SANCTIONS & TRADE COMPLIANCE · KAZAKHSTAN
Secondary Sanctions Risk in Kazakhstan
Bond Stone advises Kazakhstan-based companies and foreign investors on secondary sanctions risk — the extraterritorial reach of US OFAC, EU, and UK sanctions that affects Kazakhstan entities even where no direct sanctions apply. Kazakhstani entities have been listed by the US and the EU since 2022, and trade routed through Kazakhstan attracts close scrutiny for Russia sanctions evasion.
Key Framework
What are secondary sanctions
Secondary sanctions, in the usual sense, are measures against non-US persons for dealings with sanctioned parties or sectors, even where the dealing has no US nexus. The EU and UK act mainly by listing third-country persons and through anti-circumvention rules binding their own persons. For Kazakhstan, the main risk arises from Executive Orders 14024 and 14114: the first allows designation of those who materially assist sanctioned parties, and the second targets foreign financial institutions.
OFAC EO 14024 and EO 14114 — Kazakhstan exposure
Executive Order 14024 (April 2021) authorises OFAC to impose blocking sanctions on non-US persons who materially support sanctioned Russian entities. EO 14114 (December 2023) added a new Section 11 to EO 14024, authorising secondary sanctions against foreign financial institutions that facilitate significant transactions involving Russia's military-industrial base or SDN-designated persons. OFAC used this authority in January 2025 to designate a Kyrgyz bank involved in Russia sanctions evasion — establishing a direct regional precedent for Central Asian financial institutions. A Kazakhstan company that trades with, finances, or provides services to an OFAC SDN-listed Russian entity risks being designated under EO 14024 — and losing access to the US financial system and USD correspondent banking.
EU sanctions circumvention
The EU's Russia sanctions include anti-circumvention provisions that prohibit EU persons from participating in activities designed to circumvent EU sanctions. EU companies trading through Kazakhstan should expect to carry out enhanced due diligence on the ultimate destination of goods and services.
UK designations — February 2025
In February 2025, the UK sanctioned entities in Kazakhstan, China, India, Germany, and Turkey identified as enablers and suppliers to the Russian defence sector. UK sanctions against non-UK persons are less broad than OFAC secondary sanctions in their direct reach, but create significant practical risk for entities seeking access to UK financial services, correspondent banking through UK-regulated institutions, or transactions with UK counterparties.
Correspondent banking — practical impact
The most immediate practical risk for Kazakhstan companies is correspondent banking. US-regulated banks acting as correspondents for Kazakhstan banks conduct sanctions screening on all transactions routed through them. A transaction that triggers a match against OFAC SDN, EU, or UK sanctions lists — even a false positive — may result in payment blocking, account review, or de-risking of the Kazakhstan bank relationship. Bond Stone advises on compliance frameworks designed to reduce correspondent banking risk.
Experience
Secondary Sanctions · Kazakhstan · Trade
Sanctions Screening — Trading Company
Advising a Kazakhstan trading company on OFAC and EU sanctions screening of its counterparty relationships — identifying SDN-list matches, assessing secondary sanctions exposure, and implementing a real-time counterparty monitoring protocol.
Secondary Sanctions · Kazakhstan · Banking
Correspondent Bank Query Response
Preparing a sanctions compliance response for a Kazakhstan company subject to a correspondent bank query — documenting KYC/CDD framework, trade flows, and counterparty screening results to demonstrate absence of sanctioned party relationships.
Secondary Sanctions · Kazakhstan · M&A
M&A — Target Sanctions Review
Secondary sanctions due diligence on a Kazakhstan M&A target — reviewing counterparty relationships, beneficial ownership, and trade flows against OFAC SDN, EU Consolidated, and UK sanctions lists, and assessing post-acquisition compliance obligations.
Why Bond Stone
- Kazakhstan market knowledge combined with understanding of the extraterritorial reach of US, EU, and UK sanctions
- Ranked Legal 500 EMEA Top Tier and IFLR1000 Market Leader — Almaty and Astana offices
Discuss your matter
Contact Bond Stone for a confidential discussion about secondary sanctions risk in Kazakhstan.
[email protected]
+7 (701) 729 76 72 — Almaty
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