Kazakhstan Limits Validity of Payment Cards for Non-Residents to 12 Months, DKnews.kz reports.
On December 31, 2024, the Agency for Regulation and Development of the Financial Market (ARDFM) of Kazakhstan adopted Resolution No. 96, introducing new restrictions on the issuance and usage of payment cards for non-residents. Published in early 2025, the resolution aims to enhance oversight of financial transactions and mitigate risks related to money laundering and terrorism financing.
Key Provisions of the Resolution
Validity Period for Non-Resident Payment Cards
According to the new rules, payment cards issued to non-residents of Kazakhstan will have a maximum validity of 12 calendar months. However, this restriction does not apply to:
- Business entities;
- Diplomatic staff;
- Investors.
This measure is designed to simplify monitoring and control over card usage by private individuals without residency status in the country.
Limits on the Number of Cards
Under the new regulations, individuals holding more than five payment cards from a single bank may be flagged as posing a higher risk of money laundering or terrorism financing. Previously, this threshold was set at ten cards. Exceptions are made for:
- Additional cards issued in the names of children;
- Credit cards used for obtaining and repaying bank loans.
- These changes reflect a broader effort to reduce the risk of fraud and financial abuse.
Reasons for the Restrictions
The ARDFM highlights that these measures aim to improve the transparency of financial transactions and curb illicit activities. Over the past few years, countries worldwide, including Kazakhstan, have tightened controls on financial flows to combat terrorism financing and money laundering.
Kazakhstan has already implemented measures to restrict certain financial activities of non-residents, such as account openings and currency regulation. The new rules represent a continuation of this strategy to strengthen the nation’s financial system.
Potential Impacts
The new restrictions are expected to have varying effects:
- For non-residents:
Non-residents will need to renew their payment cards annually unless they fall under the exceptions. While this enhances control, it could create inconveniences for private individuals not involved in business or diplomatic activities. - For banks:
Banks will need to modernize internal monitoring systems to comply with the tightened controls on the number of issued cards. However, this could also reduce operational burdens by streamlining card issuance processes. - For Kazakhstan's economy:
Strengthening regulatory oversight will boost international confidence in the country’s financial system. This is particularly significant as Kazakhstan continues integrating into the global economy.
International Context
The measures introduced by Kazakhstan align with global trends. Many countries are increasing financial oversight to minimize risks associated with global challenges like money laundering, terrorism financing, and tax evasion.
For example:
- The European Union has strengthened its Anti-Money Laundering (AML) directives.
- In the United States, customer identification requirements have been tightened under the Bank Secrecy Act.
- Russia has implemented stricter requirements for non-residents as part of its financial security policy.
Resolution No. 96 represents a significant step in bolstering the stability and security of Kazakhstan's financial sector. The new rules underscore the need to balance customer convenience with adherence to international safety standards. However, successful implementation will require banks to pay close attention to monitoring processes and adapting to the new requirements.
These measures will not only enhance the regulation of Kazakhstan’s financial market but also strengthen its reputation on the global stage, ensuring a safer and more transparent financial environment.
