Central Asia: Integrity Due Diligence. Third Parties Risks. Your Trusted Advisors for Central Asia International Investors Solutions: Managing Your Risks in Central Asia Doing Business in Central Asia: Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan.

Corruption is pervasive in several countries of Central Asia, where a majority of respondents say they are either asked or are expected to pay bribes to receive public services...

If your company’s business is carried out in one of the post-Soviet Central Asian countries like Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, or Turkmenistan, then

Making your corporate ethics policies understood and routinely referred to by employees at your local offices in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan is a huge challenge. Solving this challenge means getting rid of foreign corruption exposure

Sarsenov Corporate Governance Advisory
Compliance in Kazakhstan, Kyrgyzstan, Uzbekistan
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Kazakhstan & Central Asia - Compliance Updates
May 29, 2017

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June 15, 2017

Well Known Businessman Was Arrested in Kazakhstan For Being Part of Criminal Gang, and For Extorting Share in Business From Other Entrepreneurs.

This week in Kazakhstan started with the resonating news in media about arrest of Mr. Muratkhan Tokmadi, Owner and CEO of Kazstroysteklo LLP, a company producing construction glass and windows for glazing. Mr. Tokmadi has been well known as a successful businessman for the last 10 years. Authorities incriminated Mr. Tokmadi that he had been a part of criminal gang, where Mr. Tokmadi was actively extorting money and shares in business from other entrepreneurs in Kazakhstan. There are many rumors circulating about this case. Court ruled to support his arrest today. The process of arrest was highly resonating, and was translated over TV. According to some rumors the arrest marks beginning of the new turf battle between political groups, and that some other new arrests of well known businessmen and politicians might follow after this.

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Nurlan Sarsenov,
Partner
Central Asia Compliance



June 13, 2017

Another Day of Surprises.

Today, we have got another day of surprises in our IDDs work in Central Asia.

Thus, recently, one of my customers, European company, asked me to conduct a due due diligence of one of their potential partners in Kazakhstan. The partner was well known individual in the country and was the owner of multiple businesses, and has been at many high profile government positions for a long time. We knew about all these facts.

But, apart from that, even to my own great surprise, we found out that the partner currently had two (!!) separate active criminal rings under his informal control!

Those gangs existed in the form of small businesses, security firms, etc. One of them was run by former direct report of the subject while he was at the government position!

In this relation, I remembered my funny conversation with one of my U.S. colleagues at the SCCE conference. When she asked me, 'What are you guys up to today in Central Asia?' I tiredly replied, 'corruption us usual'.

She smiled. But at that same moment I realized that she thought that was kidding :)))


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Nurlan Sarsenov
Partner
Central Asia Compliance



May 30, 2017

The Social Responsibility of the University in the Training of Specialists.

The latest developments in the modern world and in Kazakhstan normally bring people to the realization of the significance of social responsibility. Today various scholars and practitioners in Kazakhstan speak about the increased importance of the social responsibility exercises by local social institutions.

In order to understand what is the social responsibility of the university we need to consider the term "social responsibility of the business." Social responsibility of business (SRB) is a voluntary contribution of business to the development of society in the social, economic and environmental spheres, directly related to the core business of the company and exceeding the minimum defined by law.

Nowadays, in the aftermath of the global financial crisis, it is still hard to doing business in current environment, as well as hard to create new jobs, or secure competitive salaries for employees of the companies. In the time of economic crisis most of socially responsible companies strive to find new ways to reduce costs of production in order to save jobs, while other companies simply go to cut wages and lay off their employees.

The social responsibility of the universities can affect the country's socio-economic development, primarily, through trainings and the capacity building role of the science. This is how the universities can contribute to the country’s development. Some scholars consider the universities in the broader sense of their role in society, and through the function of schools focused on the needs of society and individuals.

The strategy of the university as a social institute needs to be socially responsible. In this term, the mission of the Al Farabi Kazakh National University (KAZNU), which is located in Almaty city of the Republic of Kazakhstan, is to provide the best training of young specialists, in full compliance with the Development Strategy of Republic of Kazakhstan. The strategy sets up all appropriate standards and requirements to an education and scientific processes in Kazakhstan. In 2016 KAZNU was awarded the certificate of international rating agency QS World University Rankings and became the first one in Central Asia who was included in the top 250 of the best universities in the world, taking its 236th place.

KAZNU has over 80 years of history, helping students from all over the world to get various degrees, supporting many innovative projects. KAZNU has always been helping its students in organize their free time by conducting lots of various activities in campus. Most of such activities combine fun, education, and practice. The ultimate responsibility of KAZNU is the future of young people it works with, quality of its education, spiritual development of its students, as well as help with healthy lifestyle.

About authors:

K. Mukhtarova, Doctor of Economics, Professor, Head of Department of Management & Marketing, Al Farabi Kazakh National University (KAZNU)

Zhumagazieva, MBA, Senior Faculty, Department of Management & Marketing, al Farabi Kazakh National University (KAZNU)


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February 14, 2015

Kazakhstan Compliance Updates - Head of Border Patrol Service Arrested for Bribery

The court ruled today to fine former chairman of Kazakhstan Agency for Regulation of Natural Monopolies Murat Ospanov for 1.1 billion tenge ($5.9 million) and released him right from the courtroom on bail.

Ospanov was accused of taking large bribes (Part 5 of Article 311 of the Criminal Code). He pleaded not guilty during the trials. “I don't admit guilt, the accusation has not been proven, the origin of evidences is not clear, it is all far-fetched,” Ospanov told in a courtroom.

The court found Murat Ospanov guilty in organization of a crime and taking bribes.

Besides fines, Ospanov's personal property was confiscated. The personal property of Ospanov include land in Astana and Semey, parking lot in the residential complex, $37,000 cash, watches, laptop, and tablet. The court decided not to confiscate a luxury apartment and bank accounts registered on his wife and daughter in case he is found guilty.

He was also prohibited to hold central and local government positions for lifetime.

The verdict was read out by judge Erbol Rakhimbekov on Friday.

Ospanov was detained on July 1, 2014, the Financial Police of Kazakhstan arrested him on July 3, 2014. The order for arrest was signed by the Almaty district court No 2 in Astana.

Murat Ospanov has allegedly taken bribes in the amount of $300 thousand for his assistance and protection of subject of natural monopolies.

Murat Ospanov has chaired the Agency since January 2012.

(AKIpress)



February 4, 2015

Kazakhstan Compliance Updates - Head of Border Patrol Service Arrested for Bribery.

