UnionPay cards issued by Gazprombank, a major Russian bank, have been suspended from use in Uzbekistan, according to a report by the Russian news agency TASS. The interruption of services follows the recent sanctions imposed by the U.S. Treasury Department on Gazprombank and more than 50 other Russian financial institutions. The sanctions have resulted in disruptions to UnionPay card services, impacting users in Uzbekistan and limiting access to cash and payment services.
Sanctions and Impact on Gazprombank
The United States has taken a step by adding Gazprombank to its sanctions list, marking the first time the bank’s core activities have been directly affected. Previously, only high-ranking officials of the bank were targeted by sanctions, leaving its operations relatively unaffected. This latest move by the U.S. Treasury Department, however, has led to a direct halt in the ability to process payments through UnionPay cards linked to Gazprombank.
Gazprombank has been a key institution in Russia's financial ecosystem, especially for facilitating ruble payments for gas transactions since 2022. The sanctions reflect ongoing geopolitical tensions and are part of broader efforts by the U.S. to limit Russia's financial activities, especially in relation to its energy exports.
UnionPay Cards and Service Disruptions in Uzbekistan
As of the past week, UnionPay cards issued by Gazprombank were still functional in Uzbekistan, allowing holders to withdraw cash and make payments at various points of sale. However, according to TASS, local banks in Uzbekistan that had been servicing these cards via ATMs and payment terminals have now ceased to do so. Customers of Gazprombank who were able to use UnionPay cards for cash withdrawals or retail transactions on Friday found that these services had been abruptly stopped.
The Central Bank of Uzbekistan confirmed that the suspension was due to actions taken by UnionPay, the payment system itself, and not by the Uzbek regulator or domestic financial institutions. This suggests that the disruptions were a result of UnionPay’s decision to block services to Gazprombank, likely due to the new sanctions targeting the Russian bank.
Despite this, the Central Bank of Uzbekistan did not immediately provide additional details about the situation, and the response from local financial institutions regarding the issue has been slow, with some institutions not yet commenting on the matter.
Gazprombank had warned its clients about potential problems with the use of UnionPay cards abroad starting November 21, ahead of the U.S. sanctions. The bank suggested that customers may experience difficulties in using their UnionPay cards for transactions, particularly in countries outside of Russia. In response to the disruption, the bank recommended that clients use cash for transactions abroad, emphasizing that this would be a more reliable alternative given the uncertain status of card payments.
The freezing of UnionPay services comes amid a wider trend of financial institutions and payment systems curbing their business dealings with Russian banks, particularly following the intensifying international sanctions imposed on Russia over its actions in Ukraine. The sanctions are aimed at cutting off access to global financial markets for Russian institutions and isolating the country’s economy.
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