@Tengrinews.kz

Fugitive Oligarchs Ablyazov and Khrapunov Ordered to Return $32 Million to Kazakhstan by U.S. Court

Kazakhstan has secured a victory in the United States against Felix Sater and his companies, which were involved in investing money stolen by Mukhtar Ablyazov from BTA Bank. The jury in the U.S. District Court for the Southern District of New York awarded over $32 million in favor of BTA and the city of Almaty. In addition, the Kazakh oligarch and former Mayor of Almaty and Minister of Emergency Situations, Viktor Khrapunov, was reported by BTA’s press service to have caused multi-billion-dollar damages through his actions.

After a three-week trial, the jury recognized BTA Bank and the city of Almaty as victims of Sater’s unlawful activities, which included the misappropriation of property, unjust enrichment, and obtaining money fraudulently. The compensation awarded exceeded the requested amount, totaling more than $32 million including interest.

The trial, which began on June 10, 2024, demonstrated that Mukhtar Ablyazov abused his position at BTA Bank by issuing fictitious loans worth billions of dollars, leading to the bank’s collapse. At the time, BTA was the third-largest bank in Kazakhstan. Ablyazov also privatized state land and sold it at undervalued prices to companies he controlled. In addition, the Khrapunov’s fraudulent actions, meanwhile, caused over $300 million in damages to Almaty, leaving significant urban land undeveloped, whilst other assets were sold to the Khrapunovs shell companies for significantly less than their market value through fictitious tenders.

Evidence presented in court showed that Ablyazov and Khrapunov combined their stolen funds, with Ilyas Khrapunov, Viktor’s son and Ablyazov’s son-in-law, accused of laundering a substantial part of these funds. In September 2018, a UK court fined Ilyas Khrapunov $500 million for helping Ablyazov breach an asset freezing order. The Bayrock Group, Inc., Global Habitat Solutions (both owned by Sater), and MeM Energy Partners LLC (owned by Mendel Mochkin) were found to have facilitated the laundering of the stolen money into the U.S. financial system. The jury determined that Sater and Mochkin knowingly laundered the funds stolen by Ablyazov and Khrapunov.

Additionally, the jury, having been presented with comprehensive evidence of Ablyazov’s fraud against BTA Bank, returned a unanimous verdict against his co-conspirators. For the first time, a U.S. jury also unanimously ruled in favor of the city of Almaty concerning fraud committed by Viktor Khrapunov.

Sater was not the only defendant in the asset laundering case. Daniel Ridloff and RRMI-DR LLC were also ordered to return assets to BTA and the Almaty Akimat. Ferrari Holdings LLC, another defendant, is in default, but Almaty Akimat and the bank plan to seek a judgment against it.

In Kazakhstan, in 2018 Mukhtar Ablyazov was sentenced in absentia to life imprisonment for organizing a murder and embezzling funds from depositors of BTA Bank. In the same year, Viktor Khrapunov and his wife, Leila Khrapunova, were also sentenced in absentia to 17 and 14 years in prison, respectively. Back in December 2022, the Southern District Court in New York ruled against Ablyazov and his associates in the amount of $218 million. In total, Ablyazov stands accused of having embezzled up to $10 billion, whilst Ilyas Khrapunov is subject to freezing orders in the amount of approximately $424 million.

EDB

New Report Analyses Eurasian Transport Network

On 27 June, the Eurasian Development Bank (EDB) released a report titled “The Eurasian Transport Network”. The report introduces a new conceptual approach to future developments within the Eurasian Transport Network and outlines key projects and initiatives aimed at improving transport connectivity in Eurasia.

The Eurasian Transport Network is a system of interconnected latitudinal and longitudinal international transport corridors and routes, facilitating intra- and trans-continental connectivity for Eurasian countries. It builds upon over 50,000 km of international east-west and north-south transport corridors, linking Asia, Europe, and the Middle East.

The Eurasian Transport Network consists of five key international transport corridors: the Northern, Central and Southern Eurasian Corridors, TRACECA, and the International North-South Transport Corridor (INSTC), along with branch lines and regional routes.

According to EDB analysts, in 2023, international freight traffic along these five corridors of the Eurasian Transport Network totaled 260 million tons, including 3.6 million 20-foot containers (TEU). Compared to 2013, the volume of international container traffic has more than tripled. The most dynamic growth has been driven by foreign trade and transit container transit with China. Since 2013, the number of container trains to and from China via the Eurasian Economic Union countries and Central Asia has increased by a factor of 200.

The EDB introduced the concept of a Eurasian Transport Network in 2021, and this report presents its detailed framework.