Head of the Border Patrol Service (BPS) was arrested in Kazakhstan recently. Official reason for his arresting was known to be an office abuse and corruption during the government procurement by BPS. However, serious rumors circulate in the country that he has widely opened Kazakhstani borders for trafficking heavy drugs from Afghanistan to Russia through Kazakhstan. And there many evidences demonstrating coincidence in timing between two facts: when this general was newly assigned to this position with BPS and when Russians started finding huge batches of Afghani heroin on their border with Kazakhstan. Thus, 385 pounds of Afghani heroin was stopped by Russians in October of this year. This last batch only could have been used for preparing 15 million heroin shots and would cost US $500 million on the market.

Such crime is not internal problem of one country, but it was about to bring tensions between two neighboring countries: Kazakhstan and Russia, not to mention damage to people of both countries.

As an origin of Kazakhstan, Central Asia, what I think when I see this kind of cases is how irresponsible should be people who assigned him to the government position. In this specific situation the position is an important part of the National Security (KGB office during Soviet-time). People assigning him cooperate with international organizations in combating corruption and they understand the problem..

Do you think people like in this committing bribery should have chance to get back ever from behind the bar? I would agree, such people at least should be given a long term to serve. But the magic of Kazakhstan and Central Asia is that in an year or two same guy will reveal himself somewhere else leading another government agency.

In the neighboring Kyrgyzstan, for example, a man, official of the department which was responsible for issuing construction permissions, was arrested in May this year. He was involved in bribery and falsifications of permission documentation, giving way to illegal construction of buildings by Turkish construction company. And now, in a matter of five months after that case happened, the same official surfaced at an "Expert" position in the Defense Ministry. – It is magic!

'Did somebody say about combating corruption in Central Asia?!'

Nurlan Sarsenov, PhD, MBA, CCEP

Managing Partner, Sarsenov-Advisory




November 3, 2014

Kazakhstan Compliance Updates - Be Cautious With Labor Departments Too.

Last week the Labor Departments’ Senior Employment Inspector in Kazakhstan was convicted to serve 7.5 years term for bribery. Together with his deputies he received a bribe for issuing false expert opinion. The opinion had to be used in a court dispute between employee and employer, one of the largest local companies.

It was found out that Senior Inspector was paid $2,000 for false confirmation of employer’s fault in the work place accident that happened to employee. After some additional findings were made during investigations conducted by Anti-corruption department, 10 more new corruption charges were indicted on the same inspector.

What I want to say here is that The Labor Department in Kazakhstan, however humble their role might seem in corruption in this country – comparing Tax Department or Oil and Gas Ministry, Anti-Trust Agency, etc. - is also adding troubles to international companies here. In one case a very small deal with Labor Department’s inspector become a reason of starting investigations by SEC against US company.

To those who have offices in Kazakhstan we do strongly recommend to discourage local managers from temptation to close their “small problems” by making “small deals” with Labor Department inspectors. Even though bribes their soliciting are not look as big as by other Departments - this kind of small deals are being detected easily, and even worse, may trigger further complications with local authorities.

Nurlan Sarsenov, PhD, MBA, CCEP


October 30, 2014

Kazakhstan Compliance Updates - This is how whistleblowing works in Central Asia.

One metal pipes production factory in Kazakhstan had a workplace accident recently. The woman, mother of two, employee of the factory, died immediately after being pressed under tons of metal pipes which fell down on her from the storing racks.

Inspector of Employment Agency found that company violated storing rules for metal pipes. But no one was punished. Nobody got in jail for the accident. However, the company was “strictly ordered” by the agency “to store pipes correctly”.

Couple months later, the company’s warehouse employee blows a whistle reporting the agency that problem is still there waiting for the next victim. Nothing was fixed. Even the order of the agency has not been followed through.

Do you want to know what that hero employee has got as a result of him blowing whistle? Well here is a shortest list: (i) he had plenty of both, friendly and hard, talks with his managers; (ii) security department of the company showed at his home threatening him physically; (iii) management framed-up case against him; (iv) boycotts; and (v) he has been fired.

Looks like same as everywhere. Nothing new, right?

But the difference is huge, and it makes Central Asia business environment very specific.

Right after the report was made to Employment Agency – the agency turned ‘deaf and blind’ simultaneously. Of course, they even never heard about preventing retaliation or protecting whistleblower! To top it all the same agency tried to prove him that everything was fixed - take it easy buddy!

But the fact is that this employee spoke up and has recently been fired and is still suffering many other consequences of whistleblowing – all that only because he wanted to prevent other deaths in the company. This is how whistleblowing works in Central Asia!



August 8, 2014

Kazakhstan Compliance Updates - Anti-Corruption Agency: 2014 First Half Year Results.

Anticorruption Agency of Kazakhstan revealed 16 percent more corruption related crimes for the first half of this year 2014 than for the same period of previous year. Thus, the Agency instituted criminal proceedings against over 140 government officials of various levels, including governors and their deputies. Also more than 1.5 times increased the discovery of facts of embezzlement and bribe-taking by government officials. In spite of all of these efforts of the Anticorruption Agency and Government of Republic of Kazakhstan the level of corruption still remains very high in Kazakhstan.

We remember from last year results that among the most often crimes the Agency had been investigating in 2013 were office abuse (114 cases), forgery by an officials (91 cases), taking and soliciting bribe (57 cases), embezzlement (43 cases).

This and other local news and rumors about comatting corruption and money lundering make us more optimistic in viewing perspetives of Kazakhstan in its taking corruption reduction measures.


August 3, 2014

Kyrgyzstan Compliance Updates - MORFO won the government procurement tender in Kyrgyzstan.

French company MORFO won the government procurement tender in Kyrgyzstan.

MORFO participated to the government procurement tender for services on creating biometrical identification database. The company offered best price and technical solutions. MORFO become the only company who was able to ensure both production of the equipment needed for biometrical identity registration and providing adequate service of them. Government will start biometrical registration in August 16, 2014.



July 22, 2014

Kazakhstan Compliance Update - Head of Competition Protection Agency was Arrested

Mr. Ospanov, Head of Competition Protection Agency in Kazakhstan was recently arrested by Anti-corruption agency. He is accused in advancing of the selected businesses interests. Thus Anti-corruption agency cought Mr. Ospanov in the process of taking USD 300,000 from representative of local natural monopoly company.





July 14, 2014

Kazakhstan Compliance Update - Kazakhstani businessman was taken in hostage by his partners in Kyrgyzstan.

Kazakh businessman become a hostage being seized by his partners in Kyrgyzstan. According to the agreement made between group of Kazakhstani and neighboring Kyrgyzstani businessmen they had to cooperate in selling retail production. After sending a next batch of production to Kazakhstan a Kyrgyzstani group of businessmen had not been paid. Kazakh businessmen explained that that the last batch was stuck on custom on the border and had not been delivered to them. To solve the dispute a partner of Kazakh business group came to Kyrgyzstan where he was seized in hostage by his Kyrgyz partners. They wanted other Kazakh partners to make immediate disbursement of the price of USD $30,000 for the last undelivered batch. After reporting the case to Kyrgyzstani police the hostage businessman was released.

