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Swiss Bank Implicated in Corruption Scheme Linked to Islam Karimov’s Daughter

Swiss bank Banque Lombard Odier & Cie SA faces allegations of violating anti-money laundering regulations concerning funds linked to Gulnara Karimova, the controversial daughter of Uzbekistan’s first president, Islam Karimov. The Swiss Attorney General's Office revealed that the bank managed nine suspicious accounts tied to Karimova’s organization, the "Office," despite clear violations of external regulations and internal policies. A former bank manager was also charged with facilitating the scheme between 2005 and 2012. According to investigators, the "Office" functioned solely as a front to launder funds derived from corruption in Uzbekistan’s telecommunications sector. It reportedly had no legitimate business operations and employed no staff. The investigation found that the banker deliberately provided false information to obscure Karimova’s role as the ultimate beneficiary of the accounts. The individual is also accused of destroying or concealing documents that could have exposed the illegal origins of the funds. From 2011 to 2012, the banker allegedly allowed unauthorized access to a safe linked to the “Office,” enabling the removal of critical evidence supporting fraudulent transactions. Gulnara Karimova was once a prominent figure in her father’s administration, known for her roles as a singer, fashion designer, socialite, businesswoman, and diplomat. At one point, she was even considered a potential successor to Islam Karimov. However, by late 2013, her relationship with her father deteriorated, resulting in her political downfall. By 2014, her residence was raided, and she was implicated in a corruption case involving Swedish telecom giant TeliaSonera. Her legal troubles escalated, with convictions in 2015 for embezzlement, public fund misappropriation, and tax evasion, leading to a five-year sentence. This was extended in 2017, placing her under house arrest alongside her daughter. In 2019, Karimova was moved to a penal colony for violating house arrest conditions. In 2020, she was sentenced to an additional 13 years for crimes including creating a criminal association, extortion, and embezzlement. In September 2023, the Swiss General Prosecutor's Office filed an indictment against Karimova in the Federal Court. Prosecutors allege that foreign companies seeking entry into Uzbekistan’s telecommunications market were coerced into paying bribes through entities within the “Office” structure.' Karimova’s legal troubles extend beyond Uzbekistan. British courts have confiscated properties linked to her, valued at over £20 million. The ongoing investigation into her global operations has drawn attention to her role in one of the largest corruption cases in Uzbekistan’s history. This latest scandal has deepened scrutiny of Karimova’s dealings and raised questions about the accountability of financial institutions enabling such schemes.

Rule of law Corruption Crime Government Justice Court Cases Oligarchs officials Anti-Corruption

Out With the Old and in With the New: From Politicians to Felons – Part Two

The end of the first president of Kazakhstan, Nursultan Nazarbayev’s era coincided with a wave of mass protests across the country. The widely-accepted cause was the death of five children in a fire in a dilapidated annex to a private house, the like of which there are many in the suburbs of Astana. This tragedy occurred on the night of February 4, 2019, when the girls, with ages ranging from a baby to twelve years old, were left home alone. The event sparked furious complaints from mothers of children across the country, and on March 19 of the same year, Nazarbayev resigned, handing power to the next in the constitutional hierarchy, Kassym-Jomart Tokayev, the speaker of the Senate (Kazakhstan's upper house of parliament). High-profile cases of the transition period From that moment until the events of January 2022, the country went through a transitional period, which is often spoken of as having been a time of dual power. By analogy with the “Kremlin Towers” (a popular theory about clans in Vladimir Putin's Russia being engaged in an irreconcilable struggle for resources and influence), the new president's entourage began to be called “Akorda” - after the head of state's residence in Astana. Supporters of Nazarbayev and the idea of his return to the presidency, meanwhile, were known as the “Library” – a reference to the Library of the First President. It was believed that the officials Tokayev inherited from his predecessor were more likely to run reports to the Library than to the Akorda. This division serves to explain how the new president was bound in his ability to implement changes. Tokayev initially announced a course of political, economic and social reforms, but only the latter were implemented, while the rest were sabotaged. Even support from the general public, which Tokayev managed to garner in the National Council of Public Trust, did not help matters.Even under such constraints, however, it was possible to begin a purge of the establishment. For example, in 2020, the country was shaken by the first high-profile criminal case under Tokayev, when Bulat Bakauov, akim of the Pavlodar region and a bellwether of high-profile scandals under Nazarbayev, was accused of abusing his authority and arrested. However, the influence of Nazarbayev's entourage remained strong, so the sentence handed down to the former Akim turned out to be a meagre restriction of freedom for 3.5 years. The court obliged Bakauov to refrain from leaving his residence and regularly report to the probation service. In addition, Bakauov was obliged to engage in a hundred hours of public labor, ordered to return $10,000, and banned from holding public office. In the same year, there was a glimmer of hope that the former Akim of Almaty, Bauyrzhan Baibek - who was elevated to the height of political power by his father's childhood friendship with Nursultan Nazarbayev – would be held to account. Urban legends still circulate about the illegal earnings of Baibek and his team from the reconstruction of the center of...

