National Bank congratulates journalists on their professional holiday


National Bank urges citizens to be more careful with the som



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National Bank urges citizens to be more careful with the som

Along with the need to increase financial literacy, today we need to educate citizens on careful treatment with the money. Banknotes are often crumpled, torn, leave remnants of food, are often kept in the pockets instead of a purse, used as notebooks. This will reduce the life cycle of the banknotes and increase public spending for the new production of soms. The press-tour was organized on this and many other issues by the National Bank in order to raise awareness of the media on the tpics related to the national currency.

Activities have been carried out within several days. During this time, the National Bank met with more than 30 journalists that represent print and electronic media. The staff of the Cash Management Department of the National Bank informed the participants of press tours on how money is updated in Kyrgyzstan, who and how the dilapidated and damaged soms are destroyed and how new notes come into circulation.

Journalists visited both publicly available as well as closed and specially protected areas of the National Bank, where they have a chance to see the process of receiving, processing, selection and destruction of worn and damaged money. Media representatives visited the cash exchange of worn banknotes and coins to individuals, Central reverse cash and cash conversion, as well as the office where the work with old money is carried out.

As was noted by Mr. Aidarkulov Shamil, the head of the Cash Management Department of the National Bank, the National Bank of the Kyrgyz Republic deals with the destruction of worn and damaged banknotes of soms in line with the existing legislation. Recycling of the old banknotes takes place 3-4 times a year, when enough money is accumulated for destruction. “The average life span of small denomination bills varies from 1 to 3 years, large denomination banknotes from 3 to 5 years. Around 40 to 45 tons of soms are destroyed per year. Soms shredded into pieces of 6mm on the special equipment are briquetted and sent to the factory for processing that manufactures cardboard”- told Mr. Aidarkulov Shamil to the journalists.

In addition to the admissions process and the destruction of old banknotes, members of the press tours participated presentations organized by the National Bank on technologies of creating soms. Mr. Emil Kurmanaliev, a leading specialist of the expert unit of Cash Management Department talked about the issuance of 4 series of the national currency, security features of som and features of genuine soms from counterfeit bills. During the presentation Mr. Emil Kurmanaliev presented statistics on counterfeiting cases in Kyrgyzstan for the past 6 years.

“The level of counterfeiting in the country is reducing with every passing year. For example, if in 2011, 609 counterfeit banknotes of the national currency in the amount of 373.5 thousand soms was revealed, in 2012 - 94 units per 109 000 960 soms, and within 9 months of this year 89 units per 55 000 260 soms was revealed. Currently, the Kyrgyz som among the most protected banknotes in the world. At the same time it should be noted that the liability for counterfeiting has not been canceled. The law severely punishes not only the producers of counterfeit money, but their distributors. In recent years under the Criminal Code of the Kyrgyz Republic “Production, possession or sale of counterfeit money or securities” dozens of people were imprisoned with confiscation of property, - he concluded.

According to information received by the National Bank of the Kyrgyz Republic from the law firm defending the interests of the Government of the Kyrgyz Republic in international arbitration proceedings on claims to the Kyrgyz Republic concerning the nationalization of OJSC “AsiaUniversalBank” (hereinafter OJSC “AUB”), the International Arbitration (Dublin, Ireland) issued final judgment on October 31, 2013 against Mikhail Nadel and American companies IthacaHoldingInc (hereinafter “Ithaca”) and the procedure on their joint lawsuit against the Kyrgyz Republic was discontinued.

According to the decision, “Ithaca” and Mikhail Nadel were charged for legal costs of the Government in the amount of USD 281 095.

Michael Nadel and the company “Ithaca” established in 2011, whose shareholders are US citizens Andrew Mirer, Evgeny Pashkevich, Natalia Odvak, Maya Slutsky, Konstantin Goltsev and Leonid Zharkovsky recoursed to the Kyrgyz Republic to international arbitration in April 2012. They demanded compensation of more than USD 400 million for the nationalization of their shares of OJSC “AUB”. According to them, Mr. Nadel owned approximately 59 % of shares and shareholders of Ithaca owned more than 10% of shares.

In July 2012, the Kyrgyz Republic demanded immediate withdrawal of their claims from the claimants in connection with the procedural irregularities related to the approval of joint filing of lawsuits. However, the claimants initially refused, but as a result of the work carried out by the law firm representing the interests of the Government of the Kyrgyz Republic, they withdrew their demands in September 2012. The Kyrgyz Republic has issued to Mr. Nadel and “Ithaca” a counterclaim for reimbursement of legal expenses of the Government of the Kyrgyz Republic. The international arbitration awarded the claimants to enforce USD 281 095 in favor of the Kyrgyz Republic on October 31, 2013.

Interests of the Kyrgyz Republic in international arbitration on cases of the nationalization of “AUB” is presented by an international law firm Winston & Strawn LLP and Kyrgyz law firm “Consulting on the Rule of Law”. Group of lawyers of Winston & Strawn is headed by Mr. Andrey Yakovlev, a partner in the London office of the company. Leading lawyers of “Consulting on the Rule of Law” are Mr. Anwar Askarov and Mr. Ulan Satarov, the partners of the company.




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