This is not a normal way of solving disputes in Central Asia. However applying to criminals and organized criminal groups with government officials in them is still the way businesses use for their disputes to be settled. This mostly happens because people do not trust courts and do not believe in the effectiveness of the official institutions.



June 2, 2014

Kazakhstan Compliance Update - Large criminal ring, with tax officials involvement, was revealed in Kazakhstan.

It is become a normal today when the tax, or custom, or other agencies' officials are become involved in money laundering or corruption schemes in Kazakhstan. In this big case the Anti-corruption agency uncovered a large tax evading scheme set up by executives of three major alcohol producers along with tax officials.

Three alcohol producers of the southern region, with the “paid approval” of local tax authorities, build up and run systems at their factories that allowed bypassing fiscal calculation of the production volume of the factories. Inspecting tax officials and their ultimate supervisors got into collusion with this businesses to cover the criminal activity. This corruption case has been in existence during last 1.5 years, until it was uncovered by Anti-corruption agency last week. Criminal corruption case was broght against managers of factories and tax officials.



May 30, 2014

Kazakhstan Compliance Update - Court bailiff has taken bribe in exchange for obstructing an execution of court ruling.

Anticorruption agency brought the case against court bailiff who took US $1,200 bribe in exchange for obstructing the execution of court decision. The bailiff agreed to take bribe from losing party in exchange for non-execution of the court ruling about confiscation of property and forfeiture of parental rights.




May 27, 2014

Kazakhstan Compliance Update - The information about luxury gift to Prime Minister was released in Kazakhstan

Some documented news was published in Kazakhstan about luxury gift taken by Prime-Minister of the country. Thus, Republic news agency reported today that Presidents’ son-in-law gifted a new luxury car to the Prime Minister of Kazakhstan. The new car, Range Rover, was reprtedly given to Prime Minister as a birthday gift in June 2013. The news agency named all exact identifications of the car, including its color, milage and current license plate number.



May 13, 2014

Kazakhstan improves court bailiffs work

Court bailiffs in Kazakhstan have always been public officials. Kazakhstan has never had private bailiff service providers allowed. Today the bailiffs are known as one of the most corruptive officials in the country. There are plenty of rent-seeking, power abuse tactics that bailiffs apply during execution of court rulings. One of the bailiffs was punished last week for deliberately neglecting his duty to put restrictions on making transactions with a debtor’s shares. The debtor was able to sell his shares out because of this misconduct.

Now Kazakhstan is changing its legislation to reform the system of bailiffs, allowing private bailiffs services and implementing many other changes to exclude corruption during execution of court orders.


May 8, 2014

Kazakhstan Compliance Updates The amount of corruption in the universites of Kazakhstan is about US $100 million per year

Today Vice-Minister of Education officially recognized that there is a high level (among the top three) of corruption and bribery at universities of Kazakhstan. Professors of the most of the universities in the country are among the lower paid employees. This brings many of them to extort bribes from students in exchange for giving them pass on the exams. Vice Minister brought the unofficial rate of US $275 paid by students for the ‘bundle of exam passes’ to finish one term. The overall amount of corruption at the universities of Kazakhstan is said to be about US $100 million per year. Transparency International established a 7-days anti-corruption courses designed for students.


May 5, 2014

Kazakhstan Compliance Updates - New Criminal Case Against Tax Agency Official

Anticorruption agency has started a criminal corruption case against one more Tax agency official who is accused in misusing his official power in favor of business group (Tastam Expo 2012 Ltd.).

This tax agency official was caught on covering wrongdoings of the mentioned business group. He was corruptly providing protection for the company during government investigations of the business. He falsified some of the results of the investigation, put wrong location of the business into investigation documentation, and forged directors signatures. The business is reported to be involved into money laundering schemes. The amount of bribe he received for his "services" was not disclosed.


April 27, 2014

Tajikistan Compliance Updates. - Two officers of Tajikistani Defence Agency were caught with bribery today.

Two officers of Tajikistani Defence Agency responsible for army recruiting were caught with bribery today. They have been extorting cash from army recruits in exchange for granting them waiver from army duty. They were arrested in the act of taking US $1,000 cash from one recruit. Military Attorney General’s office started investigations on this case.





April 22, 2014

Kyrgyzstan Compliance Updates. - Kyrgyzstan finally abrogated the status limitation on corruption cases in the country.

Kyrgyzstan finally abrogated status limitation on corruption cases in its Criminal Code. Tha was a long way. Several Parliament sessions and votings were held unsuccessfully on this issue before that.

The changes to the Criminal Code were signed by the President of the country today. There was 10 years status limitation on corruption cases in the Criminal Code, including abuse of power, before these changes were taken. Parliament of the country decided the status limitation would adversely affect anticorruption measures which are being actively taken by the government today.

Kyrgyzstan has been doing progress in combatting corrution and the government of the country displays high commitment to fighting corruption.





April 12, 2014

Kyrgyzstan Compliance Updates. - Anticorruption Department of National Security Agency Held Online Q&A Session

Anticorruption Department of National Security Agency held an online Q&A session with public last week. Most of the questions raised during the session were related to bribery in healthcare, educational system and law enforcement agencies.

Most often people were complaining about bribes they had to pay to doctors and nurses to get appropriate treatment in hospitals and healthcare organizations. Most healthcare organization in Kyrgyzstan are still state-owned since Soviet time. This means doctors and nurses are among the lowest paid employees in the county as well as high school teachers, police officers, day cares staff and all other government owned agencies' employees. Being low-paid makes doctors to give privileged service and better care to those patients who can pay grafts for services.

Many concerns were also expressed towards bribes that students have to pay to professors at almost all largest universities in Kyrgyzstan to get pass on exams. For example, one exam pass costs students US $200; while one graduation thesis is about US $500, and so on.

But the biggest problem is that many businesses in Kyrgyzstan are still hiding their profitability and returns to deviate from taxes. Up to 70 percent businesses are hiding their real profits in some industries despite of the lowest tax burden on businesses in Kyrgyzstan comparing neighboring Central Asian countries.

Many other complains expressed before the Anticorruption Department were related corruption in law enforcement agencies, including the sell of vacant positions by higher level officials at most of government agencies, etc.

Comparing other countries in central Asia we see that Kyrgyzstan gets to slowly improve its situation with corruption. Government tries to implement serious changes. The country’s place on Transparency International’s list improved from 164th to 150th for last two years.



April 12, 2014

Compliance Updates. - Uzbekistan Takes Moratorium on Small Businesses Inspection

President of the country took special decree which places three years ban on any inspections of small businesses by government agencies. The restriction shall be in act till January 2017. Small businesses have to pay their taxes in due way – this is the only condition for them to get protection from inspections under this decree.

