Experts of Transparency International – Kazakhstan fund express concern in connection with The lack of progress and transparency around Illicit asset recovery process

PRESS RELEASE

On 12^th January 2022, in connection with the tragedy of Bloody January, Transparency International - Kazakhstan Fund stated that Kazakhstan needs to carry out activities aimed at identifying assets obtained through corrupt transactions in order to recover them back to state ownership. The President of the Republic of Kazakhstan supported this civil society initiative and in February 2022, at an extended meeting of the Government, the President of Kazakhstan ordered to develop a plan for the recovery of assets illegally obtained and taken abroad. On 5^th June, the President of Kazakhstan created an interdepartmental commission of 13 government officials in order to return the financial assets and identify the oligopolistic concentration of economic resources. On 26^th November the President set the Government with task of drafting and submitting a draft Law of the Republic of Kazakhstan to the Majilis of the Parliament of the Republic of Kazakhstan by 31^st March 2023. However, this draft has not yet been published, the Commission is not accountable to the society, and the topic of asset recovery has been classified. The Regulation on the Commission itself belongs to documents of limited access and is not subject for public use. All proposals to law enforcement agencies for cooperation with our organization have not been accepted. The recovery of small assets such as land plots is not a demonstration of a significant economy-wide success, as the scale should be about the recovery of assets comparable to the size of the current annual GDP of Kazakhstan. The lack of transparency around the asset recovery process could lead to a further decline in Kazakhstan's position in the annual Corruption Perceptions Index of Transparency International.

Asset recovery is a fundamental principle of the UN Convention against Corruption, which Kazakhstan acceded to in May 2008. According to the Preamble and Article 13 of the UN Convention against Corruption, the State must cooperate with civil society and non-governmental organizations, but in practice these obligations of cooperation are not observed by the State.

The obligations of Kazakhstan under Article 13 of the Convention are as follows:

1. cooperation with civil society on asset recovery;
2. promotion of the active participation of civil society and non-governmental organizations in the prevention of and combating corruption; and
3. strengthening transparency and facilitating the involvement of the population in decision-making processes and ensuring effective access of the population to information.

In practice, these obligations are also not observed by the State.

According to the experts of Transparency International - Kazakhstan, further secrecy and clannishness in the discussion of the draft law on the asset recovery based on the experience of other countries, carries the following risks:

1. Creating a list of untouchables from various oligarchs, oil and metal giants by withdrawing privatization from the operation of the law on the recovery of assets. Such inviolability of privatization will deprive the entire process of asset recovery from its meaning, since the major assets were received by oligarchs through denationalization, which in turn took place in the form of privatization;
2. Creation of a list of undesirables from among law-abiding entrepreneurs for the collection of bribes by law enforcement agencies through the presence of a register of suspects without clear procedural requirements;
3. Lack of a full-fledged legal and institutional infrastructure for asset recovery with a separate independent body for asset recovery and specialized courts on corruption;
4. Failure to comply with international obligations and principles in the field of asset recovery, including Chapter 5 (Asset Recovery) of the UN Convention Against Corruption, ratified by Kazakhstan on 4 May 2008 and the 10 principles of the Global Asset Recovery Forum;
5. Illegal classification of data on the return of assets, despite the fact that, according to the legislation of Kazakhstan on state secrets, information about violations of human and civil rights and freedoms, violations of the law by state bodies and organizations, and their officials, as well as information about privileges, compensations and benefits provided by the state to individuals and organizations may not be subject to classification;
6. Expropriation by law enforcement officials of private sector property without clear procedural restrictions. Vesting with new additional powers a department of an already existing body with an unclear status and vague responsibility to pre-trial actions will not only paralyze the activities of individual enterprises, but also discourage the growth of the country's economy, since it is highly likely that the uncontrolled activity of law enforcement bodies will turn into a "witch hunt";
7. The emergence of a new group of shadow political influence in the country with political ambitions and with unlimited rights.

Transparency International was established in 1993 as a non-governmental organization dedicated to holding governments accountable and curbing international and national corruption. Transparency International is the world's largest non-governmental international organization to combat corruption and study the level of corruption around the world. The Transparency International movement has accredited branches in 100 countries, including Kazakhstan since 1999. Recovery of illicit assets is a strategic direction of the activity of Transparency International – Kazakhstan Public Fund.