Rule of law Corruption Crime Justice Court Cases Bishimbayev Ablyazov Khrapunov Criminal Responsibility Kazhegeldin Dzhakishev

In the Wake of Bishimbayev: From Politicians to Felons – Part One

Eight days ago, a scandal shook Kazakhstani society: Kuandyk Bishimbayev allegedly escaped from the penal colony where he was serving his sentence. Bishimbayev is a former high-ranking official of the government of Nursultan Nazarbayev's era, who was sentenced to 24 years in prison for the brutal murder of his wife. The Interior Ministry's Criminal Correctional System Committee immediately denied this information and said that a criminal case had been opened over the dissemination of this misinformation. This is not the first time Bishimbayev has become a resident of a penal colony. In 2017, as the Minister of National Economy of Kazakhstan, he was arrested on suspicion of large-scale bribery and embezzlement. In 2018, he was sentenced to a ten-year term with the confiscation of property and deprivation of the right to hold public office for the rest of his life. However, he was released on parole in 2019. Kazakhstan has been shaken by Bishimbayev's new crime. The trial, which was broadcast live online for the first time in the country's history, was watched by millions of citizens, not only within the Republic, but also abroad in other post-Soviet countries, and even in the West. However, this is not the first and, in all likelihood, not the last sensational case in which a former high-ranking official becomes a defendant. The long list of convicted ministers and akims can be divided chronologically into three parts: the Nazarbayev era, the transition period, and the so-called “New Kazakhstan,” which started after the January Events - the failed coup in 2022. This article discusses the most notorious court cases from each of these periods. Akezhan Kazhegeldin Former Prime Minister Akezhan Kazhegeldin was a politician known not only in Kazakhstan, but also in the West. He led the Government of Kazakhstan from 1994 to 1997. After falling into disfavor, in 1998 he attempted to challenge Nazarbayev in the upcoming presidential election. Kazhegeldin was not allowed to participate and had to leave Kazakhstan under the pretense of receiving medical treatment in Switzerland for unspecified health problems. In 1999, Kazhegeldin was put on an international wanted list, and in 2001 he was found guilty in absentia by the Supreme Court of Kazakhstan of abuse of power and authority, extortion and repeated bribes of millions of dollars, illegal acquisitions, the storage and transfer of weapons and ammunition, and tax evasion. Kazhegeldin was sentenced to ten years in prison, but has not returned to the country since. He continued to influence Kazakhstan's domestic politics from abroad until 2001 through the Republican People's Party of Kazakhstan, which he organized for this purpose. It was alleged that Kazhegeldin received kickbacks from a contract awarded to Tractebel in 1996 to run Almaty's electric company and power grid. A year later, the Belgian company also won a concession to manage gas pipelines in the south and west of Kazakhstan. In the U.S., meanwhile, the DOJ investigated claims Kazhegeldin received illegal payments of $6 million as part of a bribery scandal known as ‘Kazakhgate’....

