Kazatomprom received back $32 million blocked due to US anti-Russian sanctions

The supplier’s account, to which Kazatomprom transferred money, was opened in a Russian bank, which fell under sanctions.
Kazatomprom’s funds blocked due to sanctions against Russian banks were returned to the company, according to the JSC’s financial report for 2022.

Restrictions were imposed on the amount of 14.8 billion tenge paid on March 31, 2022 to a supplier whose account was opened with a Russian bank. This bank was subsequently included in the list of legal entities that were under the sanctions of the Office of Foreign Assets Control of the US Department of the Treasury (OFAC). As noted in Kazatomprom, the correspondent bank erroneously blocked these funds.

“Short-term cash restricted in use included payments in the amount of $32.3 million or 14.812 billion tenge, taking into account foreign exchange income as of December 31, 2022 – 14.956 billion tenge,” the company noted.

On January 13, 2023, OFAC issued a license to return blocked funds. On January 30, 2023, the correspondent bank returned the money in full, including remuneration, compensation paid under the subsoil use contract of JV Akbastau JSC in the amount of 7,310 million tenge for 249 tons of excess uranium produced.

According to the report, Kazatomprom is transferring funds to long-term bank deposits to finance future field restoration activities. In 2022, the total amount of restricted cash on long-term bank deposits amounted to 29.044 mln tenge (2021 – 17.654 mln tenge).

At the same time, Kazatomprom notes that to date, sanctions have not had a significant impact on the company’s activities, although the emerging market uncertainty caused by the conflict between Russia and Ukraine has led to significant volatility in the spot price for uranium, the exchange rate of the national currency and securities quotes companies.

“During the reporting period, the company experienced some difficulties with certain bank payments. As of December 31, 2022, all funds placed with financial institutions included in the sanctions list were withdrawn and transferred to other financial institutions,” Kazatomprom noted.