Big Money Hunt In Kazakhstan – OpEd

Although Kazakhstan ranks moderately lower on thecorruption perception index (CPI) among other fellow CIS countries like Georgia, Armenia or Belarus, the sheer amount of illegal capital that left the country in the last 30 years since its independence is estimated to be anastonishing $150 to 180 billion. Following mass unrest in January 2022 the new government desperately seeks capital to reform economy and returning thismoney hasnow become its primary target.

According to Amnesty International Corruption Perception Index (CPI) Kazakhstan reached its historichigh of38 points back in 2020 ranking among other countries like Brazil, Montenegro, Serbia or Sri Lanka, but since then slipped few points down. But for Kazakhs, corruption has always been the largest social irritantduring the 30-year rule of the previous president Nursultan Nazarbayev, when his family members have become official billionaires.

According to Forbes, Nazarbayev’s daughter Dinara and her husband Timur owned over $3.1 billion each in shares in the country’s largest bank, Halyq bank. The president’s other daughters and his brother are among the richest in the country owning vast assets and businesses across the country’s real estate and otherindustries. According to Reuters, Nursultan Nazarbayev’s eldest daughter Dariga owned property worth over 150 million pounds in London alone, including famous “Sherlock Holmes”’ house on Baker Street.

After presidential powers were transferred from Nursultan Nazarbayev to Kassym-Jomart Tokayev in 2019 things started changing, especially speeding up following massive social unrests in January 2022. Suddenly, all-possible life for the most influential Kazakh oligarchs, who were either Nazarbayev’s family members or closely linked to it, lost ground and influence. Thus, prominent oligarch Kairat Boranbayev was arrested in March 2022 and jailed for 8 years, which experts treated as a clear signal for the start of a serious anti-corruption campaign. Further, in February 2023, president Tokayev abolished the “Law on the First President of Kazakhstan”, which was adopted back in 2000 and provided Nursultan Nazarbayev’s personal life-long immunity from any legal persecution.

In April 2023 president Tokaev appointed former Chief of the Anti-Corruption Committee Mr Bektenov as head of his administration office – one of the most powerful executive positions. In May 2023 Parliament adopted a new law “On Returning Illegally Acquired Assets back to the State”, which came into effect last week. 

The new law, among other measures provides a legalmechanism to denounce theprivate status of certain assets, which were acquired or privatized at presumably unfairly low prices. A specially established government commission will investigate all former government officials who own(personally or under relatives’ names) capital worthover $100 million and in case found, will initiate proceedings to return them to the state in case no legitimate justification for the source of the capitalwill be provided. Interestingly the law also provides anexemption from prosecution in case the assets and capital arereturned voluntarily. All retuned capital will be accumulated in a new special government fund.

In June 2023 the government has already announced the return of a private Nazarbayev Fund with assets worth over 7 billion under state control, which were transferred two years ago from Kazakhstan under US jurisdiction.  The Government treats this as a symbolic early success, but the main battles, which surely will be legally difficult and lengthy, are clearly stillahead. 

Considering the amount of capital at stake, the efforts to bring illegal money back makes it clearly worth the effort. Even if the Government manages to get half of the estimated $150-180 billions, which were drained and hidden in offshore accounts, this will be more than the GDP of a neighboring country like Uzbekistan or 10 times that of GDP of Kyrgyzstan.