The moratorium on inspections is purposed to improve investment attractiveness of Uzbekistan for businesses.



April 4, 2014

Kazakhstan Compliance Updates. - Prime-Minister Change. What to expect?

Previous Prime-Minister of Kazakhstan, Mr. Masimov, was re-assigned today again as a Prime-Minister by the President of Kazakhstan – instead of Mr. Ahmetov, who resigned yesterday. Thanks God - the Government is almost the same. No sweeping changes can be forecasted in terms of “rules of game” for international businesses in Kazakhstan.

No one can tell true reasons of prime-minister change. President decides everything in this country.

But we can make three assumptions as for reasons of this quiet change of Prime-Minister.

First assumption: This new Prime–Minister is able to better represent and counter-attack Russia’s hard pressure to Kazakhstan in the regional Customs and Eurasian Economic unions with Russia.

Second assumption: This new Prime-Minister has a good experience of using nation’s financial reserve fund, which is to be used this time to support the economy again.

Third assumption: The change of Pirme-Minister might be related to that the President may be preparing some very serious changes like his own resignation. This scenario may be a critical risk to consider about for international businesses. The reason for this assumtion is that Russian President presses Kazakhstani aging President to assign a new leader (successor) for the country to prevent uncertainties for Russia in the region.



April 3, 2014

Government Change in Kazakhstan

The Prime Minister of Kazakhstan submitted his voluntary resignation yesterday. This means resignation of the entire government.

A new Prime-Minister’s name is expected to be announced today. Some other serious changes in the President’s Administration and Parliament, and other government agencies are expected to happen according to rumors.


March 28, 2014

Uzbekistan Compliance Updates. - Telia Sonera supposedly paid 240 million EURO bribe for entering Uzbekistan's telecommunications market

Telia Sonera, joint Swedish and Finnish telecommunication company, is being charged with bribing high government officials in Uzbekistan to gain business on telecommunications market of the country. Swedish attorneys started investigations on Telia Soners’ Uzbekistani corruption in 2012. As a result of investigations Swedish Attorney report that about 240 million EURO may have been paid to the bank accounts of Ms. Karimova, daughter of the President of Uzbekistan.

Investigating Attorneys say that Telia Sonera’s executive management were apparently aware of this bribery in Uzbekistan, which started its business in Uzbekistan in 2007. Investigations showed that President’s daughter were leading a negotiation between Government of Uzbekistan and Telia Sonera. She was a beneficiary owner of local telecommunications company which become a partner at a new joint venture with Telia Sonera.

Ms. Karimova’s bank account at European Nordea bank with 22 million EURO on it was arrested today.


March 27, 2014

Kyrgyzstan Compliance Updates. - Corruption survey in Kyrgyzstan

Recent corruption survey in Kyrgyzstan showed that 70 percent of respondents consider corruption as a big problem. About 60 percent of respondents consider The Department of Traffic and Road Patrol is the most corruptive government agency along with its mother Agency – Ministry of Internal Affairs (Police Department). And 64 percent of respondents does not trust judicial system.

Almost the same number of respondents (58 percent) says that Universities conduct corruptive practices as well.

About 80 percent respondents trust international companies more than local companies and financial institutions.

And around 80 percent respondents think that government’s anti-corruption measures are very insufficient.


March 26, 2014

Kyrgyzstan Compliance Updates. - Results of Briefing of the Anti-corrution Department

Anti-corruption Department of Kyrgyzstan declared today that the average officer of Tax Agency takes about US $3,600 bribes per month, which is a direct damage to the country’s budget.

Also the Department said that people in the country still do not trust government anti-corruption measures, and percept its anti-corruption measures as an internal clashes between government officials and agencies. People of Kyrgyzstan also inclined to view anti-corruption measures as a government agencies’ attacks to a businesses owners, which are in reality paid by another businesses.

The Department declared its plans to start its targeted battle of corruption in several government agencies, including Traffic and Road Patrol Department, Department of Geology, and Department of Energy Resources.



March 25, 2014

Kazakhstan Compliance Updates. - Anti-corruption agency started to develop measures purposed to find out real owners of Kazakhstani businesses

Anti-corruption agency started to develop measures purposed to find out real owners of Kazakhstani businesses. Majority of profitable businesses working in Kazakhstan extensively apply offshore jurisdictions to hide their beneficiary owners and their returns. ‘Offshore jurisdiction help businesses to launder money back in Kazakhstan in the form of foreign investments’ says Agency representative.

But truth is, the problem is complex. To be honest, we can not blame businesses only. Businesses have to hide their owners and their returns for many reasons. We think that by taking the mentioned measures Anti-corruption agency is trying to open up for themselves real owners of Kazakhstani profitable businesses – only to find out whom to attack further for new corrupted returns for themselves. The pressure of Government corruption, extortion of profit and share by government agencies are unbearable for many businesses today.


March 19, 2014

Kazakhstani Anti-corruption Commission meeting in Almaty

On March 19, 2014, the meeting of Kazakhstani Anti-corruption Commission will be held in Anti-corruption Agency of Kazakhstan in Almaty.

The meeting will be starting at 3 pm Almaty time at the following address: 37 Seifulin Street, Almaty, Kazakhstan.

Agenda of the meeting consists two major issues.

#1 issue: “Progress made by The Department of Anti-corruption Agency in 2013 in the way of fulfilling Anti-corruption Plan for 2011-2015.

#2 issue: “Protecting businesses from unlawful intervention of government and local officials.

The agency officials, Mr. Bektenov and Mr. Zhumagali will also talk about Kazakhstani Private Business’s Charter on Combatting Corruption, which was initiated by Parliament of Kazakhstan.

Members of Parliament, Business Associations and other guests and speakers is going to take part on the event.

The event is free. All questions regarding the event can be addressed by calling to the following telephone numbers: +7 (727) 90-92-80, +7 (727) 90-92-89.

If you need more detailed report on this or other news, please, do not hesitate to reach us out by emailing to cga@sarsenov-advisory.com.


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March 15, 2014

Kazakhstan Compliance Updates. - Secret personal emails between Attorney General of Kazakhstan and Toyota Tsusho revealed.

Some personal emails between Attorney General of Kazakhstan and Toyota Tsusho Kazakhstan was revealed today.

In those emails, which were written during the last several years, one large business owner (Toyota’s local distributor) periodically asks support from Attorney General, calling him by first name.
In one email the businessman was attaching a tax enforcement letter from Tax agency requiring payment of multimillion financial penalties. The businessman asked Attorney General for protection from Tax agency. After some email exchanges between them, the businessman was thanking Attorney General for his help, noting that tax penalties were revoked. A luxury Toyota car’s picture was attached to that email saying: ‘I do not know how to thank you, but will this do for you? See the picture below’.

