Several banks in Central Asia and the South Caucasus have ceased working with Russian money transfer company Unistream in response to a July 20 move by the US Treasury Department to impose sanctions on the Moscow-based firm.

Kazakhstan's Kazpochta (Kazakh Post) and Nurbank announced on July 24 that they had indefinitely frozen all operations with Unistream. RFE/RL reported that the move came amid a dramatic increase in cash flows via Unistream from Russia to Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Armenia and Georgia.

Uzbekistan's People's Bank, Kapital Bank, and Ipoteka Bank, as well as Kyrgyzstan's Kompanyon Bank, Finca Bank, RSK Bank, Kapital Bank, Halyk Bank and Bank of Asia also announced that they had suspended operations linked to Unistream.

In Tajikistan, Oryonbank and Humo Bank also stopped cooperation with Unistream.

In Armenia, Ardshinbank and Converse Bank withdrew from cooperation and two other Armenian banks, Evokabank and Armeconombank, stated that they would permit only the transfer of Russian rubles and Armenian drams via Unistream.

In Georgia, the Bank of Georgia and TBC Bank said they had suspended cooperation with Unistream.

Hundreds of thousands of Russians fled Russia for the former Soviet republics in Central Asia, the South Caucasus and other countries last year after the partial Ukraine war mobilisation was declared in September.

Business boomed at Russia’s Unistream, Contact and Zolotaya Korona (Golden Grown) money transfer companies as a result.

More than $2bn was transferred from Russia to Georgia last year, up 403% y/y. Also in 2022, $775mn was transferred from Russia to Kazakhstan (up 579% y/y) and $3.1bn from Russia to Armenia (higher by 306% y/y).