Kazakhstan Justice - The Times Of Central Asia

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Exclusive: Breaking Down Kazakhstan’s Claims Against International Oil Consortiums

The total amount of claims brought against the consortiums, North Caspian Operating Company (NCOC) and Karachaganak Petroleum Operating (KPO) is the largest in the history of Kazakhstan. In March 2023, PSA LLP, the authorized state institution overseeing these projects, brought forward claims in international arbitration in relation to Kashagan and Karachaganak for $13.5 billion and $3.0 billion, respectively. In addition, the Atyrau Region environmental regulator filed a claim for $5.1 billion against the NCOC consortium for storing too much sulfur on site, discharging wastewater without treatment, etc. The claims of PSA LLP cover the period 2010-19 and relate to the oil consortiums’ costs for carrying out large projects, as well as tenders and insufficient work completed. The shareholders of NCOC, which is developing the offshore Kashagan Field, include: KMG Kashagan (16.877% stake), Shell Kazakhstan Development (16.807%), Total EP Kazakhstan (16.807%), Agip Caspian Sea (16.807%), ExxonMobil Kazakhstan (16.807%), CNPC Kazakhstan (8.333%) and INPEX North Caspian Sea (7.563%). Their total investments over the period have not been disclosed, but, according to various estimates, exceed $60 billion – meaning the state is currently calling into question about 23% of all costs. The KPO consortium is Shell (29.25%), Eni (29.25%), Chevron (18.0%), Russia’s Lukoil (13.5%) and Kazakhstan’s state-owned KazMunayGas (10.0%). Investments in this oil and gas condensate field are estimated at $27 billion, hence the filed claim is significantly smaller both in absolute terms and as a percentage of costs, standing at about 11%. A production sharing agreement was signed in 1997 for Karachaganak and in 1998 for Kashagan, with the contracts to be in effect for 40 years. In 2022, the sole participant in PSA LLP became Samruk-Kazyna Trust Corporate Fund, part of the state holding National Welfare Fund Samruk-Kazyna, while Kazakhstan’s Ministry of Energy is currently entrusted to run PSA LLP. NCOC and KPO dominate the industry through control of three fields. Tengiz, Kashagan and Karachaganak are the largest oil and gas fields in Kazakhstan. The country’s oil and gas condensate production in 2023 amounted to 89.9 million tons (about 1.8 million barrels per day), with the share of the “three whales” – as these projects are called – accounting for 67% of oil production: Tengiz with 28.9 million tons, down 1% versus the 2022 level; Kashagan with 18.8 million tons, a 48% increase; Karachaganak with 12.1 million tons, up 7% year-on-year. The stabilization contract for Tengiz was one of the first signed at the dawn of Kazakhstan’s independence in 1993, also for a term of 40 years, meaning it should be the first to expire in 2033. The shareholders of the Tengizchevroil JV are Chevron (50%), ExxonMobil (25%), KazMunayGas (20%) and Lukoil (5%). After completion of its FGP (Future Growth Project), Tengiz should produce about 900,000 barrels per day, a significant figure even by world standards. It is surprising that Kazakhstan has not yet raised or voiced any claims against TCO, even though the FGP budget has swelled from an initial $12 billion to $25 billion – due to the addition...

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Kazakhstan to Report to UN on Events of January 2022 Unrest