From other emails we see Attorney General is solving other problems of the same Toyota business group, including a big judicial case against this Toyota in Kazakhstan. As a ‘Thank you’ for this time Attorney General was offered two more luxury Toyota cars and US $200,000 cash, which Attorney General put onto his safe deposit box in a local Kazkommerzbank.



March 10, 2014


Kazakhstan Compliance Updates. - Tax Agency's inspector was arrested for taking cash bribe from businesses.

Anti-corruption agency arrested a Tax Agency's inspector in Almaty. She had colluded with some business companies in Almaty to cover their illegal, tax evading and money laundering structures, which she was aware of. She was corruptly consulting and arranging all tax issues of the business group within the Tax Agency. The total amount of damage which this collusion caused to the government in the form of tax evasion reached US $2.5 million.

The inspector was caught in the moment she was being paid her “honorarium” of about US $120,000 on the street, inside her car. We think other tax officers, of higher ranking, was standing behind this corruption scheme in Tax Agency. Usually people from higher hierarchy of the Tax Agency arrange such schemes, find target businesses, then start to investigate target business to find any tax violations in their activity, and then, if violations found, tax officers make "an offer to cooperate", where lower level inspectos are simply physically execute their job covering violations and consulting. Nothing is done there without approval from above level.

This type of solving tax, custom, government permit, and registration issues are still very popular for all businesses in Kazakhstan and other Central Asian countries. But so far in Kazakhstan and Kyrgyzstan we see some improvements in this direction. The reasons for improvement are different in both countries, however, we recommend to keep checks on tax, custom, real estate and other property registrations and permits obtaining by your local offices. Pay close attention to such moments like time taken to obtain the license or permit, costs paid, people involved in obtaining (consultants, intermediaries), other moments depending on the situation.




March 4, 2014


Kazakhstan Compliance Updates. - Shell company’s manager in Kazakhstan, citizen of UK, was arrested with child pornography.

Top manager employee, citizen of UK, representing Shell corporation at oil fields in western Kazakhstan, was arrested with child pornography in Kazakhstan. He was making shootings of young girls of 12 -17 years old.

Local Police said on the briefing: ‘At the moment of his arresting he tried to melt all the evidences, which he saved on his flesh memory, into a microwave’. The manager confessed he was making “photos” of young girls, but as he explained - ‘it was for personal use’. However, the police has already evidenced two cases of him disseminating 'child pornography'.

Starting last January seven mothers in Western Kazakhstan applied to a local police office complaining about foreign man shooting their daughters. This Shell’s employee was working by 28 days shifts.

This and other similar accidents happened for only one reason – not accounting by international companies for their risks in Central Asia. Many of these and other types of compliance risks stem from huge differences in culture. We admit that some seemingly provocative behavior might have been displayed on the local victims side, which this employee qualified wrong. For example, local girls might wanted to practice their English, for which purpose they always try to attract and, by all means, become friends to any international English speaking guys. There are many other reasons we can bring to display how mistakes and confusions happen locally. But this one obviously become a criminal "child pornography" case.

We also admit that another series of mistakes will might be done in the course of this company trying to close the criminal case locally.




February 25, 2014

The Government started reviewing the list of permissions, certificates, licenses.

The Government has already started reviewing the list to bring the total number of documents down to 6. This should reduce corruption exposure for international businesses.

Today the number of all documents needed to comply with import-export regulations is 12. It usually takes 21 days in average to obtain all those 12 documents. So we hope this will put at ease international companies in Kazakhstan and decrease foreign corruption risk to them.

The major problem with Kazakhstan customs during importing is a high corruption on the border. Because of big list of documents required and difficulties to obtaining them, - goods are usually stuck on the border, - until importing party is urged to bribe custom officials for expediting.



February 16, 2014


Some protest actions with crowds on the streets in Almaty (former capital of Kazakhstan) happened during last two days.

On Tuesday, February 11, government dropped the value of national currency tenge 20% down vs. US dollar. People already called the day “black Tuesday”.

Some protest actions with crowds on the streets in Almaty (former capital of Kazakhstan) happened during last two days. Social networks and media burst with resentment. People’s earnings and savings were devalued 20-25% in a matter of one day. Prices soard up immediately.

The major impact is going to be on international importers to Kazakhstan, especially pharmaceutical companies. Forecasts are that prices of imported pharmaceutical products will undergo up to 60 % increase in the nearest time. The custom costs for pharmaceutical companies might go up 40%. All international companies importing goods to Kazakhstan should re-arrange their costs and pricing policies.

We recommend to keep an eye on sales departments, local vendors and distributors as they will want to bribe custom officials and lower their costs by all other means.



February 13, 2014


Company was told to pay US $4,000 to the Head of Antitrust agency for obtaining official permission.

Head of Antitrust agency at Kyzylorda district, central region of Kazakhstan, was arrested with allegations in taking bribe.

Mr. Aymurzaev, regional Head of Antitrust agency of Kyzylorda district, was charged with the allegation of soliciting US $4,000 bribe in cash in exchange for "positive decision" on issuing permission.

One of the companies, regional state-owned enterprise, - sanitation, cleaning and other regional services provider, - wanted to obtain Antitrust agency’s permission to continue working with its subcontractor. The company was told by Antitrust agency to pay US $4,000 as a "price" for that permission. The bribe was allegedly paid personally to the Antitrust agency’s local Head.


February 11, 2014

Vice President of Kazakhstan Space (State Owned Corporation) took more than US $1,3 million in bribe and laundered the money.

After completing probes on Kazakhstan Space Company (State Owned Corporation) Attorney General reported that Vice President of Kazakhstan Space was soliciting bribes in the form of cash from its largest contractor firm (SK Kulager Ltd).

Mr. Murzakulov during one year of his being on Vice-President position of Kazakhstan Space, from August 2012 to August 2013, took personal advantage and was abusing of his position. He was extorting cash bribe by threatening the major contractor to apply contract penalties to him and by termination of contract.

Cash was extorted from that contractor and was paid on the monthly basis to Vice-President. All cash payments were taken either by him personally or by third parties used for this purpose. During one year of his tenure the overall amount of cash bribes was around US $1,3 million. That money had been laundered immediately as they were taken. Vice-President was investing all money into a luxury house and two expensive apartments, and several land plots. All that acquisitions had been done through his daughter, his wife and other relatives.

Vice President of Kazakhstan Space is an important high profile governmental position in Kazakhstan, which makes this type of violations serious corruption crime.





February 3, 2014


Kazakhstan Compliance Updates. - The Anti-Corruption Agency and Chamber of Kazakhstani Entrepreneurs made a Memorandum of Cooperation.

