Remittances hold up as the banks carrying them get riskier

Money still moves from Russia to the Caucasus and Central Asia in large volumes. What has changed is the cost and risk of the banks that move it. Two measures, one American and one European, have turned every bank in the region with a Russian correspondent relationship into a compliance question for its Western counterparts. The remittance data for the first half of 2026 do not show a collapse. They show flows diverging by country, and the divergence tracks how exposed each country’s banks have become.

Two measures that changed the calculation

The first is American. Executive Order 14114 amended the main Russia sanctions order, E.O. 14024, so that the US Treasury can sanction a foreign bank that conducts or facilitates a significant transaction, or provides any service, involving Russia’s military-industrial base. For a small bank in Bishkek or Yerevan, the practical threat is losing its US correspondent accounts, and with them the dollar.

The threat became concrete on 15 January 2025, when the Treasury designated Keremet Bank of Kyrgyzstan under E.O. 14024 as amended by E.O. 14114. The Treasury said that since at least summer 2024 the bank’s officials had worked with Russian officials and the designated Russian lender Promsvyazbank on a scheme under which Keremet would make cross-border transfers on Promsvyazbank’s behalf. It added that the Kyrgyz Ministry of Finance had sold a controlling stake in the bank in 2024 to a firm closely linked to a Russian oligarch. Britain followed in August 2025 by designating Capital Bank of Central Asia, another Kyrgyz lender. Western measures have also targeted the crypto platforms linked to the rouble-backed A7A5 token, which according to the British government moved $9.3 billion on a dedicated exchange in four months.

The second measure is European and broader. The European Commission added Russia to the EU list of high-risk third countries for money laundering and terrorist financing through Delegated Regulation (EU) 2026/46, published on 9 January 2026 and in force from 29 January. Russia’s FATF membership had been suspended, so it could not be listed through the usual FATF route. Every EU bank, payment firm and other obliged entity must now apply enhanced due diligence to any relationship or transaction with a Russian nexus: identifying the beneficial owners, asking the purpose of the business and monitoring it continuously.

How the pressure reaches Yerevan and Bishkek

Neither measure targets Armenian or Central Asian banks as such. They reach them through correspondent banks. A regional bank that clears euros through an EU institution now has to show that institution that its own Russian-linked flows are clean. The cheapest way to show that is to carry fewer of them.

This had started to happen before the EU listing took effect. In December 2025 ArmBanks reported that Armenian banks, among them AMIO Bank and Unibank, had become more cautious about outgoing dollar and euro payments for Russian citizens resident in Russia. The banks were not imposing formal bans. They were suspending payments, asking for more documents, including statements that the parties were not on sanctions lists, and in some cases refusing. The lawyers and consultants quoted linked this to tighter requirements from EU and US correspondent banks. Kyrgyzstan went further: in May 2026 its Ministry of Justice ordered 50 companies to stop operating after state agencies identified sanctions risks, without naming them.

What the remittance data show

If de-risking were broadly cutting the region off from Russian money, household transfers would fall everywhere. They have not. The data for 2026 point in different directions.

• Armenia: the central bank reports net transfers to individuals of $1.38 billion in January–June 2026, against $587.6 million a year earlier. Gross inflows rose to $3.57 billion from $2.76 billion, and $2.42 billion of that came from Russia.
• Uzbekistan: the central bank recorded $3.8 billion of transfers in the first quarter of 2026, 13 per cent more than a year earlier. Russia’s share fell to 72.4 per cent from 77.6 per cent.
• Kyrgyzstan: transfers totalled $1.247 billion in January–May 2026, down 8.8 per cent. Transfers from Russia fell by $180.9 million, or 14.1 per cent, to about $1.1 billion, while those from outside the CIS rose 55.8 per cent to $105.8 million.
• Tajikistan: the most exposed economy has the weakest data. The World Bank put remittances at about 49 per cent of GDP in 2024, up from 39 per cent in 2023, while the National Bank of Tajikistan has not published recent figures, citing technical difficulties.