Kazakhstan will report to the United Nations (UN) Committee against Torture on measures taken after the events of bloody January (Qantar) 2022. This is according to the Deputy Chairwoman of the International Bureau for Human Rights, Roza Akylbekova, who added that information on urgent recommendations, which primarily concern Qantar, should be provided no later than May 12th, 2024 "This is information about what happened, how many people were affected, and, of course, about deaths in closed institutions and how Kazakhstan is investigating them," Akylbekova said at a news conference at the office of the Kazakhstan International Bureau for Human Rights and the Rule of Law. In addition, according to the human rights activist, the Ministry of Defense of Kazakhstan will have to prepare information on the deaths of conscripts. It has been 25 years since Kazakhstan joined the UN Convention against Torture, since which time the Coalition of NGOs of Kazakhstan against Torture and the National Preventive Mechanism for the Prevention of Torture have been established created. Furthermore, Kazakhstan added an article on torture to the criminal code and opened up a path for individual appeals regarding torture directly to the UN Committee. At the same time, however, torture remains a pressing problem in the country. According to the Kazakhstan International Bureau for Human Rights and the Rule of Law, 200-250 people apply to the Coalition of NGOs against Torture every year. In 2022, 190 appeals were received in connection with the January events, and another 88 episodes that had no connection to the mass riots of that year. Since Qantar, the number of complaints has not fallen, with 283 appeals in 2023, during which year over 20 systemic recommendations were issued to Kazakhstan. Earlier this year, the European Union (EU) funded a three-year project by Kazakhstani human rights defenders that aims to eradicate torture. As part of this project, the Kazakhstan NGO Coalition against Torture and the Prison Reform International (PRI) office will analyze individual cases of criminal prosecution for torture which do not reach trial. However, these cases are difficult to identify and prosecute. "In Kazakhstan such crime as torture is adjacent to other articles of the Criminal Code: in addition to 'torture,' the concepts of 'ill-treatment' and 'abuse of power' are used. Therefore, the official statistics on those prosecuted for 'torture' (Article 146) do not give an understanding of how many cases are actually hidden behind the lighter articles. At the same time, Article 146 itself has been divided into two parts: 'torture,' which will be investigated by the prosecutor's office, and 'cruel and inhuman treatment,' which is left to the Interior Ministry, whose employees are most often the beneficiaries of torture," the press service of the Kazakhstan International Bureau for Human Rights and Rule of Law reported. The UN Committee against Torture was established in January 1987. It consists of 10 independent experts, who currently represent the United States, Turkey, China, Japan, Russia, France, Morocco, Moldova, Latvia, and Mexico. They monitor the implementation of the Convention...

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Kazakhstan Uses Income Declaration to Fight the Shadow Economy

Kazakhstan's third stage of universal income declaration is underway. As part of the current stage, declarations must be submitted by entrepreneurs, company founders and directors, and their spouses. In 2025 yet another new stage of declarations, will commence which will oblige all adult citizens to submit declarations. Currently, many entrepreneurs and small business owners use mobile transfers, which are intended for personal purposes. Such actions are illegal and violate the guidelines of the Entrepreneurial Code - Article 27, which stipulates that an entrepreneur may only use business accounts when carrying out commercial activities. It's specified in the law that mobile transfers and payments made for personal purposes are not taxable. Regarding taxation of individuals in Kazakhstan, every adult citizen is obliged to pay taxes to fund the budget. Currently, individuals pay taxes applicable to their wages. One tax and two mandatory contributions are withheld from an employee's official salary in Kazakhstan: Individual Income Tax (IIT); contributions for compulsory medical insurance (VOSMS); and mandatory pension contributions (MPC). Individual income tax (IIT) is levied on the income of employees and transferred to the state treasury by the employer. According to Article 322 of the Tax Code, such income includes wages and salaries. In addition, income classified as in-kind (transfer of goods, securities, provision of services to an employee, non-paid transfer of property, etc.) and material benefit (cancellation of debt to an employee, sale of goods to them, etc.) are subject to personal income tax. According to paragraph 1 of Art. 320 of the Tax Code, the individual income tax rate for all types of income is 10%. All Kazakhstan citizens who have a car are also subject to transportation tax. It includes excise tax on fuel and lubricants -- the larger the engine volume of the car, the higher the tax burden due to high consumption of fuel and lubricants; a vehicle tax -- the larger the engine displacement, the higher the tax burden; utilization fee, and fee for the initial registration of a motor vehicle. Real estate owned by citizens is also taxed in Kazakhstan. The amount of tax depends on one's type of property and is calculated for each object separately. The value of property for tax purposes is determined on the basis of a formula by multiplying several indicators: the base cost per square meter, which depends on the specific city or type of settlement; usable area of the property ( in sq. m.); a coefficient indicating the physical deterioration of the dwelling, which is determined by taking into account the age of the building from the date of commissioning and depreciation; a functional wear coefficient, which depends on the floor, location, amenities, engineering condition and type of heating; a zoning coefficient, which takes into account the location of the property in a particular community; and the MRP change factor, which shows how much this indicator has increased compared to the previous year.

