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AFSA suspends the Licence of GB Finance Ltd.

Опубликовано: November 14, 2022 в 7:52 am

Категории: News

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The Astana Financial Services Authority (“AFSA”) has suspended the Licence of GB Finance Ltd. after the firm had breached multiple AIFC Rules that are critical for companies to be able to carry on regulated activities.

In particular, the company has breached a range of rules including:

  • requirements of the AIFC Rules on Currency Regulation;
  • minimum levels of capital adequacy ratios;
  • limits on lending to related parties;
  • limits on large (prudential) exposures to counterparties;
  • failure to notify the AFSA of breaches or potential breaches of prudential requirements, and how it is proposed to remedy them;
  • failure to advise the AFSA of certain acquisitions having a significant impact on the firm’s risk profile and resources; and
  • multiple breaches of management oversight and control over the firm’s activities indicative of a lack of understanding or appreciation of regulatory requirements and obligations.

The AFSA’s mission is to establish an environment that delivers fair and transparent financial and capital markets, in which individuals and institutions act with integrity and maintain the highest standards of corporate governance and international standards on which the AFSA and the AIFC is based.

Gareth Ling, Deputy CEO of the AFSA said: “GB Finance Ltd., its management, and its majority controller, have demonstrated little comprehension of regulatory expectations and requirements, whilst embarking on numerous transactions with its related parties in a manner that has lacked acceptable governance and effective compliance controls.

The AFSA’s highest priority is the protection of consumers’ rights and well-being, as well as the integrity of the financial system in the AIFC. Firms that do not appreciate this, or choose to disregard this, are not firms that the AFSA or the AIFC welcome, and the AFSA takes no hesitation in dealing with them expeditiously”.

 

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,600 firms from 67 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others.

www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus.

www.aifc.kz

AFSA’s World Investor Week “Sustaining Resilience Investing” reaches 5,000 participants with messages of financial literacy

Опубликовано: October 10, 2022 в 12:00 am

Категории: News

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Astana Financial Services Authority (AFSA) has closed World Investor Week (WIW) themed “Sustaining Resilience Investing” by engaging around 5,000 participants from 20 countries and holding 30 events featuring over 100 speakers. 

A series of forums, including ESG (Environmental, Social, and Corporate Governance) Investment Forum, Islamic Finance Forum, New Financial Instruments Forum, Digital Assets Investment Forum and others were held within the framework of the event. AFSA raised topics of investor resilience, fraud prevention, sustainable finance, crypto literacy and smart investing. The Astana Financial Services Authority works to establish an environment that delivers fair and transparent financial and capital markets by ensuring registration, authorisation, supervision and overall regulation of firms. In addition, AFSA promotes and provides the necessary framework for protection of rights of financial services consumers.

One of the main events at the ESG Investment Forum was a panel session organised by the AIFC Green Finance Centre “National ESG Club as a platform for sustainable business”. The participants exchanged views on the ongoing work to promote and implement the principles of sustainable development and discussed such trending topics as the development of a Strategy to achieve carbon neutrality in Kazakhstan until 2060.

World Investor Week is held annually under the auspices of IOSCO, the International Organisation of Securities Commissions. Its main goal is to encourage a behaviour whereby people have more understanding of financial risks, embrace financial education and are able to invest smart.

“World Investor Week is one of the key annual events in the AIFC and AFSA is committed to continue promoting investor education and protection. Throughout the events we have emphasized the key messages of the International Organisation of Securities Commissions which are the basis for financial literacy, such as  avoiding “get rich quick” and “can’t lose” schemes; not investing based solely on a celebrity endorsement; verifying that an investment company is licensed; understanding that risk exists in all investments; overcoming  financial shocks with an adequate emergency fund; conducting research before investing to protect against financial scams etc.,” – said AFSA Chief Executive Officer Nurkhat Kushimov.

AFSA was the organizer of the World Investor Week. Co-organizers and contributors included the AIFC Authority, AIFC Court and International Arbitration Centre, Green Finance Centre, Astana International Exchange, Bureau for Continuing Professional Development, Tech Hub, and AIFC Business Connect.