Three years ago, the EDB released a report titled “The International North–South Transport Corridor: Promoting Eurasia’s Intra- and Transcontinental Connectivity”, which estimated that connecting international transport corridors would yield a 40% increase in freight traffic. In 2024, this projection was fully confirmed by the dynamic development of the INSTC and its linkage to TRACECA.

The advancement of the Eurasian Transport Network is paving the way for the establishment of a transport hub in Central Asia. The development of multimodal transport and transit corridors is the only viable solution for Central Asian countries due to the significant distances between trade partners. Establishing a transport hub will facilitate an increase in international traffic, including transit. The EDB projects that freight traffic along the three main corridors running through Central Asia will increase by 1.5 times to 95 million tons by 2030. Container traffic is expected to grow even more rapidly, by almost two-thirds, reaching 1.7 million TEU.

Evgeny Vinokurov, EDB Chief Economist, underlines that “at present, transportation costs for landlocked countries are 1.4 times higher than for coastal states. Even during the time of the Silk Road, trade routes in Central Asia were predominantly latitudinal, in the east-west direction. Building new north-south transportation links is a historic opportunity for Central Asia. This is an opportunity to become the continent’s transport hub, unlock new production niches and improve conditions for foreign trade, especially with West and South Asia.”

The EDB concludes that given the limited investment opportunities facing most developing countries in Eurasia, a key area of cooperation to develop transport links in Eurasia is boosting the number of projects attractive to international development banks and private investors. This includes projects implemented through public-private partnerships (PPPs) and cross-border PPPs.

 

 

photo: president.uz

New Industrial Zone Launched with Chinese Investment in Uzbekistan

On June 27, President of Uzbekistan Shavkat Mirziyoyev launched the construction of the first project in the Technopark special industrial zone in the Zaamin district of Jizzakh.

Chinese investors have allocated a total $1.2 billion towards the realization of 30 projects in the new Technopark.

Located on 400 hectares of land, the Technopark will comprise facilities to produce goods with high added value and import-substituting products to meet demands from foreign markets, with particular focus on electrical and mechanical engineering, building materials, furniture, food, and services industries.

The initiative will create over 5,000 jobs and produce $70 million worth of goods for export.

The Technopark will also provide an International Center for the Exchange of Experience and Engineering, to provide training in specialized skills required by industrial enterprises.

Other facilities include an office complex, residential buildings, an eco-park, a large exhibition hall and a shopping center.

Apart from the Technopark, Zaamin has recently created a zone to develop its services to tourism which is fast becoming a major driver in the scenic region’s economy.

 

 

 

photo: Kazakh Ministry of National Economy

Islamic Development Bank Pledges up to $2 Billion for Infrastructure Projects in Kazakhstan

On June 27, Deputy Prime Minister-Minister of National Economy of Kazakhstan Nurlan Baybazarov signed a Framework Program Agreement between the Government of Kazakhstan and the Islamic Development Bank (IsDB).

As reported by the Kazakh Ministry of National Economy, the agreement consolidated previously reached agreements on attracting long-term investments to implement infrastructure projects concerning Kazakhstan’s water management and transport sectors this year.

The Islamic Development Bank will allocate up to $2 billion towards the above.

The Kazakh Ministry of Water Resources and Irrigation has earmarked 16 projects for funding in 2024 including the construction and reconstruction of reservoirs, dams, irrigation canals, and associated infrastructures.

The Ministry of Transport proposed four projects related to the reconstruction and construction of 500km of major highways.

 

Ashgabat, former-President Niyazov's Ruhnama Monument; image: TCA, Stephen M. Bland

Inside Turkmenistan: What Self-Isolation Reveals About the Nation

Getting into Turkmenistan has always been a complex undertaking. For most foreigners, the only option available is to apply through an accredited Turkmen travel firm, meaning a ‘guide’ will trail ones every move. Alternately, there is a five day transit visa, though these are denied more often than they are issued. Arguably the second most insular state in the world after North Korea, it is fair to say that Turkmenistan really isn’t in the market for tourists.

Frozen in time

The first leader of independent Turkmenistan was Saparmurat Niyazov, who climbed up the ladder in the Soviet nomenklatura (administration) and held such positions as First Secretary of the Ashgabat City Committee of the Communist Party of the Turkmen SSR; Chairman of the Council of Ministers of the Turkmen SSR (i.e., Prime Minister); and First Secretary of the Central Committee of the Communist Party of the Turkmen SSR before the collapse of the Soviet Union. From First Secretary, he became President of Turkmenistan for life, as formalized legislatively in 1999.