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Cocaine Smuggled Into Kazakhstan From Italy and Poland Hidden in Coffee Capsules

One channel of illicit cocaine smuggling into Kazakhstan has been blocked, according to website polisia.kz. In Almaty, authorities found that a rented apartment was being used for the distribution of illegal drugs, which were imported into the country from Italy and Poland. Police seized plastic capsules disguised as coffee - inside of each was a unit of cocaine weighing 250 grams. Furthermore, Almaty police seized a parcel at a Kazpost office that belonged to the suspect. It held plastic jars that contained drugs, the total weight of which was about 0.5-1.0 kilogram (kg) of cocaine and more than 400 grams of ecstasy. In total, that's more than 3,000 single doses. It turned out that the detained foreigner had been acting as a courier for three months. "A pre-trial investigation is being conducted against the detainee for the illegal acquisition and possession of a particularly large amount of narcotic drugs for the purpose of their sale. Further measures are being carried out to establish the channels of cocaine supply in the country," said the deputy head of the department for combating drug crimes of the Ministry of Internal Affairs of the Republic of Kazakhstan, Bakhytzhan Amirkhanov. Possession and sale of drugs in Kazakhstan is punishable by harsh prison terms ranging between 10 to 15 years and the confiscation of property. According to the latest data, 47 anti-drug operations were carried out last year, including in cooperation with the corresponding authorities of Russia, Kyrgyzstan, and Australia. Eight international and 14 regional drug-trafficking operations were eliminated. According to the Ministry of Internal Affairs, the annual illicit trafficking of narcotic substances in Kazakhstan amounts to 20-25 tons, 95% of which are from cannabinoid group drugs. Most often they are smuggled into the country from Tajikistan, Kyrgyzstan, Uzbekistan, Afghanistan, and Iran via the Caspian Sea. Additionally, the transit of synthetic drugs from Europe is also an issue accounting for about 5% of the total, with less than 1% in the form of opium, heroin, and other types of hard drugs. Also, a number of drug laboratories have been discovered in Kazakhstan itself, with Astana, Almaty and Shymkent considered to be the leaders in terms of production sites and sales of new types of drugs. In total, 67 participants in criminal drug organizations were detained in 2023, and 483.2 kg of psychotropic substances, 11 kg of heroin, 32.8 kg of opium, 63.7 kg of hashish, 41.6 kg of marijuana, more than 17 tons of poppy raw materials and more than 22 tons of chemical reagents seized. At the same time, more than 3,000 people were convicted for crimes related to the trafficking of synthetic drugs. Statistics show that over the last 10 years, the number of drug addicts globally has increased by 23% and reached 296 million people. Currently in Kazakhstan, the illegal drug market has almost completely moved on to cyberspace, making it much more difficult to track down drug dealers.