Under the Memorandum the Anti-corruption agency and The Chamber of Entrepreneurs agreed to take mutual steps to prevent corruption in doing business in Kazakhstan. The purpose of the document was to protect businesses from illegal intervention of supervising government officials and agencies into the business activities, and from creating illegal barriers in the course of doing business. The parties agreed to timely exchange the information needed to protect entrepreneurs and prevent corruption crimes.

For the last two years the number of illegal interruptions into business activities by supervising agencies was reduced from 1,715 to 340. Supervising government official abuse their power and create various problems for businesses which are then solved by soliciting bribes from entrepreneurs.


Kazakhstan Compliance Updates. - The Anti Corruption Agency revealed $1,9 million tunneling at Kaspi Sea University.

The Anti-corruption agency started probes on embezzlement of $1,9 million funds at Caspian University in Kazakhstan. The CFO and some other employees of the University allegedly stole the money. They said to be staying in conspiracy. The CFO supposedly had been falsifying bank statements and check books for several years since July, 2012.


Kazakhstan Compliance Updates. - Medical clinic have been doing monthly salary disbursements to non-existing employees

Southern Department of Anti-corruption Agency brought a legal case against CEO of Medical clinic of Shymkent city for embezzlement. The clinic is State-Owned. After financial audits at the clinic payrolls to non-existent labor was found out. The clinic was paying monthly salaries to non-existing employees. Names of former employees of the clinic were used for this purpose to misguide the wrongdoing. Investigations showed that the clinic’s CEO was disbursing the salaries to his own checking accounts. 23 million tenge (around US $150,000 ) have been disbursed in total to his own account.

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January 29, 2014

Kazakhstan Compliance Updates. - Kazakhstan Postal Service employees stole funds from their client accounts

Anti-corruption agency in Kazakhstan instituted a legal case against group of employees of Postal Service Agency of Kazakhstan (KazPost). As a result of investigations carried out by KazPost it was discovered that a group of employees had been illegally cashing out funds from client accounts. One of the KazPost’s regional branch’s manager got into plot with several subordinate cashiers and together they were continually forged out money withdrawal orders. 2,5 million tenge (around US $20 thousand) have been stolen this way before the crime was revealed.

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January 28, 2014

Kazakhstan Compliance Updates. - Mayors and their Deputies are the most corrupted government officials in Kazakhstan.

Anti-corruption Agency of Kazakhstan has named the most corrupted agencies and officials in 2013. The Agency reported that 230 of about 2,000 corruption crimes had been committed by Mayors and their Deputies. The number of cases with Mayors and their Deputies is much higher than corruption crimes by other government agencies. For example, 32 corruption crimes were committed with public health administration officials involvement; 17 crimes were committed with Police Department officials involvement. Tax Agency, Justice Department and Judges have each 13 corruption crimes on their accounts. Farm Ministry has 8 corruption crimes committed by its officials.

Anti-corruption agency also reported that among the most often crimes they had been investigating in 2013 were office abuse (114 cases), forgery by an officials (91 cases), taking and soliciting bribe (57 cases), embezzlement (43 cases).

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January 22, 2014


Uzbekistan Compliance Updates. People who want to serve in army are being solicited bribe in Uzbekistan

People in Uzbekistan started to complain about being solicited bribe to be admitted for serving in Uzbek military forces. The amount of bribe solicited from young man who wants to be admitted to serve in army is about US $300 - $500, and sometimes more. Graft is mostly required by medical doctors and military officials during preliminary medical examinations, where young people come to be tested on their fitness for serving in army. Negative results of medical examination means poor health condition, which bans young people from serving in army. Those results are artificially been made negative by doctors and officials to extort bribe.

Serving in Uzbek army gives some credits in future to young people when they apply for enrollment to local colleges and universities. There some other benefits too, like possibility to get a job in enforcement agencies.

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January 19, 2014

Kazakhstan Compliance Updates. - About 200 officials have been convicted in 2013 for corruption in Kazakhstan.

About 200 officials have been convicted in 2013 because for various corruption crimes. The number is 30 per cent more than in 2012.

Three times more than in previous year was a number of detected corruption cases in government procurements. The number has risen from 371 cases in 2012 to 495 in 2013.

108 cases of long time system corruption crimes were revealed.

Of 10,094 overall corruption cases detected 2,574 cases were involved in serious and gravest crimes.

The source of this news, is an article В Казахстане за коррупцию осуждены более 200 руководителей (in Russian), in CA-NEWS (KG).

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January 15, 2014

Kyrgyzstan Compliance Updates. - Chief of Traffic Police explained what causes corruption in Traffic Police Department of Kyrgyzstan.

In his report today before Parliament Chief of Traffic Police Department of Kyrgyzstan explained what causes corruption in Traffic Police Department. He named low payroll the main factor causing corruption in his office. Officers of Traffic Department pay for gasoline out of pocket. They have to pay by their own to buy uniforms for themselves. 44 million Kyrgyz soms (about US $1,000,000) were allocated by the government for this purposes in 2013 but only 2.5 million had been disbursed (US $50,000). ‘This is what causes corruption in Traffic Police Department’, he said.

The source of this news, is an article Глава ДПС Т.Исаев объяснил причины коррупции в ведомстве (in Russian), in CA-NEWS (KG).

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January 10, 2014

Kazakhstan Compliance Updates. The Coca-Cola distributor in Kazakhstan is claiming managers of Coca-Cola have been paid US $60,000 commercial bribe.

The CEO of local distributor of Coca-Cola went out to street carrying a banner “Weed out corruption at Coca-Cola!”

Local distributor of Coca-Cola Almaty Bottlers is blaming Coca-Cola factory in Almaty, biggest city of Kazakhstan, in commercial bribery.

CEO of Bastau-Taldikurgan, Ltd., a distributor of Coca Cola products, said Coca-Cola factory terminated contract with his company without any due notice in advance, in outright violation of distribution contract.

His company have been a single large distributor for the neighboring biggest city, Taldikurgan.

But he claims that local managers of Coca-Cola factory have been paid commercial bribe of $60,000 US dollars for changing a current distributor to a new one. His company is suffering damages, but he refuses to apply local court since he doesn’t trust local courts could ever make right decision.

The source of this news, is an article ‘Weed out corruption at Coca-Cola!’ (in Russian), in RESPUBLICA newspaper, 01/08/2014, electronic version of which can be found at http://www.respublika-kz.info/news/society/34679/

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January 8, 2014

Kazakhstan Compliance Updates. - Anti-Corruption Agency Unveils Organized Corruption Activity in Mayor’s Administration.

One of advisers for Mayor of Pavlodar city was caught by Anti-corruption agency last December. He was caught during the process of taking bribe around US $100,000, which was said to be the first tranche. At the moment when he was arrested the adviser was sitting inside other party’s car, counting money given by another party, - private company representative.

