Sanctions Compliance in Kazakhstan

Kazakhstan sits at the intersection of multiple sanctions regimes: EU, US, UK and Swiss measures all have extraterritorial reach that directly affects companies operating in or through the country. As a significant trade corridor and financial hub, Kazakhstan faces heightened scrutiny over potential sanctions circumvention, making a robust compliance programme not merely advisable but operationally essential. Ferraz & Whitmore advises international businesses, funds and financial institutions on building and maintaining that programme across the full range of applicable regimes.

Why Kazakhstan Has Become a Sanctions-Sensitive Jurisdiction

Since February 2022, Western regulators have treated Central Asia as a priority zone for circumvention risk. Kazakhstan's geographic position, its deep trade links with Russia and its role as a re-export hub mean that goods, services and financial flows passing through the country attract close attention from EU, US and UK enforcement authorities. The EU's 21st sanctions package, adopted on 23 July 2026 under Regulation (EU) 2026/1848, and the 20th package of 23 April 2026 both contain specific provisions targeting third-country circumvention routes, including enhanced obligations on EU persons dealing with Kazakhstani counterparties.

The digital rouble and RUBx instruments were banned from 24 May 2026, adding a new layer of compliance risk for any entity that settles transactions in or through Russia. For businesses with Kazakhstani operations that also maintain Russian supply-chain or banking relationships, this development requires an immediate review of payment structures and correspondent arrangements.

The best-efforts obligation embedded in EU sanctions regulations requires EU-connected entities – including their subsidiaries, joint ventures and contractual counterparties in third countries – to take active steps to prevent circumvention. A Kazakhstani subsidiary of a European company cannot simply claim ignorance of its parent's obligations.

The Legal Framework Affecting Businesses in Kazakhstan

Kazakhstan has not adopted UN Security Council sanctions designations against Russia, and there is no Kazakhstani autonomous sanctions regime equivalent to that of the EU or UK. However, this does not shield Kazakhstani-registered or Kazakhstani-operating entities from Western sanctions exposure. The relevant instruments include:

• EU sanctions – apply to EU persons and entities, EU-incorporated subsidiaries, transactions settled in euros, and goods of EU origin. The asset freeze provisions and export controls on dual-use and advanced technology goods apply regardless of where the transaction physically takes place.
• US sanctions (OFAC) – primary and secondary sanctions risk applies where USD clearing, US-origin goods or US persons are involved; secondary sanctions exposure is a live concern for Kazakhstani banks with US correspondent relationships.
• UK and Swiss measures – Switzerland adopted provisions parallel to EU measures, including art. 29d, which mirrors the EU's approach to anti-suit protection introduced under Council Regulation (EU) 2026/506 of 23 April 2026.
• Kazakhstani regulatory expectations – the National Bank of Kazakhstan and financial market regulator have issued guidance on AML/CFT controls that intersect with sanctions screening obligations; specific implementation details remain subject to national rules and ongoing regulatory development.

Within the Astana International Financial Centre (AIFC), entities are subject to AIFC Court and AFSA oversight and operate under English-law-based rules. AIFC-registered entities with EU or UK nexus carry full exposure to those regimes and cannot rely on the AIFC's separate legal framework as a shield from Western sanctions obligations.

The Russian Litigation Dimension

A risk that is increasingly relevant for Kazakhstani-connected transactions is the use of Russian courts to override international dispute resolution. Under arts. 248.1 and 248.2 of the Russian Arbitration Procedure Code, Russian counterparties can assert exclusive jurisdiction over sanctions-related disputes in Russian courts and obtain anti-suit injunctions with financial penalties of up to the amount of the original claim. The Russian Constitutional Court, in Ruling No. 999-O of 29 April 2025, confirmed that such measures are not automatic and require demonstration of real obstacles to access to justice – but the threshold remains low in practice, and the Supreme Court's thematic review No. 8/2026, published in June 2026, has consolidated an expansive reading of these powers.

Council Regulation (EU) 2026/506, adopted on 23 April 2026, introduces a direct EU-law response: EU persons subjected to such Russian anti-suit injunctions or exclusive-jurisdiction claims now have a statutory basis for anti-suit protection before EU member-state courts. For businesses operating in Kazakhstan that are simultaneously party to contracts with Russian entities, understanding this cross-border litigation dynamic is an integral part of any sanctions compliance strategy. Our related sanctions and trade practice page for Cyprus sets out how these instruments operate in another jurisdiction with comparable exposure.