 

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,500 firms from 65 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

AFSA hosts World Investor Week themed “Sustaining Resilience Investing”

Опубликовано: October 3, 2022 в 12:00 am

Категории: News

Тэги:

3-7 October 2022 Astana Financial Services Authority (AFSA) is hosting its fifth annual World Investor Week (WIW) themed “Sustaining Resilience Investing”. 

Thematically, the event is devoted to raising awareness on investor resilience, investor education and protection, crypto assets, sustainable finance, Islamic finance, prevention of frauds and scams.

Several thematic forums, such as ESG (Environmental, Social, and Corporate Governance) Investments Forum, New Financial Instruments Forum, Digital Assets Investments Forum, Islamic Finance Forum, Financial Literacy Forum and others will be held on margins of the WIW.

World Investor Week is held annually by regulators in 100 countries all over the world under the auspices of the International Organization of Securities Commissions (IOSCO) – an international organisation that unites world’s securities regulators. IOSCO members regulate more than 95% of the world’s securities market in more than 115 jurisdictions. Hosting of the World Investors Week reflects AIFC’s adherence to the IOSCO goals and standards on consumer protection in financial services.

“Resilient and smart investors are the backbone of a healthy economy because they understand risks, can withstand financial shocks and promote sustainable businesses. As such, investor protection plays a critical role in AFSA’s work to establish an environment that delivers fair and transparent financial and capital markets, in which individuals and institutions act with integrity,” – said AFSA Chief Executive Officer Nurkhat Kushimov.

AFSA is the organiser of the World Investor Week. Co-organisers and contributors include the AIFC Authority, AIFC Court and International Arbitration Centre, AIFC Green Finance Centre, Astana International Exchange, Bureau for Continuing Professional Development, Tech Hub, and AIFC Business Connect.

 

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,500 firms from 65 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

AFSA suspends the License of GB Insurance Ltd

Опубликовано: September 29, 2022 в 12:00 am

Категории: News

Тэги:

The Astana Financial Services Authority (the “AFSA”) has suspended the License of GB Insurance Ltd with immediate effect after the Firm had failed to satisfy the pre-conditions on which its conditional license from the AFSA had been granted.

In particular, the company disregarded or ignored the pre-conditions that had been imposed upon it by the AFSA and, in so doing:

  • chose to commence live operations without the AFSA’s agreement or knowledge;
  • failed to fulfil its mandatory pre-conditions before undertaking the activities of an insurance company;
  • failed to have in place actuarial policies, procedures, systems and controls that had been developed by the company to the AFSA’s satisfaction;
  • allowed persons who were not approved by the AFSA to perform the Controlled Functions of Insurance Risk Manager, Internal Audit Manager and Approver Actuary; and
  • consequently undertook the writing of insurance risks whist failing to have in place the appropriate arrangements and people to undertake such activities.

The AFSA’s mission is to establish an environment that delivers fair and transparent financial and capital markets, in which individuals and institutions act with integrity and maintain the highest standards of corporate governance and international standards on which the AFSA and the AIFC is based.

Gareth Ling, Deputy CEO of the AFSA said, “It is imperative that firms granted conditional licenses by the AFSA must fulfil those conditions to the AFSA’s full satisfaction before undertaking those activities for which they have sought authorisation. The fact that GB Insurance Ltd completely disregarded critical pre-conditions of its license was an act of recklessness and irresponsibility and cannot be tolerated under any circumstances”.

Protection of consumer rights is one of the AFSA’s highest priorities. The AFSA will not permit companies to operate that fail to comply with the core requirements set by the regulator where such failures may expose consumers to unwarranted risks.

As a Class 3 Captive Insurer, the firm’s business was limited to insuring risks of entities owned by the same persons as the owners of GB Insurance Ltd. Nevertheless, the firm has been ordered, amongst other actions, to wind-down or run-off its existing insurance contracts.