Previous allegations of Anti-corruption Agency that the adviser was not ultimate “beneficiary” of the bribe taken have been gaining proves. The city court revealed today that bribe was offered in exchange for granting government contract, that was a construction of public high school. Of two applied construction firms, one SDE, Ltd, private construction firm, was recognized a winner and was granted a government contract.

Mayor of the city resigned after his advisor was arrested. Another official, Deputy Mayor, run away, escaping country. During search of Deputy Mayor’s office EUR 500,000 cash was discovered.

A winning construction firm’s CEO was arrested too and charged with bribe offering.

The source of this news, is an article ‘Мафиози окопались в областном акимате’ (in Russian)), in RESPUBLICA newspaper, which can be found athttp://www.respublika-kz.info/news/society/34658/

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January 1, 2014

Uzbekistan Compliance Updates. - Uzbekistan government solicits businesses to pay for holiday celebrations and government events.

Mayor of Samarkand, the second largest city of Uzbekistan, issued a Decree demanding local businesses to “sacrifice” funds. The collected funds were said to be used for decoration of the city streets and for organizing holiday events in the city.

Soliciting financial resources from businesses in Uzbekistan has become normal practice. Government across the country tells businesses to pay for various country wide events (holidays, festivals. etc.). In last fall mayor of Tashkent, the capital of Uzbekistan, told local businesses to “sacrifice” about US $1,100 each to an account of a pointed company (Mega Super Food) which (the company) was supporting cotton collecting campaign in the country.

It is also reported that the Cabinet has demanded each business to pay US $145,000 to organize a traditional new year Christmas tree event that takes place annually at the palace of Uzbekistan’s President.

The source of this news, is an article ‘В Узбекистане с предпринимателей в принудительном порядке собирают деньги на проведение новогодних торжеств’ (in Russian)), on CA-NEWS (UZ) website, which can be found at http://ca-news.org/news:1092531/

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December 30, 2013

Uzbekistan Compliance Updates. - Uzbekistan businessman attempted to bribe Russian officer.

Uzbek businessman tried to bribe the financial crimes police officer in city of Tula, Russia. Citizen of Uzbekistan, 28, accused in offering money to police officer in exchange for covering violations that were discovered in his restaurant business in Russia. Accused was summoned to local police office where he physically handed over cash to officer of Financial Crimes Investigation Department .

New corruption case started against businessman, while police office is deciding whether he should be taken into custody.

The source of this news, is an article ‘В Туле гражданин Узбекистана подозревается в даче взятки сотруднику полиции’ (in Russian)), on CA-NEWS (UZ) website, which can be found at http://ca-news.org/news:1092461/

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December 28, 2013

Kazakhstan Compliance Updates. - Kazakhstan is establishing new organization for government procurements.

Kazakhstan is establishing new government procurement organization. The step is taken to stop corruption in procurements. New procurement organization, state-owned, will carry out all government procurements across the country. For the last 9 months they discovered 1,400 violations of government procurement regulations causing about US $450 million losses for government.

The source of this news, is an article ‘Единый организатор государственных закупок может стать заслоном для коррупции’ (in Russian)), on ASTANA.TV website, which can be found at http://astanatv.kz/news/show/id/15962.html

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December 27, 2013

Tajikistan Compliance Updates. – Russian Pulkovo airlines officer illegally used his authority to help smugglers in Dushanbe.

Custom and Border protection service of Tajikistan detained smuggling of about US $809,000 through Tajik boarder. One employee of Russian Pulkovo airlines helped to get the money package to airplane. The aircraft was taking off to Russia. The employee illegally used his special right to help smugglers to get through the boarder. He personally carried the money package with about (US $809,000) through the boarder using his free passing right. The officer and two others were arrested on the board.

Attorney General’s office instituted legal proceedings and started investigation on this case.

The source of this news, is an article ‘В Душанбе задержан представитель Пулковских авиалиний по подозрению в соучастии контрабанды $809 тыс’ (in Russian)), at CA-NEWS (TJ), which can be found at http://ca-news.org/news:1093174/

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December 26, 2013

Kazakhstan Compliance Updates. - Anti-Corruption Agency Charged Deputy Chief of Farm Ministry with taking US $100,000 bribe.

Anti-Corruption Agency Charged Deputy Chief of Farm Ministry with taking US $100,000 bribe.

After careful investigations carried out by Anti-Corruption Agency they charged with corruption and arrested Deputy of Government Ministry of Farm. Under the statement of Anti-corruption Agency the official was paid US $100,000 bribe by unnamed entrepreneur in exchange for illegally arranging him a winner in government procurement bids. The official was arrested.

The source of this news, is an article ‘Финансовая полиция задержала вице-министра сельского хозяйства’ (in Russian)), at Anti-corruption Agency website, which can be found at http://finpol.gov.kz/rus/info/new/?cid=0&rid=14030

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December 20, 2013

Kazakhstan Compliance Updates. - Mayor’s advisor was caught by Anti-corruption agency in the act of taking bribe (US $100,000).

Senior adviser for the city of Pavlodar’s Mayor was caught by the Kazakhstani Anti-corruption agency during the process of taking bribe. The amount of bribe was around US $100,000, which said to be the first tranche. The adviser was sitting inside other party’s car, calculating the money, at the moment when he was arrested.

The bribe was supposedly offered for granting the right of construction work in the Pavlodar city by Mayor of the city to one of construction firms.

Suspicions are the adviser was not ultimate “beneficiary” of the bribe taken. Investigators started to interrogate Mayor’s Deputy.

The source of this news, is an article ‘Немножко недосидел до пенсии’ (in Russian)), in RESPUBLICA newspaper, which can be found at http://www.respublika-kaz.info/news/politics/34458/

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December 20, 2013

Tajikistan Compliance Updates. - German investigation authorities detected luxury cars stolen in Germany being used by people closely related to Tajikistan’s President.

Using GPS devices German investigation authorities found out that 200 cars stolen in Germany are being located on the territory of Central Asian country Tajikistan. In addition to that, German authorities determined that most of those stolen cars are in the use of people closely related to Tajikistan’s President Mr. Rahmon.

Tajikistan persistently declines to respond or comment official claims made by German authorities about stolen cars.

The source of this news, is an article ‘Близкие к президенту Таджикистана люди ездят на авто, которые числятся краденными в ФРГ (in Russian)) in CA-NEWS (KG), which can be found at http://ca-news.org/news:1092588/

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December 19, 2013

Kazakhstan Compliance Updates. - Executives of Kazakhstani railway company fraudulently wanted to sell out two of company’s locomotives.

Two executives of railway company fraudulently wanted to sell out two of company’s locomotives in Russia. The executives arranged to send two of company’s locomotives across the border to Russia. The locomotives were directed to Bryansk region of Southern Russia to have maintenance works.

