In Kazakhstan, deputies of the lower house of parliament passed the law that creates conditions for the return of ill-gotten assets to the state.
The document “On return of illegally acquired assets to the state” is now the most debatable and high profile case in Kazakhstan. Its purpose, in simple terms, is to return the stolen assets to the state and use this money to build schools and hospitals.
Too much to be counted
“Illegally withdrawn capitals are composed of what has been illegally purchased for years and decades and then converted into dollars,” said mazhilisman (member of the lower house of parliament) Sergei Ponomarev. “It could be related to mineral resources, real estate, state-owned property. It could be resorts and health centres. It all has been converted into money, withdrawn, and used to buy villas and castles abroad.”
Mazhilisman Irina Smirnova reminded that there are 62,351 orphans in Kazakhstan, who became adults and failed to get apartments.
“We have a million of Kazakhstan-based children living in poverty. We have 25 thousand families with disabled children who wait for their turn to get housing. It was stolen from them. We have nearly two million people who earn 70 thousand tenge (155.6 dollars). Our present and our future have been stolen from us. Schools, hospitals have been stolen. On the other hand, they live a luxury life. And it should be returned to Kazakhstan,” Smirnova said.
In 30 years, according to deputy Yermurat Bapi, oligarchs have stolen 150 billion dollars from Kazakhstanis. Not tenge, but dollars. And they hide what they have stolen skillfully using diverse schemes. Bapi turned to General Prosecutor Berik Asylov and named people of the inner circle of ex-president Nursultan Nazarbayev and asked to investigate their activities. Among the named ones were daughter of Kairat Sharipbayev (according to some media outlets, he is the spouse of Dariga Nazarbayeva, elder daughter of Nursultan Nazarbayev); Galimzhan Yesenov (ex-son-in-law of Akhmetzhan Yesimov, who held high posts in the time of president Nazarbayev); and ex-president’s grandson Nurali Aliyev. The General Prosecutor’s office has not replied to Bapi’s requests so far.
Difficult, yet necessary
According to Sergei Ponomarev, the process of return would be quite difficult, “Because those people who took money out of the country were very rich and influential people, oligarchs, who had skillful lawyers knowing international law. This wealth could be registered not to oligarchs themselves but to third parties, in offshore zones”.
Yermurat Bapi knows it would be difficult to return it. He has been suing for the inheritance of Rakhat Aliyev, former and now deceased son-in-law of Nursultan Nazarbayev, for over 11 years. According to Bapi, Aliyev’s people seized his printing house many years ago. Therefore, the mazhilisman believes that illegal assets had to be returned a long time ago without waiting for the law adoption.
“Those who have created favourable conditions, accompanied, assisted in withdrawing the assets should be held accountable too. It is impossible to withdraw billions without anyone’s assistance. It would be users of mineral resources, holdings, quasi-sector. I have not seen anyone from the private sector getting rich,” said mazhilisman Bolatbek Aliyev. “However, it would take time to sue them.”
Mazhilisman Marat Bashimov feels sure that the money is being withdrawn from the country right now and social justice demands faster response of state authorities.
“We should not be obsessed with prosecutions: it’s a waste of time. The mechanism should be simple. You only need to prove that you have acquired the property legally (to keep assets from being seized – Editor’s note),” said Bashimov.
Mazhilisman Askar Sadykov, vice versa, proposes to initiate criminal cases immediately and claim the money withdrawn. “Of course, there’s another jurisdiction, European or American. It’s quite clear. We need to build other bridges and create other methods of return, we need to hire qualified international lawyers. Most certainly, their property is not in Kazakhstan, and if we turn to another country’s court, we would be simply rejected!”
Closing the “window of opportunities”
Deputies emphasise that “struggle against assets withdrawal from the country is the obligation of the state as it damages the economy, threatens the stability and security of the society, and also hinders the country’s development. What will be the state doing? Here the three main points specified in the draft law.
First, a special government fund will be created to make the process transparent. It will accumulate the money returned. Also, the company to manage such assets will be established. The assets will be used to fund social and economic projects. Minister of Finance Yerulan Zhamaubayev could not say how many persons would work in the fund and how many budget funds would be spent.
Second, two ways to return illegally acquired and withdrawn assets have been specified. The state leaves a “window of opportunities” for oligarchs who want to return the assets voluntarily. Otherwise, enforcement mechanism would apply.
Third, General Prosecutor’s Office has been appointed the body responsible for asset return. A special agency would be established in it.
However, there is a question to those responsible – do they have a right to do it?
Who will catch them?
An interagency commission responsible for the return of illegally withdrawn financial resources was established last June. The working body of the commission is the General Prosecutor’s Office. Media outlets contain very little information about the working commission. Members of the commission had their first, and maybe last, meeting only in June last year. The commission is known to be led by General Prosecutor Berik Asylov. However, the commission was remembered and spoken about again due to Asylov’s deputy, Ulan Baizhanov.
Deputy General Prosecutor Ulan Baizhanov turned to have a villa. Not in the suburb of some settlement of Kazakhstan, but in France. The property is now offered for sale for one million euro. Baizhanov made no secret about it and emphasised that money received from sale of the villa would work in Kazakhstan.
“This is not a villa, but a house with area 200 square metres. I became its legal owner. I have been repaying the mortgage loan for the house for 13 years already and will be for seven more years. The house was purchased to treat my daughter. I have earned money for 20 years of my business and that money has been declared,” Baizhanov said.
Baizhanov started his career in public service, has worked in private sector, and spent much time working in such national companies as Kazakhtelecom and KazMunaiGaz entities. His career has amazingly intersected with Timur Kulibayev, son-in-law of Nursultan Nazarbayev, and dollar billionaire. Baizhanov also worked together with Kulibayev in the National Welfare Fund “Samruk-Kazyna”, KazMunaiGaz and National Olympic Committee. And now Baizhanov will be “uncovering” oligarchs as soon as he sells his villa in France.
This fact could possibly become the reason for indignation of deputy Yermurat Bapi, who raised the question of why the agency responsible for return of capital would be subordinated to the General Prosecutor’s Office, not to the president directly.
Today, Kazakhstan has returned assets worth 780 billion tenge (1.73 billion dollars). According to the General Prosecutor’s Office, this money was returned as part of the criminal action. In other words, no one is in a hurry to return what was stolen. But they will have to. President Tokayev said that the principle “earn here, spend there” has no right to exist.
Main photo: Freepik