 

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,500 firms from 65 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

 

AFSA participates in annual Budapest Eurasian Forum

Опубликовано: September 20, 2022 в 12:00 am

Категории: News

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19-20 September 2022, Budapest (Hungary) hosted the Annual Budapest Eurasian Forum, which is an international project of the Central Bank of Hungary. The event is held annually with the involvement of 15 thousand participants, including top executives of major banks, politicians, well-known representatives of academia and international organisations. This year, the line-up of speakers included the Governor of the Bank of Thailand, Director of Ban Ki-moon Foundation, Director of the Center for Sustainability at Columbia University and others.

Chief Executive Officer of AFSA, the Astana Financial Services Authority of the Astana International Financial Center (AIFC), Nurkhat Kushimov took part in the forum as a speaker at the panel session “FINANCE: Ingredients of success in the financial sector: How to strengthen new financial hubs in Eurasia?”. The session discussed the creation of a sustainable financial infrastructure and an attractive investment environment, the role of financial innovation and regulatory sandboxes that ensure success in the financial sector, as well as international competition for investment. Critical issues for building effective startups and a FinTech ecosystem were also addressed during the discussion.

AFSA is an independent regulator of the Astana International Financial Centre and a unique body that regulates financial, market and ancillary services provided within the AIFC. AFSA’s strong regulatory framework regulating innovation in FinTech, green finance and Islamic banking in addition to traditional finance has helped the AIFC establish itself as a leading regional platform in Eurasia. AFSA is an active member of the world’s key international standard-setting organisations. For example, last year AFSA chaired the Group of Banking Supervisors in Central and Eastern Europe (BSCEE). The fact that the AIFC has chaired the BSCEE group is significant in that Kazakhstan hosted an event of this magnitude for the first time in Central Asia.

“Currently there are over 1,500 companies from 65 countries of the world in the AIFC. The geographical coverage of participants continues to expand. The AIFC companies cover such major global players as China, the USA, the UK, Singapore, Germany, Finland and many others. Naturally, for us as a financial regulator the quality of companies is a priority. High standards of financial conduct, best international practices and recognition of the world’s leading financial institutions mean that participation in the AIFC is a sign of quality,” – said AFSA Chief Executive Officer Nurkhat Kushimov.

 

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,500 firms from 65 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz 

AIFC committed to world standards in combating money laundering, the financing of terrorism

Опубликовано: September 13, 2022 в 12:00 am

Категории: News

Тэги:

A meeting of the Inter-departmental Working Group on the issues of mutual evaluation of the national system for anti-money laundering and combatting the financing of terrorism (AML/CFT) of the Republic of Kazakhstan has taken place today. The meeting took place at the Astana International Financial Center (AIFC) and was chaired by First Deputy Head of the Presidential Administration of the Republic of Kazakhstan Timur Suleimenov.

The meeting is part of the planned activities to assess compliance of the regime of the Republic of Kazakhstan and the AIFC with international AML/CFT standards within the framework of the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG).

During 2021–2022, with the direct participation of the Financial Monitoring Agency of the Republic of Kazakhstan, the AIFC financial regulator (AFSA) has implemented the main measures aimed at strengthening the AML/CFT regime and increasing the level of technical compliance with the requirements of the Recommendations of the Financial Action Task Force (FATF).

AFSA applies a comprehensive risk-based approach to effectively allocate resources for the implementation of measures in accordance with the FATF Recommendations. The AIFC regime in the field of AML/CFT is provided by a multi-level system of supervision and control.

Risk-based supervision allows for the application of preventive measures, strengthening transparency and accessibility of information on the beneficial ownership of legal persons and entities, and ensuring international cooperation. AFSA uses advanced blockchain solutions for data and transaction analytics, as well as international databases for keeping records of individuals and legal entities associated with money laundering, terrorist financing and other financial crimes.

“We highly appreciate the EAG’s efforts to assist member states in the implementation of the 40 FATF Recommendations. The results of typological research allow us to identify the most high-risk areas and sectors and build an effective risk management methodology. As a result of the work carried out to date, AML/CFT requirements are reflected and detailed in more than 80 AIFC Acts that regulate various areas of our participants’ activities, – AIFC Governor Kairat Kelimbetov noted in his report. – According to the AML/CFT Law of the Republic of Kazakhstan, AIFC participants are subjects of financial monitoring, and AFSA as our Financial Regulator is designated as the body that controls their compliance with the current AIFC law on AML/CFT issues.”

