Bank of Laos Responds to EU Sanctions Against Lao Bank

This Week

The Bank of Laos (BOL) has publicly addressed European Union (EU) sanctions imposed on the Joint Development Bank (JDB), which threatened the bank’s international operations.

The EU announced on 14 May that it would restrict JDB as part of its latest sanctions package targeting Russia. The measures bar EU-based banks from conducting financial transactions with JDB and block the bank’s access to EU clearing and settlement systems.

At a press conference on 30 May, BOL Director General Phanousack Kenevongphachanh said the central bank is closely monitoring the situation and has taken steps to mitigate issues arising from the sanctions. He emphasized that the restrictions apply only within the EU and do not affect transactions with banks in non-EU countries.

To address the issue, BOL has established a dedicated team to coordinate with the EU while guiding JDB in preparing a corrective action plan in line with international standards. 

BOL is also working with international and EU legal and financial experts to review regulatory compliance and strengthen oversight mechanisms.

Phanousack said the Lao banking system remains stable and that the sanctions do not affect other financial institutions operating in Laos. 

He added that customers can continue using JDB’s domestic banking services, including deposits, withdrawals, payments, transfers and loans as normal. For transactions involving EU member states, customers were advised to use international transfer services provided by other domestic banks.

He also confirmed that JDB remains compliant with regulatory capital and liquidity requirements. 

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