Kazakhstan seeks US help in recovering corruptly transferred funds

ALMATY -- The United States has pledged to help Kazakh authorities recover assets that were obtained through corruption and then transferred abroad.

Officials from the US Department of Justice (DOJ) offered assistance to the Kazakh Prosecutor General's Office when a Kazakh delegation made a working trip to Washington last month.

First Deputy Prosecutor General Timur Tashimbayev led the delegation as it conferred with officials from the DOJ, Federal Bureau of Investigation (FBI) and the World Bank, according to a July 18 statement by the Prosecutor General's Office. The statement did not give the dates of the trip.

The meetings focused on strengthening co-operation on specific criminal cases, exchange of experience in combating cybercrime, signing of extradition treaties and more, the statement said.

At the World Bank, the delegation held talks with officials from the bank's Stolen Asset Recovery (StAR) Initiative, the statement said.

The Kazakh and StAR Initiative officials "discussed supporting Kazakhstan's efforts in recovering criminally obtained assets that were transferred abroad, including to offshore jurisdictions, and in training prosecutors and investigators in the specified form of co-operation", said the statement.

Kazakh President Kassym-Jomart Tokayev on June 5 signed an order to create the Interdepartmental Commission on Countering the Illegal Concentration of Economic Resources with the goal of recovering such assets.

The commission has already repatriated 230 billion KZT ($481.3 million) in illegal assets that were hidden abroad.

"If Washington offers us help in recovering criminal assets, that's a very good thing for us," said Almaty-based lawyer Askar Kaldybayev.

"The efficiency of the American law enforcement agencies, their considerable professionalism, and their relationships with governments and government agencies of many countries increase our chances of recovering these funds," he said.

The United States also has extensive experience and a broad arsenal of resources in this area, which will raise the value of the partnership exponentially, Kaldybayev said.

Under US law, "the US government may require holders of Kazakh assets that have been transferred to the United States and have aroused any suspicion to hand over information on the source of the funds", he said.

"It may also freeze these funds until all the circumstances are ascertained. If an investigation finds that the assets are criminal, the United States may help recover them because Kazakhstan and the United States have an intergovernmental agreement on combating money laundering," he added.

A key partner

Anger over corruption was one factor that spurred widespread protests in Kazakhstan in January.

Illegally amassed wealth "was a particular concern during protests", said Transparency International, a global anti-corruption watchdog, in its annual corruption ranking published in February.

Kazakhstan ranked 102nd out of 180 countries on the index, tied with Gambia and Sri Lanka. Denmark, Finland and New Zealand tied for first, while South Sudan ranked 180th.

More than $500 billion has been illegally transferred out of Kazakhstan since the country gained independence in 1991, said Ualikhan Kaisarov, an economist and former senator, citing data from four years ago.

"I know that when I was still a senator, $4 billion to $5 billion was transferred out of Kazakhstan per month," Kaisarov said in an interview with Inbusiness.kz published in early July. "The $500 billion figure is most likely close to reality."

Kazakhstan aspires to enter the top 30 developed countries of the world, grow its gross domestic product (GDP), and develop small and medium-sized businesses, said Aigul Solovyeva of Nur-Sultan, a former member of parliament.

Taking into account these goals, Kazakhstan needs to focus on building relationships with countries that have achieved high democratic standards, she said.

"If the United States doesn't fit that description, who does? Also, we don't have access to American banks, but in the United States, law enforcement may ask them for information about Kazakh assets," Solovyeva said. "We desperately need a partner like that."

The United States shows the world the principles of transparency, democracy and the primacy of the will of the people, she said.

"It understands that we want to change so that the people trust their own government and authorities."

Upholding the law

There are currently two ways to recover assets acquired illicitly in Kazakhstan and then transferred abroad, according to Andrey Chebotarev, an independent financial analyst in Nur-Sultan.

"The easy way is when the holder of the assets either voluntarily or under coercion hands the funds over to the state," he said. "The hard way is by going through the courts -- meaning that you need to prove that the funds were acquired illegally and transferred out of the country."

The United States embraces the rule of law, which means that lawsuits and trials in the United States relating to Kazakhstan can take years, Chebotarev noted, referring to the need for thoroughness in serious investigations.

"On the other hand, the FBI's involvement can speed up the process. If the FBI sees that any Kazakh assets were acquired through criminal activity, it will open a case sooner," he said.