In the second half of 1993, the Democratic Party of Turkmenistan (formerly the Communist Party of the Turkmen SSR) proposed the extension of Niyazov’s powers until 2002 – a second term without re-election – and in January 1994, 99.9% of voters purportedly supported this in a nationwide referendum.

From 1994 to 1995, Turkmenistan considered renaming the president’s office “Shah” and declaring the republic a Shahdom. However, the idea did not find favor with the elders. Niyazov’s strained relationship with his son was also taken into account, and the idea was buried.

Declaring himself “Turkmenbashi” (father of the Turkmen people,” Niyazov began to rain down a cavalcade of decrees including bans on lip-syncing, car radios, cinema, clowns and the playing of recorded music at weddings. Long hair on men and beards were outlawed, citizens with gold teeth ordered to have them extracted.

“I watched young dogs when I was young,” Niyazov stated. “They were given bones to gnaw to strengthen their teeth. Those of you whose teeth have fallen out did not chew on bones. This is my advice.”

All hospitals outside of Ashgabat were shut and the funds were instead spent on a $20 million new leisure center for horses. Compulsory education was cut by a year so students could no longer qualify to study abroad. The opera house and ballet boarded up, in place of culture came such fanciful projects as the $50 million dollar Turkmenbashi’s World of Fairytales theme park and the world’s largest shoe. Six meters long and one and a half meters tall, it was manufactured to symbolize the “great strides” Turkmenistan had made under Niyazov’s leadership.

Numerous editions of Niyazov’s, Ruhnama, (book of the soul) – his version of Mao’s Little Red Book – were released.

A heady cocktail of pseudo-spiritual cogitations and revisionist history, the book claimed the Turkmen people to be the inventors of the wheel and heirs to Earth’s oldest civilisation. Within a year, most bookstores carried nothing but the Ruhnama, and novelists were arrested and previous greats from the Turkmen literary cannon removed from libraries and ceremonially burnt. By 2005, all libraries outside of the National in Ashgabat were ordered closed, as people should already own all the reading material they would ever need. Officially declared the “Thirteenth Prophet” by parliament, Niyazov pronounced himself the “direct descendant of Mohammed and Jenghiz Khan… All who read the Ruhnama three times, Turkmenistan’s literary masterpiece,” he promised, “are assured of going to Paradise.”

Following Niyazov, his successor and former dentist, Gurbanguly Berdimuhamedov, dismantled almost all “developments” of the first president, except strict political censorship. The unspoken ban on the internet was even abolished. So would Turkmenistan cease to be frozen in time as some preserve of the previous era of punch cards and office-sized electronic-computing machines?

Arkadag and change

The first two internet cafes opened in Ashgabat in February 2007, apparently a symbol of the changes that Gurbanguly Berdymukhamedov would bring. Berdymukhamedov began rewriting the laws almost immediately, dismantling the cult of personality Niyazov had sought to build.

On February 22, 2007, reference to the “Great Turkmenbashi” was taken out of the “oath of allegiance” to the Motherland – a poetic supplement to the national anthem invented during Niyazov’s reign – and in March, the oath of allegiance was abolished altogether. On February 28, 2007, local newspapers replaced the portrait of Saparmurat Niyazov on the front pages with a picture of Gurbanguly Berdimuhamedov. On March 15, Berdymukhamedov signed a decree removing the name of the first president and “father of all Turkmens” from the presidential standard. Two days later, Berdymukhamedov announced the revival of the Academy of Sciences in Turkmenistan, rural health clinics, and university military departments.

On January 1, 2008, Turkmenistan reopened currency exchange offices closed by Niyazov in 1998, and the Interbank Currency Exchange began operating. In 2007-2008, Turkmenistan returned to the names of months according to the Gregorian calendar and the days of the week according to the solar Hijra. Niyazov had renamed the month of January after himself, whilst September was rebranded Ruhnama, and the words for April and bread had been replaced with the name of his late mother. The avenues were also renamed, and a twelve-meter-tall golden statue of Turkmenbashi, a rocket-shaped monument called the Arch of Neutrality, was removed to the suburbs. Previously, Niyazov’s golden likeness had rotated to face the sun, or as a Turkmen saying had it, the sun revolved to face him.

In January 2009, Niyazov’s and his relatives’ names disappeared from the titles of Turkmen newspapers and magazines.

In 2021, the president, who had received the title Arkadag (patron), carried out parliamentary reforms, creating a bicameral legislature to replace the unicameral one.  Berdymukhamedov chaired the upper house himself, briefly uniting the two branches of power – executive and legislative – in his hands.