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Kazakhstan Claws Back Another $98.5 Million From Nazarbayev’s Nephew

A well-known Kazakhstani businessman and a relative of former President Nazarbayev has returned another $98.5 million to the state's coffers. This money was returned as part of the criminal case against Kairat Satybaldy, according to the Anti-Corruption Agency of the Republic of Kazakhstan. "At present, the funds have been sent to the republican budget on account of compensation for damage caused to the state," said the head of the agency, Askhat Zhumagali. Satybaldy - a nephew of the first president of Kazakhstan - is a well-known businessman and former politician. He held positions in the Akimat of the capital, the National Security Committee, and developed business in the oil and gas industry, banking, the services sector, and trade. Satybaldy was detained in March 2022, accused of abuse of power and embezzlement on a large scale at both JSC Kazakhtelecom and JSC Center of Transport Services. In September of that year, an Astana court found Satybaldy guilty and sentenced him to six years imprisonment, replete with the confiscation of property and deprivation of the right to hold office for ten years. In addition, he was relieved of the title of Major General of the National Security Committee (KNB) and other state awards. In total, since the beginning of 2022, the Anti-Corruption Agency has returned $2 billion of illegally withdrawn assets, of which almost $1.5 billion belonged to Satybaldy. These include a stake in state company, Kazakhtelecom, companies in the railroad and telecommunications sectors, as well as jewelry worth more than $200 million. Additionally, as part of the criminal case, the state repossessed a stake in the Baisat Market, which had belonged to Satybaldy's son. The Agency noted that other investigations into Nazarbayev's nephew on cases related to non-payment of taxes and the laundering of proceeds from criminal activities are ongoing. At the same time, in order to preclude the withdrawal of embezzled budget funds abroad, the anti-corruption service intends to introduce digital technologies, including mechanisms for "coloring" money, and the use of digital tender to fully track how state funds are spent. "Long-term construction projects [and] untimely and low-quality construction are often associated with either embezzlement or withdrawal of money for further kickbacks to officials and other offenses,"Zhumagali stated. "Digital tenge as a tool will help us realize the [plan for] 'coloring' money. And if this money is allocated for salaries, it will not go in other directions. This whole procedure of money movement allocated from the budget becomes transparent, and all transactions must reach their goal; each tenge must be spent for a specifically envisaged purpose." In Kazakhstan, corruption continues to be one of the main factors hindering the country's economic development. In 2023, the country ranked 93rd out of 180 states on Transparency International's Corruption Perceptions Index with a raw score of 39 out of 100. However, this saw an improvement on the ranking of 101st registered on the 2022 index, and following the resignation of the government, on February 7th President Tokayev targeted stamping out corruption as a...

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Domestic Violence Victims Can Now Obtain EU Refugee Status After Ruling

Women who have suffered from domestic violence have the right to seek asylum in European Union (EU) countries, according to an EU Court of Justice ruling on January 16th. Anyone who has been subjected to physical and psychological violence, including sexual or domestic violence, can apply. If the those who apply do not meet the conditions for refugee status, they can claim additional measures of protection. Refugee status may already be granted to third-country nationals who are persecuted on racial, religious, or national grounds, as well as on the basis of political convictions or membership of a particular social group. According to the judges, threats from relatives "because of an alleged violation of cultural, religious or traditional norms" may qualify. Consequently, genital mutilation or forced marriage are often reasons for absconding, which women will have to disclose to authorities at the first interview. The EU came to this decision after the story of a Turkish national, a girl of Kurdish origin was forcibly married by her family. In the marriage, she was beaten and threatened by her husband, but managed to escape. The woman, who feared that her life would be in danger if she returned to Turkey, sought help and asked for international protection in Bulgaria. The local justices then referred the case to the Court of Justice of the EU. Karl Kopp, a migration expert for Pro Asyl - an independent human rights organization that advocates for the rights of refugees in Europe and Germany - said that the outcome is positive, and more women will be able to receive protection in the future. At present, Kazakhstan is discussing the issue of toughening punishment for domestic violence. A joint study by the Union of Crisis Centers and the Friedrich Ebert Foundation found that in 2021, the public safety authorities of Kazakhstan received almost 115,000 complaints of domestic violence. Of these, only 40% of cases made it to court, whilst 39% of perpetrators got off with sentences that restricted their freedom for periods ranging from two hours to three days.