relations with approximately 100 companies, closing their accounts.

The meeting was attended by representatives of government bodies, the National Bank and commercial banks.

These tighter controls come against the backdrop of Kyrgyzstan’s efforts to minimise the risk of secondary sanctions and to restrict the use of the local financial system and companies registered in the country in transactions that could give rise to complaints from foreign regulators.