It is worth noting that in August this year, the Organisation for Economic Cooperation and Development (OECD) published a report in which it recognised the compliance of the AIFC tax regime with global tax transparency standards. This recognition is an important step in demonstrating the AIFC’s compliance with global standards of transparency, including tax transparency.

 

Reference:

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,500 firms from 65 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz 

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

 

International Swaps and Derivatives Association publishes an Informal Country Update, marking first step towards recognition of AIFC as “netting-friendly jurisdiction”

Опубликовано: August 31, 2022 в 8:19 am

Категории: News

Тэги:

The International Swaps and Derivatives Association (ISDA) has published an Informal Country Update on the enforceability of close-out netting under the Acting Law of the Astana International Financial Centre (AIFC) issued by international law firm, Dentons. The publication of the Informal Country Update marks a significant milestone in the Astana Financial Services Authority’s work with ISDA that commenced in 2021 and marks the completion of the first step towards the full recognition of the AIFC as a ‘netting-friendly jurisdiction’.

The publication of the Informal Country Update is also an important contribution to Kazakhstan’s financial market infrastructure as the update will provide insights for globally active firms that want to carry out their financial transactions in the local market.

ISDA is one of the world’s largest global financial trade associations and the Informal Country Update covers a number of legal issues relevant to the trading of derivatives, including the enforceability of close-out netting.

Netting entails offsetting the value of multiple payments due to be exchanged between two or more parties. It can be used to determine which party is owed remuneration in a multiparty agreement. Netting may be used in trade when parties offset one position with an opposing one, to balance out losses from one with gains in another.

Having certainty on the enforceability of ‘close-out netting’, one of the types of netting, is one of the key factors that determines the location of the market participants’ trading activities.  This proposed update will create greater market interest in exploring the AIFC jurisdiction for local derivatives market and create conditions for its prosperity.

Close-out netting provides a means of mitigating credit risks associated with over-the-counter derivatives and is widely used in the financial market by private sector entities, in particular banks and private non-financial institutions. To date, ISDA recognises more than 80 jurisdictions as ‘netting-friendly’ and the AIFC aims to seek ISDA recognition for its close-out netting regime as the next step in future.

Close-out netting is crucial in promoting financial stability and the development of a robust, liquid, and efficient derivatives market as it enables derivatives participants to protect against adverse market changes following default of a counterparty. In the absence of certainty regarding close-out netting, financial institutions may face higher transaction costs and increased liquidity and regulatory capital requirements.

 

Reference:

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,500 firms from 64 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others.

www.afsa.kz 

 

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

 

Contact information:

Dina Teltayeva

+7 701 765 40 10

[email protected]

Binance obtains In-Principle Approval from AFSA to operate a Digital Asset Trading Facility and Provide Custody in the Astana International Financial Centre

Опубликовано: August 15, 2022 в 12:00 am

Категории: News

Тэги:

Binance, the world’s largest crypto exchange, has received its In-Principle Approval from the Astana Financial Services Authority (AFSA) to operate a Digital Asset Trading Facility and Provide Custody in the Astana International Financial Centre (AIFC). AIFC is the first financial centre in the Commonwealth of Independent States (CIS) to have started working with Binance. 

AFSA is an independent regulator of the Astana International Financial Centre and a unique body that regulates activities relating to digital assets in Kazakhstan and the wider region of the CIS. AFSA’s robust regulatory framework governing FinTech has helped the AIFC to establish itself as the leading regional platform for the development of services involving digital assets.

“Large investors seeking new markets need clear-cut and well-managed rules as well as high standards of regulatory practice. When a regulator meets these requirements, it creates collaboration based on trust and an ecosystem where players can work safely and efficiently. We believe that Binance’s work will further develop this vibrant ecosystem of digital assets industry locally and regionally,” said Nurkhat Kushimov, Chief Executive Officer of AFSA.

AFSA’s FinTech regulations are designed to motivate innovative business solutions while balancing them with a fine regulatory framework to create an environment that delivers fair and transparent financial and capital markets, in which individuals and institutions act with integrity.