Rule of law Legislation Corruption criminal charity

Kazakhstan Charity Head Investigated for Embezzling Flood Relief Donations

Kazakhstan is investigating Perizat Kairat, founder of the Biz Birgemiz Qazaqstan charity fund and a prominent volunteer activist, for allegedly embezzling over 1.5 billion KZT (approximately $3.1 million) intended for victims of spring floods. According to the Financial Monitoring Agency, a significant portion of the funds raised was reportedly used to purchase luxury items and real estate. Investigators allege that Kairat acquired several high-end vehicles, including a Mercedes-Benz S450, Lexus LX-600, and Haval, as well as luxury properties in Astana’s elite residential complexes, such as “Akbulak Riviera,” “Highvill Ishim Gold,” and “Kөk Zhailau,” along with a cottage in “Vela Village.” The total value of these purchases is estimated at 600 million KZT ($1.2 million). The agency further claims that the charity’s funds financed frequent trips to Dubai, Doha, London, and Istanbul, where Kairat reportedly stayed in five-star hotels. During these trips, she is accused of purchasing expensive accessories from luxury brands, dining at elite restaurants, and organizing lavish boat trips. Relatives and associates of Kairat are also implicated, accused of cashing out the charity’s funds for a fee of 8%. These alleged actions have reportedly eroded public trust in charitable and volunteer organizations, raising concerns about their transparency and integrity. Kairat has been detained pending further investigation. The Biz Birgemiz Qazaqstan charity fund, established in 2021, began as a nationwide volunteer movement with 15,000 members. The fund organized aid collections for flood victims in the West Kazakhstan, Aktobe, Kostanay, Abay, Akmola, and Ulytau regions. Donations from individuals and major companies were channeled through banking applications to support the fund’s efforts. Kairat, who also runs a family business exporting meat to Arab countries and owns a chain of flower shops, claimed in a social media post that she headed the foundation without financial compensation. She is also a member of the Public Council of the Agency for Strategic Planning and Reforms. Kairat’s detention comes as Kazakhstan's Ministry of Culture and Information works on proposed legislative changes to regulate charitable activities. These amendments aim to grant state bodies greater control over fundraising efforts. However, experts warn that such measures could significantly hinder charity work in the country. For example, proposed restrictions on independent fundraising have sparked concerns among activists and organizations, with critics arguing that these changes may stifle grassroots initiatives and reduce public participation in charitable causes.

Rule of law Crime Cultural Heritage Anti-Corruption

Artifacts Seized as Illegal Assets Transferred to Kazakh Museum

The Company for the Management of Returned Assets (CMRA) LLP has announced that ancient jewelry, reclaimed as illegal assets from individuals, will now be part of the National Museum of Kazakhstan's collection. Examinations revealed that the jewelry has significant historical value, dating back to the early Iron and medieval periods. Some of the pieces, identified as ancient artifacts, are linked to the Saka period, a pivotal era in Kazakh history. According to a letter from the National Museum, several items hold cultural importance, representing Kazakhstan's history from the Early Iron Age through the Middle Ages. These artifacts will be added to the museum's permanent collection, making them available for scientific research and accessible to a broader audience. The collection, which includes jewelry crafted in the traditional “animal style,” weighs approximately 118 grams and dates between the 7th century BC and the 3rd century AD. Notable pieces include an eagle’s head ornament, a depiction of a horned animal in a raised position, figures of a winged lion and a winged horse, a leopard in a dynamic pose, an image of a running deer, ancient coins, two interlocked spiral rings, and a ring with a lion's head. Additionally, a ring inscribed with Arabic script will undergo further study and re-evaluation. Previously, the CMRA named the five most valuable pieces of jewelry and accessories recovered and returned to the state.

modernization ILO Government Cotton Rule of law Agriculture

Uzbekistan Ends Forced Labor, But Cotton Industry Faces New Challenges

Global Voices reports that Uzbekistan has succeeded in phasing out forced labor in its cotton industry, but now faces new challenges. The country has made progress in ending forced labor and modernizing its cotton sector, driven by economic and political reasons. Forced labor hurts businesses and the nation’s international image, which the government has aimed to improve since 2016. Cotton production accounts for 12% of GDP. Since 2017, the government has introduced major reforms to modernize Uzbekistan’s cotton industry, led by President Shavkat Mirziyoyev after he took office in 2016. By 2018, labor control was strengthened, and the cotton cluster system, which controls the entire production process, began to take shape. Today, almost all cotton is grown through 142 clusters. Cotton quotas have been abolished by 2020, and the minimum wage will now be negotiated. The same year, the International Labor Organization reported that child labor was no longer a problem, and the international boycott was lifted in 2022. Eradicating forced labor has been hailed as “one of the most significant victories anywhere in the world in the battle against forced labor in the twenty-first century,” said Bennett Freeman, co-founder of the Cotton Campaign in 2022. This achievement was possible thanks to the diligence of organizations such as human rights defenders of Uzbekistan and the Uzbekistan Forum for Human Rights, which monitored the cotton fields and recorded violations, as well as the government's promptness in reviewing these reports. Global Voices writes that despite the progress achieved in Uzbekistan's cotton industry, there are still serious problems. The report states, “Despite abandoning forced labor, the government still continues to exert strong control over cotton production and prevents farmers from fully operating on their own terms.” Farmers receive resources and loans, but the system remains inefficient, with state-set cotton prices often differing from global rates. The government and industry need to address these ongoing issues while pursuing international standards and export opportunities to build trust and transparency.