In March 2022, Turkmenistan held an extraordinary presidential election, which Arkadag’s son, Serdar Berdymukhamedov, won. It is a sad irony of fate that Berdymukhamedov’s son most likely received his name most likely in honor of Niyazov, who was known not only by the title Turmkenbashi, but also Serdar, i.e., leader.

Turkmenistan and the outside world

Perhaps Niyazov’s only achievement to remain intact is Turkmenistan’s neutrality, which the republic proclaimed on December 12, 1995. At the same time, UN General Assembly Resolution No. 50/80 was adopted, which expressed the hope that “Turkmenistan’s permanent neutral status will contribute to the strengthening of peace and security in the region.” In this resolution, the UN “recognizes and supports Turkmenistan’s proclaimed status of permanent neutrality.”

However, it is believed that Turkmenistan’s neutrality was due to a more mundane reason rather than ethics. By 1995, Niyazov had spoiled Turkmenistan’s relations with almost all regional neighbors and colleagues from the Commonwealth of Independent States. Presidents Nursultan Nazarbayev of Kazakhstan and Islam Karimov of Uzbekistan particularly irked him when they criticized Turkmenistan.

Nevertheless, Gurbanguly Berdimuhamedov and his son did not give up this neutrality, whilst at the same time Turkmenistan’s representatives have been willing to accept Kazakhstan’s integration initiatives within Central Asia, primarily in the C5+1 format.

Experts have been particularly wary about the recent visit of Russian President Vladimir Putin to Tashkent, where members of his delegation discussed with their Uzbek counterparts routes of cargo supplies to bypass Kazakhstan. In particular, Astrakhan Oblast Governor Igor Babushkin talked about this with the Prime Minister of Uzbekistan Abdulla Aripov, discussing the possibility of delivering Uzbek cargo by sea through the international port of Turkmenbashi to ports in the Astrakhan region.

Kazakh analyst, Akhas Tazhutov has written that the idea of creating such a transportation link between Russia and Uzbekistan, as well as Kyrgyzstan, Tajikistan, and Turkmenistan, which would allow them all to bypass Kazakhstan, “has been hovering in the air for quite some time. Various reasons are cited. However, the key reason seems to be Astana’s tightened rules for cargo transit, introduced by the end of 2022, and agreed with Washington and Brussels. In any case, it seems that Russia is promoting a type of logistics that can be recognized as reasonable only in case of a real conflict with Kazakhstan,” the analyst stated.

If the new route works, these negotiations and the route can be considered the beginning of Turkmenistan’s exit from voluntary self-isolation, which, if assessed objectively, will only serve to hinder the country’s development.

Stephen M. Bland

Stephen M. Bland

Stephen M. Bland is a journalist, author, editor, commentator and researcher specialising in Central Asia and the Caucasus. Prior to joining The Times of Central Asia, he has worked for NGOs, think tanks, as the Central Asia expert on a forthcoming documentary series, for the BBC, The Diplomat, EurasiaNet, and numerous other publications.
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Published in 2016, his book on Central Asia was the winner of the Golden Laureate of Eurasian Literature. He is currently putting the finishing touches to a book about the Caucasus.
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www.stephenmbland.com

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@gov.uk

Kazakhstan’s Foreign Ministry Accuses David Cameron of “Misinformation”

The Russian prankster duo Vovan and Lexus (real names Vladimir Kuznetsov and Alexei Stolyarov) have published an audio recording of them in conversation with the British foreign minister, David Cameron. In the call to Cameron they introduced themselves as the former president of Ukraine Petro Poroshenko. The hoax call made reference to the Kazakh foreign minister, Murat Nurtleu.

Kuznetsov and Stolyarov claimed to Cameron that Nurtleu had spoken to ‘Poroshenko’ about the sacrifices that the Ukrainian people are making for Kazakhstan by fighting to contain Russia. There is a theory that were Russia to win its war against Ukraine, its next target would be the territories of northern Kazakhstan, which border the Russian Federation.

Cameron appears not to have realized that he was being hoaxed. During the conversation he said that he didn’t not think that the current Ukrainian president Volodymyr Zelenskiy should complain about Ukraine not being able to join NATO. Cameron also said that he did not know how US presidential candidate Donald Trump would handle the situation in Ukraine if he returned to power in America’s November elections.

The Kazakh foreign ministry has dismissed Cameron’s alleged part in the conversation as “misinformation”. Its spokesperson Aibek Smadiyarov commented: “There was no such conversation; the British minister bears all responsibility for misinformation.”