Stephen M. Bland 

UK Response to Tragic Events in Kazakhstan Focuses on Finance

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First Published in OCA Magazine, Spring 2022 Edition

 

In January of this year, popular protests the like of which have not been seen since 1986 erupted across Kazakhstan, and although they were ignited by a rise in fuel prices, the anger behind them spoke to a long-standing discontent with the authorities. Crushed with an iron-fist and the assistance of Russian-led Collective Security Treaty Organization [CSTO] forces - the first time the organisations troops have been deployed in such a manner - 227 were killed and 6,000 arrested according to official figures, though Human Rights groups say the true numbers may be far higher.

   The uprising, which started in Zhanaozen on January 2nd and quickly swept across the country, seemed to come as much of a surprise to exiled opposition leaders as they did to the authorities. These events were also unexpected in the UK, where the government monitored the situation closely, but was in no position to deliver more than platitudes. Certainly, the UK didn’t want CSTO forces to become involved - as this could be used as a precedent for future action in other countries - and claims in Russia and China the protests were foreign-led were rightly summarily dismissed as disingenuous.

   On January 6th a Foreign, Commonwealth & Development Office [FCO] statement called for a ‘proportionate’ response from Kazakh law enforcement, but its concern was equally with regards to Kazakhstan’s ‘close relationship’ with the UK and the ‘destruction of property and buildings.’ In a speech delivered on January 20th - the thirtieth anniversary of the establishment of diplomatic relations between the UK and Kazakhstan - the British Permanent Representative to the OSCE, Ambassador Neil Bush struck a similar tone, expressing ‘regret [for the] loss of life,’ but again emphasising the ‘destruction of property.’

   Sadly, as I noted in an interview with the BBC World Service, a significant proportion of media coverage in the UK focused on financial aspects, such as oil workers walking out and the six-day internet shutdown costing crypto-miners approximately £15 million and sending its value plummeting, rather than the human cost. Smuggled-out videos of body bags didn’t play on the news, and neither did statements by exiled oppositionists such as Yerzhan Dosmukhamedov, the founder of the Atameken Party, that ‘most of them were shot in the forehead, exactly the way KGB used to conduct its executions in 1937.’ It is perhaps telling that from 2011-16, former British Prime Minister Tony Blair served as an ‘official advisor’ to Astana, whitewashing Nazarbayev’s regime for a fee estimated by the Organized Crime and Corruption Reporting Project to be £20 million. In the four quarters to the end of Q3 2020, total trade in goods and services between the UK and Kazakhstan stood at £1.8 billion.

   In the UK, attention has now turned to the amount of Kazakh money linked to the old elite which is sloshing around in the British economy. According to a KPMG report, in a country where there is effectively no line between state and private assets, 162 people control around 55% of Kazakhstan’s total wealth, and Britain has long been a favoured safe-haven for the ill-gotten gains of oligarchs. Accounts posted in October 2021 show foundations controlled by Nursultan Nazarbayev boasted £5.8 billion in assets - including over £2.2 billion in cash - held via a company called Jusan Technologies, a subsidiary of which, a Kazakh bank, received a multi-billion dollar state bailout. Registered in the UK, suspiciously, it has a single employee.

   On February 9th, London-based international affairs think tank, Chatham House called on the UK government to use sanctions to help the Kazakh people. The author of the report, Thomas Mayne, told OCA Magazine that billions has ‘been transferred out of Kazakhstan since it gained its independence, and a large chunk has ended up in the UK, especially our real estate markets. [We] recorded over £500 million of properties held by the Nazarbayev family and associates of the regime. Now that the UK has a new Global Anti-Corruption and Human Rights sanctions programme, modelled on the US Global Magnitsky Act, we have an opportunity to sanction some of these individuals, and freeze their ill-gotten gains. Whether this will happen is a different matter - I don’t sense there is much political will, despite over 200 people being killed in the recent disturbances and countless allegations of corruption. There’s also the question of what this money was doing here in the first place – our anti-money laundering legislation may be strong, but if concerns are not reported by real estate agents and lawyers, and are not followed through investigations by the National Crime Agency, then those laws and regulations are essentially useless.’

   With its cabal of pin-striped enablers, for decades Britain has not only turned a blind eye, but actively courted dirty money from kleptocrats. Thus it was that the subject of the biggest fraud case in British history, the Kazakh oligarch Mukhtar Ablyazov - who has judgements against him totalling over £3.5 billion - was not only able to own four London properties but also procure a “golden visa” allowing his son indefinite leave to remain in the UK. ‘The most amazing thing about it was there were really no background checks,’ Lord Wallace of Saltaire, government whip and spokesperson in the House of Lords for the FCO from 2010–2015 told OCA Magazine. ‘It demonstrates the extent to which we’ve preferred as a country not to look too closely at where money is coming from.’

   OCA Magazine spoke to Roman Borisovich from the NGO, ClampK, which organises ‘kleptocracy tours’ in London, visiting properties owned by oligarchs, including Kazakhs.

   ‘Sometimes shell companies are created because an entity can’t be owned by a single person, so five companies could be set up just for the purpose of one owning another; so there’s no way of linking an individual to this company,’ he explained. ‘And it’s not only people who lost money to these kleptocrats, it’s people who are losing their place on the property ladder because it’s impossible for the average Londoner to purchase anything. This has led to the appearance of ghost areas, like Ennismore Gardens, SW7, places where the majority of properties are owned by kleptocrats who don’t live there and don’t rent them out. This is known as the “lights out London” phenomenon that devastates whole neighbourhoods.’

   The Russian invasion of Ukraine has served to bring this issue into even sharper focus, with a renewed hope that legislation promised by David Cameron in 2016 may finally come to pass. ‘Britain has long served as a “laundromat” for dirty money and reputations from around the world,’ Director of Policy at Transparency International UK, Duncan Hames told OCA Magazine. ‘It’s important the new legislation leaves the corrupt or those evading sanctions nowhere to hide their wealth.’

   However, huge holes in the latest raft of sanctions and the ‘grotesque underfunding’ of crime agencies have led Borisovich to conclude that the UK is the ‘weakest link in the Western alliance against the Russian invasion of Ukraine.’ Arguing that the UK’s response has so far been largely symbolic, the author of Moneyland, Oliver Bullough characterised Boris Johnson’s claim in the House of Commons on February 23rd that no government could ‘conceivably be doing more to root out corrupt Russian money’ a ‘ludicrous… inversion of reality.’ Over 87,000 properties in England and Wales are owned by anonymous companies registered in tax havens.

   Asked to comment, the FCO failed to respond.