Some simple arithmetic sharpens the picture. On the published shares, Uzbekistan received roughly $2.75 billion from Russia in the first quarter of 2026, against roughly $2.6 billion a year earlier. That is about 5 per cent more in dollar terms, even as Russia’s share fell. This is our calculation from rounded figures and should be read as approximate. In Kyrgyzstan, Russia’s share fell from about 94 per cent to 88.3 per cent, and the dollar amount fell too.

Why Kyrgyzstan stands apart

Kyrgyzstan is the country where Western authorities have named banks, and it is the one where transfers from Russia fell. That coincidence is suggestive. It is not proof, and the data cannot settle it.

The main limit is definitional. Central banks in the region count transfers to individuals through banks and money-transfer systems. These figures do not separate a migrant’s wages from payments for goods that are routed through personal transfers, or from capital leaving Russia. In a country whose banks have been used for settlement, part of any fall may be settlement traffic leaving rather than migrants sending less home. Reporting on the Uzbek central bank’s review points to labour-market causes for Russia’s falling share: a weaker rouble, dearer work permits and tighter migration enforcement. The central bank also reports that 1.34 million Uzbek citizens held Russian work patents in the first quarter, 8.8 per cent fewer than in the previous quarter. Those causes would also depress Kyrgyz flows. Our view is that the Kyrgyz decline mixes both effects, and that the sanctions share cannot be isolated from public data.

Armenia’s sharp rise in net transfers needs the same caution. It comes after a weak first half of 2025, and a gross inflow of $3.57 billion against net transfers of $1.38 billion shows how much money passes through Armenia rather than staying there. Gross flows of that size are what EU correspondents are now required to question.

What the pattern means

The evidence supports a narrower conclusion than "Russian money is being cut off". Household transfers from Russia remain the largest single source of foreign income for Armenia, Kyrgyzstan, Tajikistan and Uzbekistan, and for now they are largely intact. What is being repriced is the bank in the middle. A transfer that once went through the cheapest channel now goes through whichever bank can still show its Western correspondent that it screens Russian flows. That favours large banks with compliance budgets over small ones, and formal channels over informal ones. It also raises the chance that the next designation in the region will again be a bank, not a trader.

For Tajikistan the risk is sharper because it is hard to measure. An economy whose remittances equal about half of GDP, and whose central bank has stopped publishing current figures, cannot show whether its channels are narrowing until the effect appears in consumption and the exchange rate.

What to watch

Three indicators. First, the second-quarter Uzbek and third-quarter Kyrgyz and Armenian releases: whether Russia’s share in Uzbekistan keeps falling while the dollar amount holds, and whether the Kyrgyz decline deepens as Western pressure on Kyrgyz banks continues. Second, any new designation under E.O. 14114 of a bank in Armenia, Kazakhstan or Uzbekistan, which would show whether the Kyrgyz cases were exceptions or a template. Third, whether the National Bank of Tajikistan resumes publishing transfer data. Until it does, the country most dependent on Russian money is the one whose exposure is hardest to judge.

Sources

• U.S. Department of the Treasury — press release on the designation of Keremet Bank under E.O. 14024 as amended by E.O. 14114, 15 January 2025
• PayTechLaw — Russia on EU high-risk list: consequences for obligated entities, 16 January 2026
• ArmBanks.am — Armenian banks tighten checks on Russian transactions, 22 December 2025
• ArmBanks.am — Net inflow of remittances to Armenia from abroad increased approximately 2.3-fold in the first half of the year, 3 August 2026
• Akchabar — $1.25 billion was transferred to Kyrgyzstan from abroad, $120 million less than a year ago, 4 August 2026
• Times of Central Asia — Russia still dominates Uzbek remittances despite falling share, 3 July 2026
• Times of Central Asia — Kyrgyzstan orders 50 companies to cease activity over sanctions risks, 21 May 2026
• World Bank — Tajikistan Economic Update, press release, 30 July 2025