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The Importance of Taking Action Against Kleptocrats: The Cases of dodgy dealers and their enablers

Kleptocrats, individuals who exploit their positions of power for personal gain, pose a significant threat to global security, democracy, and human rights. The event (see video below) held on June 06, 2024 looks at cases of:

1. Dmitri Leus – A little-known banker originally from Turkmenistan, who was imprisoned in Russia on money laundering charges before making his way to the United Kingdom, where he recently obtained citizenship. Tom Mayne will present Crude Accountability’s new report titled “Politically Motivated? The Story of Dmitri Leus.”

2. Gulnara Karimova – Daughter of former President of Uzbekistan, Islam Karimov. Leila Nazgul Seiitbek will present the findings of Freedom for Eurasia’s report, “Who Enabled the Uzbek Princess? Gulnara Karimova’s $240 Million Property Empire.”

3. Dmitry Makarov – A Turkmen oil businessman with close connections to Turkmenistan’s authoritarian elites, who has amassed huge wealth in the West, including in the United States. Jeffrey Dunn of Crude Accountability will discuss his case.

Speakers will share the stories of these individuals in the context of Eurasian dodgy dealers making good in the West.

Speakers: Leila Nazgul Seiitbek, is an exiled lawyer and anti-corruption and human rights advocate from the Kyrgyz Republic who was granted asylum in Austria in 2021. She is Chairwoman of Freedom for Eurasia, which documents and reports on human rights and corruption abuses in the former Soviet Republics of Eastern Europe and Central Asia.

Thomas Mayne is an anti-corruption and money laundering expert, a former Visiting Fellow at Chatham House, the Royal Institute of International Affairs. Prior to this, he worked as a Senior Campaigner at anti-corruption NGO Global Witness, where he was responsible for the group’s reports on Central Asia and Eurasia. He has authored a variety of reports on corruption and kleptocracy, and his most recent work examined the UK’s anti-money-laundering regulations, the Unexplained Wealth Order legislation and Register of Overseas Entities property database.

Jeffrey Dunn is the Research Coordinator for Crude Accountability. Jeffrey works on corruption issues within the oil and natural gas sector, including in Azerbaijan, Kazakhstan, and Turkmenistan.

Moderator: Sebastien Peyrouse is Director of the Central Asia Program and Research Professor, IERES, The George Washington University. His main areas of expertise are political systems in Central Asia, economic and social issues, Islam and religious minorities, and Central Asia’s geopolitical positioning toward China, India, and South Asia. article examines the case of Gulnara Karimova, daughter of Uzbekistan’s former president, to illustrate the devastating impact of kleptocracy and underscore the urgent need for a concerted global effort to combat it.

The Far-Reaching Impact of Kleptocracy

Kleptocracy is not a victimless crime; its consequences are far-reaching and affect us all. When corrupt leaders enrich themselves at the expense of their citizens, it leads to a multitude of problems:

  • Erosion of Democracy: Kleptocrats undermine democratic principles by eroding public trust, undermining the rule of law, and creating an uneven playing field where personal gain trumps the public good.
  • Global Security Threat: Kleptocracy fuels instability and conflict. When resources are plundered for private gain, it creates resentment, breeds instability, and can pave the way for conflict.
  • Human Rights Abuses: Kleptocratic regimes often resort to silencing dissent, suppressing free speech, and persecuting those who challenge their authority.

The case of Gulnara Karimova provides a stark example of these dangers. Leveraging her family’s powerful position, Karimova amassed a billion-dollar fortune through bribery and extortion. Her actions cost Uzbekistan over $2.3 billion and involved human rights abuses, silencing dissent, and suppressing opposition.

Enabling Kleptocracy: A Global Network of Professionals

Karimova’s case also highlights the crucial role that professionals play in perpetuating kleptocracy. Lawyers, consultants, accountants, and real estate agents facilitated her activities by:

  • Concealing property ownership.
  • Laundering money.
  • Legitimizing ill-gotten gains.
  • Helping her evade law enforcement.

These enablers, operating in countries like the UK, allowed Karimova to acquire a vast property empire with her illicit funds. The question arises: were these professionals unaware of the harm they were causing, or were they complicit in the corruption?

Regardless of the answer, the consequences are undeniable:

  • Corruption undermines trust in institutions.
  • Corruption erodes the rule of law.
  • Corruption perpetuates inequality.
  • Corruption creates a culture of impunity.

Combating Kleptocracy: A Call to Action

Turning a blind eye to kleptocracy is not an option. It emboldens corrupt actors, undermines democratic societies, and perpetuates a culture of impunity. To effectively combat this global issue, a multi-faceted approach is required:

1. Strengthen Legislation:

  • Close loopholes: Existing legislation, while a step in the right direction, contains loopholes that allow kleptocrats and their enablers to exploit systems. For instance, the UK Bribery Act does not cover British Overseas Territories and Crown Dependencies.
  • Require transparency: Enact laws that mandate transparency in property ownership and financial transactions. This includes beneficial ownership registers for properties and companies.
  • Extend data retention: Increase the data retention period for financial transactions, including property purchases, for regulated professionals. The current five-year period is insufficient for complex investigations.
  • Strengthen bribery laws: Broaden bribery laws to encompass all financial or other advantages provided in exchange for improperly performing relevant activities. The UK Bribery Act serves as a good model.

2. Enhance Enforcement:

  • Investigate and prosecute: It is crucial to dedicate resources to thoroughly investigate and prosecute individuals involved in facilitating kleptocracy, including professional enablers.
  • Address enforcement gaps: The UK has a poor track record in prosecuting enablers of grand corruption. This needs to change.
  • Scrutinize negligence: Disciplinary tribunals and law enforcement should carefully examine instances where professionals claim ignorance of publicly available information, particularly when conducting due diligence on high-risk individuals.
  • Increase transparency: The UK should consider publishing statements of claim and skeleton arguments in high-profile cases involving corrupt foreign officials. This would aid public dissemination of information and improve transparency.

3. Foster International Cooperation:

  • Share information: Effective information sharing and coordinated efforts across borders and sectors are essential to combat transnational kleptocracy.
  • Ensure ethical asset repatriation: Repatriation of stolen assets to corrupt jurisdictions must prioritize the benefit of the people. The Global Forum on Asset Recovery’s Principles for Distribution and Transfer of Confiscated Stolen Assets in Corruption Cases (GFAR Principles) should be adhered to, with active and free involvement of civil society.

4. Empower Civil Society:

  • Protect free speech: Safeguard the right of journalists and civil society to speak out against kleptocracy and investigate suspicious activities without fear of reprisal. This includes addressing the threat of Strategic Lawsuits Against Public Participation (SLAPPs) that aim to silence critics.
  • Facilitate investigations: Grant journalists and researchers greater access to information related to high-profile corruption cases, while ensuring the protection of legitimate privacy concerns.

Conclusion: Building a More Just and Equitable Future

The fight against kleptocracy is a fight for a more just and equitable world. It requires a collective effort from governments, law enforcement, professional bodies, and civil society. By closing legal loopholes, strengthening enforcement mechanisms, fostering international collaboration, and empowering civil society, we can create a world where corrupt actors are held accountable and the rule of law prevails. The case of Gulnara Karimova, Dmitri Leus and Dmitry Makarov serve as a stark reminder of the stakes involved

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