Binance, with its wealth of experience, technologies and opportunities will contribute to the development of the digital assets market in Kazakhstan and is going to create larger impetus for further establishing the country as the region’s cryptohub.

“Kazakhstan has shown to be a pioneer in Central Asia crypto adoption and regulation,” said Changpeng Zhao (CZ), founder and CEO of Binance. “This further signifies Binance’s commitment to being a compliance-first exchange and providing products and services in a safe and well-regulated environment across the globe.”

Gleb Kostarev, Regional Head of Asia at Binance, said: “This is a landmark achievement for Binance in Kazakhstan. We are grateful to the Astana International Financial Centre for their support and vision in granting Binance Kazakhstan this in-principle license approval”.

In-Principle Approval is one of the steps to obtain a license in the AIFC. Upon successful finalization of its licensing application, Binance will be able to provide its services as an operator of a Digital Asset Trading Facility and Provider of Custody in the Astana International Financial Centre.

 

Reference: 

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,400 firms from 64 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz

Binance is the world’s leading cryptocurrency infrastructure provider with a range of financial products, including the largest digital asset exchange by volume. Trusted by millions of people around the world, Binance is designed to enhance the freedom of money for users and offers an unrivaled portfolio of crypto-currency products and offerings, including trading and finance, education, data and research, philanthropy, investment and incubation, decentralization, and more. For more information visit https://www.binance.com 

Organisation for Economic Co-operation and Development recognises that the tax regime of the Astana International Financial Center complies with global standards of tax transparency  

Опубликовано: August 3, 2022 в 12:00 am

Категории: News

Тэги:

The Organisation for Economic Co-operation and Development (OECD) has released a report declaring that the Astana International Financial Centre (AIFC’s) tax regime is compliant with global standards of tax transparency. This recognition is an important step in demonstrating the AIFC’s compliance with global tax transparency standards.

According to OECD, Base Erosion and Profit Shifting (BEPS) practices cost countries 100–240 billion US dollars in lost revenues annually, which is the equivalent of 4-10% of the global corporate income tax revenues. This is the result of the abuse of gaps and inconsistencies between the tax systems of different countries.

To address this problem, in 2016 the OECD jointly with the G20 created the Inclusive Framework on Base Erosion and Profit Shifting. Today within the Framework there are over 135 countries and jurisdictions, implementing 15 actions to combat tax evasion, improve consistency of international tax rules, ensure a more transparent tax environment and address tax problems arising from the digitalisation of economy.

The OECD recommended that the AIFC implement “Substantial Presence” requirements for Kazakhstan to comply with BEPS. In this regard, in 2021 the Astana Financial Services Authority in agreement with the Ministry of Finance of the Republic of Kazakhstan adopted the Rules on Substantial Presence of the of AIFC participants applying tax exemptions for the payment of corporate income tax, value added tax. According to the Rules, AIFC participants enjoying tax benefits for the payment of corporate income tax and value added tax must confirm their presence in the AIFC. This is corroborated by meeting the requirements for core income generating activities in the AIFC, as well as ensuring amount of expenses and full-time employees are commensurate to the scope of activities.

 

Reference:

The Astana Financial Services Authority (AFSA) is the independent regulator of the Astana International Financial Centre (AIFC), which is established in accordance with the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” for the purposes of regulating financial services and related activities in the AIFC. AFSA administers the AIFC Regulations and Rules and is responsible for the authorisation, registration, recognition and supervision of financial firms and market institutions in the AIFC.

Over 1,400 firms from 64 countries are registered in the AIFC. These firms provide banking, insurance, investment, professional and other services. The range of financial services offered at the AIFC is comparable to the list of services available in long-established financial centers of the world, such as London, Hong Kong, Singapore, Dubai and others. www.afsa.kz 

The Astana International Financial Centre (AIFC) is an independent jurisdiction that began operations in 2018. In accordance with the 2025 Development Strategy, the key task of the AIFC is to consolidate as a universal platform connecting the countries of the EAEU, Central Asia and South Caucasus. www.aifc.kz