If you are currently facing a Russian jurisdictional claim or an anti-suit injunction that affects your Kazakhstani operations, we encourage you to contact us promptly at info@ferrazwhitmore.com or via our contacts page to discuss the position.

Common Compliance Pitfalls in Kazakhstan

Based on the inquiries we receive, the most frequent sources of sanctions exposure for businesses in Kazakhstan include:

• Inadequate sanctions screening at onboarding and on a continuous basis – counterparties' ownership structures change, and a party that was clean at contract signature may be designated months later.
• Goods and technology re-export – exporting EU- or US-origin goods to Kazakhstani buyers without end-use verification, where those goods could be diverted onwards to sanctioned destinations.
• Payment routing – using correspondent banking chains that pass through sanctioned financial institutions, or settling transactions in currencies that create OFAC or EU nexus.
• Contractual gaps – failure to include appropriate sanctions representations, warranties and termination rights in supply, distribution and financing agreements governed by Kazakhstani law or AIFC rules.
• AIFC and IAC proceedings – misunderstanding the relationship between AIFC Court and AFSA oversight on one hand, and Western sanctions obligations on the other, particularly in financing and investment structures.
• Group-level policy gaps – a parent company's global sanctions policy that does not account for the specific risks of the Kazakhstani operating environment, including local regulatory expectations and cross-border trade flows.

How Ferraz & Whitmore Works With Clients in Kazakhstan

Our engagement on a Kazakhstan sanctions compliance matter typically moves through four stages: initial risk mapping, programme design or gap analysis, transaction-specific advice, and ongoing monitoring. We work alongside local Kazakhstani counsel where national law issues arise, and we coordinate with our colleagues advising on corporate structuring through the AIFC and on related corporate law matters in Kazakhstan.

For clients who need a structured overview of the compliance process – from sanctions screening methodology to contractual drafting and incident response – our detailed step-by-step guide is available at Sanctions Compliance Guide: Kazakhstan. That guide covers the procedural specifics; this page focuses on the strategic and legal framework within which we operate.

We do not offer generic template policies. Our advice is calibrated to your sector, your counterparty geography, your ownership structure and the specific sanctions regimes that apply to your transaction or relationship. Where a matter has a cross-border dimension – for example, a Kazakhstani holding company with EU shareholders, Russian suppliers and US-dollar financing – we map the exposure across all applicable regimes before advising on mitigation.

Self-Assessment: Does Your Business Need a Compliance Review?

The following indicators suggest that a structured sanctions compliance review is warranted:

• Your business has direct or indirect trade relationships with Russian or Belarusian counterparties, whether or not those relationships pre-date 2022.
• Your goods, software or technology are of EU, US or UK origin and are sold or distributed in Kazakhstan for onward use or export.
• Your financing, letters of credit or payment flows pass through European or US correspondent banks.
• Your contracts with Russian counterparties contain arbitration clauses that may now be subject to Russian anti-suit proceedings.
• Your group has not updated its compliance policies to reflect the EU's 20th or 21st sanctions packages, or the digital rouble/RUBx prohibitions in force from 24 May 2026.
• Your Kazakhstani entity is a subsidiary or joint venture of an EU, UK or Swiss parent and has not carried out a sanctions gap analysis in the past 12 months.

If any of these apply to your situation, we are available to discuss the position in a preliminary consultation. Please write to us at info@ferrazwhitmore.com or use our contacts page to arrange a call.

Cross-Border Dimension and Multi-Jurisdictional Coordination

Sanctions compliance in Kazakhstan rarely involves only one regulatory regime. A transaction may simultaneously engage EU asset freeze rules, US export controls, AIFC financial regulation and Kazakhstani AML requirements. Our cross-practice team coordinates advice across these regimes, drawing on our experience in European, Central Asian and offshore financial centre contexts.

Where disputes arise – whether before the AIFC Court, the IAC in Almaty, or a European forum – our advice integrates the compliance analysis with the litigation strategy, including the implications of recent EU anti-suit protection measures under Council Regulation (EU) 2026/506 and the ongoing evolution of Russian jurisdictional claims under arts. 248.1 and 248.2 of the Russian APC.

To discuss how these cross-border issues affect your specific structure or transaction, contact our team at info@ferrazwhitmore.com or through our contacts page.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.