The Association of Financial Technologies and Innovations of Kazakhstan has filed a lawsuit against the Ministry of Tourism and Sports for disseminating misleading information in justifying the introduction of the Unified Accounting System (UAS).
According to the plaintiffs, under the guise of regulating the bookmaking market, officials are transferring the payment sector, worth over a trillion tenge a year, to Russian entities linked to the sanctioned VTB Bank.
At a press conference in Astana on 3 July, representatives of the fintech industry stated that the UAS is being built on the basis of the Russian TsUPIS (Centre for Accounting and Transfer of Interactive Bets). This system is owned by private entities, including VTB Bank, which is under US and EU sanctions for supporting Russia's military actions against Ukraine.
“Until September 2023, the process of discussing regulatory initiatives was open and honest. But from the beginning of 2024, dialogue ceased. At officials’ meetings, data that bore no relation to reality began to be cited,” stated the head of the Fintech and Innovations Association, Irina Davidenko.
Industry representatives claim that introducing the UAS in its proposed form will lead to a monopolisation of the payments market. Dozens of Kazakh payment organisations and banks that currently serve the bookmaking market will be left without income. At the same time, the new operator will gain access to payments and citizens’ personal data, including those of civil servants and security officials.
“We are filing a lawsuit because we can no longer stay silent. Under the guise of regulation, state bodies are effectively squeezing out the entire payments market and handing it over to a single private company,” explained the director of the legal department of the Association of Payment Organisations, Sandugash Korganbekova.
The fintech association proposed alternative solutions based on domestic technologies without transferring commercial functions to the regulator and without monopolising the market. According to Davidenko, these proposals were initially supported by the Ministry of Tourism itself, but after being “summoned to the Presidential Administration”, the department's position changed.
“It got to the point of absurdity — lobbyists secured a meeting with the Prime Minister in May 2024, and in the presentation on the UAS, they hadn’t even changed the Russian logos,” noted Davidenko.
Experts warn of the risks of secondary sanctions for the Kazakh financial sector due to links with sanctioned entities. Concerns have also been raised about the loss of the country’s information sovereignty.
As part of the legal proceedings, the association is demanding that the dissemination of misleading information be established and that the ministry be obliged to refute the false statements. Furthermore, participants in the press conference called on the government to impose a moratorium on the introduction of the UAS in its current form and to conduct an audit of the involvement of sanctioned entities in the project.