RESOLUTION OF COMMITTEE ON SUPERVISION OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of July 31, 2025 No. 39/1

About approval of Recommendations about automation of check according to sanctions lists

(Statement)

Being guided by Item 2.4. The provision "About Committee on Supervision of National Bank of the Kyrgyz Republic" approved by the resolution of Board of National Bank of the Kyrgyz Republic of March 19, 2005 No. 6/2, Committee on supervision of National Bank of the Kyrgyz Republic decides:

1. Approve Recommendations about automation of check about sanctions lists it (is applied).

2. This resolution becomes effective from the date of its acceptance.

Appendix

to the Resolution of Committee on supervision of National Bank of the Kyrgyz Republic of July 31, 2025 No. 39/1

Recommendations about automation of check about sanctions lists

1. General provisions

1. These recommendations about automation of check about sanctions lists (further - Recommendations) are developed for the purpose of increase in efficiency of activities of commercial banks (further - banks) in case of identification of persons and the organizations falling under sanctions measures and observance of requirements of the legislation of the Kyrgyz Republic in the sphere of counteraction to financing of criminal activities and to legalization (washing) of the criminal income.

2. The purpose of Recommendations is forming of single approaches to:

- automation of processes of reconciliation with sanctions lists;

- to source selection of sanctions data;

- to application of technology solutions (including based on artificial intelligence and algorithms of machine training);

- to management of results of checks.

3. These Recommendations can be used by banks as basis for domestic policy of bank regarding observance of sanctions regimes and risk minimization.

4. Check according to sanctions lists shall be performed within internal control system of bank according to the legislation of the Kyrgyz Republic, the international obligations and recommendations of Group of development of financial measures of anti-money laundering (FATF).

5. The bank should develop the internal documents regulating:

- operating procedure with the automated system of sanctions monitoring (screening) (further - the automated system);

- distribution of responsibility between structural divisions of bank in case of implementation of the automated system and its use;

- actions of bank employees in case of confirmation of coincidence and procedure for processing of results of screening;

- decision making by responsible structural division by results of confirmation of coincidence according to the legislation of the Kyrgyz Republic;

- procedure for documentation and storage of the obtained data;

- recurring inspections of efficiency of internal system.

2. Approaches to the automated check

6. Banks are recommended to use automated for the purpose of decrease in operational and regulatory risks, exception of human factor and ensuring compliance with sanctions requirements in real time.

7. Automation of checks according to sanctions lists is measure for increase in accuracy, timeliness and completeness of observance of sanctions requirements.

8. The effective system of sanctions monitoring (screening) shall provide:

- operational identification of persons and the organizations from sanctions lists;

- decrease in number of false operations in case of high sensitivity of algorithms;

- integration with internal bank systems;

- reproduce results of checks and possibility of audit of actions of employees.

9. The system shall perform check regarding sanctions compliance concerning the following categories:

- clients - physical persons and legal entities;

- beneficial owners and the controlling persons;

- authorized persons and representatives;

- partners on transactions;

- correspondent banks and other financial intermediaries.

10. Screening according to sanctions lists shall be performed in the following cases:

- in case of establishment of business relations (the beginning of customer service);

- when making one-time transaction (without opening of the account);

- in case of each updating of sanctions lists;

- in case of modification of information about the client (including full name, the address, documents);

- when implementing of the entering and outgoing transactions, including payments, transfers.

3. Information security and data protection

11. The automated system shall:

- conform to requirements of the legislation of the Kyrgyz Republic for information security, including regarding personal data protection and bank secrecy;

- provide backup;

- provide protection against unauthorized access;

- provide differentiation of the right of users (role model of access).

4. Testing and quality control

12. Before input of the automated system in operation it shall pass the test including:

- check of correctness of work of algorithms of comparison;

- check of completeness of scope of sanctions lists;

- modeling of standard scenarios and boundary cases (edge cases).

13. After implementation follows bank:

- to periodically perform overall performance of system;

- analyze statistics of false coincidence and the passed sanctions persons;

- document results and if necessary to adjust parameters of algorithms.

5. Audit and reporting

14. The automated system shall:

- keep complete history of all checks, including coincidence and actions of employees (date, benchmark methods, result, the basis of the made decision);

- provide automatic report generation on sanctions screening.

6. Sources of sanctions data

15. The automated system shall provide automatic loading and regular updating of sanctions lists, including without limitation:

- summary sanctions list of the Kyrgyz Republic;

- list of sanctions of the UN Security Council;

- list of sanctions of the European Union;

- the list of Management on control of foreign assets of the Treasury Department of the US (OFAC);

- list of sanctions of Great Britain (OFSI);

-, etc.

16. For improvement of quality of data and expanded comparison banks can use commercial databases which:

- unite data from sanctions sources;

- contain additional attributes (pseudonyms, communications, photos, transliterations);

- are updated in real time or several times in days.

17. Banks can be integrated with the following sources of sanctions data, but without being limited:

- LexisNexis (World Compliance);

- Refinitiv (World-Check One);

- Dow Jones Risk & Compliance;

- Accuity/Fircosoft (Firco List Update);

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