However the executives arranged to falsify locomotives’ original identification documentation and had locomotives’ on-board identification numbers illegally erased.

National Anti-corruption Agency started investigations on this case. The company, Railway Company LLC, is a state-owned enterprise which belongs to Government of Kazakhstan.

The source of this news, is an article ‘Должностные лица Желдоркомпании подозреваются в вывозе в РФ двух тепловозов - финпол (in Russian)) in CA-NEWS (KG), which can be found at http://ca-news.org/news:1092276/


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December 19, 2013

Kyrgyzstan Compliance Updates. - Attorney General of Kyrgyzstan says there are corruption factors in the Regulation No 288 on allocating state-owned land in Bishkek.

Attorney General of Kyrgyzstan says there are corruption factors in the Regulation No 288 on allocating state-owned land plots in Bishkek. He says that under current version of the regulation local authorities in Bishkek, capital of Kyrgyzstan, has the right to legally sell out state-owned lands, which contradicts current laws.

Meanwhile Bishkek authorities have been allocating state owned land plots since 2011. The capital’s Land Committees’ work on allocating state-owned lands to private owners has been suspended until this legal confusion is solved.

The source of this news, is an article (‘МинистрюстицииА.Шыкмаматовсчитает, чтовпостановленииБишкекскогогоркенеша №288, регулирующеговыдачуземель, естькоррупциогенныйфактор (in Russian)) in CA-NEWS (KG), which can be found at http://ca-news.org/news:1092304/


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December 18, 2013

Kyrgyzstan Compliance Updates. - Kyrgyz Parliament voted against status of limitation in respect of corruption and power abuse.

Today Kyrgyz Parliament voted at its first reading on removing statute of limitation in respect of crimes like corruption, power abuse, and treason.

64% percent of lawmakers voted for removing statute of limitation towards corruption, power abuse and treason.

The source of this news is an article (‘ЖК одобрил отмену срока давности по преступлениям, предусмотренным статьями Госизмена, Коррупция, Злоупотребление должностным положением (in Russian)) in CA-NEWS (KG), which can be found at http://ca-news.org/news:1092369/


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December 18, 2013

Kyrgyzstan Compliance Updates. - Anti-corruption Committee of Kyrgyzstan plans to upload real videos with bribe taking on its website.

Kyrgyzstan's Anti-corruption Committee had a meeting today. The committee initiates to start uploading real videos with bribe taking to its website. ‘There are lots of videos, we will upload most serious of them’ Chairman said. Also videos are planned to be calling from people who are facing corruption situations.

The source of this news, an article (‘Экспертный совет по противодействию коррупции намерен публиковать видеозаписи, на которых видно, как берут взятки’ (in Russian)) in CA-NEWS (KG), which can be found at http://ca-news.org/news:1092105/

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December 17, 2013

Tajikistan Compliance Updates. - Tajikistani author has been interrogated by national securities agency (KGB) for his book containing government criticism for bribery, corruption and nepotism in Tajikistan.

Tajikistani author has been interrogated by National securities (KGB) for his book about corruption in the country and for government criticism.

The author, Mr. Abuyev, wanted to publish his new book about realities in Tajikistan, labor migration and corruption. He says the book is about real life of real people. In his book he also criticizes government for bribery, corruption and nepotism.

The author says he had been brought to KGB office and interrogated. He had been asked about who ordered and financed such book. The scripts with digital files had been confiscated. Author was accuses in destructive criticism insulting Tajikistan nation.

The source of this news, an article (‘В Таджикистане писателя обвинили в оскорблении народа’ (in Russian)), can be found at http://ca-news.org/news:1091844/

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December 16, 2013

Kyrgyzstan Compliance Updates. - We can not jail every single corrupted official in Kyrgyzstan.

‘We can not jail every single corrupted official, but we have to continue with our anti-corruption measures,’ country President Mr. Almaz Atambayev said on his year end final press conference.

He called to fight both corruption and factors that cause corruption in Kyrgyzstan. ‘We have to prevent using of illegal business schemes in the country,’ he said.

‘Even if we are not noticing huge outcomes of anti-corruption measures so far fighting corruption in Kyrgyzstan has already been bringing good results, especially for grassroots’, President concluded.

The source of this news, an article (‘А.Атамбаев: Удалось посеять смятение среди коррупционеров’ (in Russian)), can be found at http://ca-news.org/news:1091930/

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December 16, 2013

Kyrgyzstan Compliance Updates. – Employees of Kyrgyz Coal State Enterprise tried to steal extracted coal from company’s mine.

Coal carrier trucks drivers at Kyrgyz coal company, Kyrgyz Coal State Enterprise, tried to steal extracted coal from company’s mine.

Six fully loaded trucks have been stopped by company’s other employees at mine when those trucks were driving out of the field.

Drivers tried to unload trucks before the case was reported to police. The drivers say they had a local branch supervisors’ direct approval.

The source of this news is an article (‘В местности Кара-Кече задержаны 6 автомобилей, незаконно вывозивших уголь после обвала (in Russian)) which can be found at http://ca-news.org/news:1092042/

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December 16, 2013

Kazakhstan Compliance Updates. - 1,333 cases of corruption has been investigated during 2013

President of Kazakhstan reported that country improves its anti-corruption legislation, reduces all possible contacts of applicants for public services with government officials, increases government officials’ salaries – all to fight corruption in Kazakhstan.

Chairman of Financial and Corruption Crimes Investigation Agency (FCCIA) reported that it intensively cooperates with various international organization on anti-corruption measures in Kazakhstan.

1,333 cases of corruption has been investigated so far during this year in relation to 900 individuals, including 120 government officials.

The source of this news is an article (‘Президент провел встречу с председателем Агентства по борьбе с экономической и коррупционной преступностью Рашидом Тусупбековым’ (in Russian)) which can be found at http://www.zakon.kz/4590030-ne-nuzhno-iskusstvenno-podtjagivat.html

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December 15, 2013

Uzbekistan Compliance Updates. - TeliaSonera corruption allegations in Uzbekistan are unfounded

TeliaSonera, international telecommunication company, declared that the corruption allegations directed at TeliaSonera and related to its operations in Uzbekistan are unfounded. The claims that the allocation of frequencies and licenses in Uzbekistan were not handled in a correct manner by the authorities are wrong. The Stockholm District Court dismissed the public prosecutor's request for a supplementary embargo of SEK 1.8 billion tied to bribery. Furthermore, company have received confirmation from the Uzbek authorities that the allocation of frequencies and licenses has been handled correctly. (see press release at http://www.teliasonera.com/en/newsroom/press-releases/2012/12/unfounded-corruption-allegations-against-teliasonera/)

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December 14, 2013

Uzbekistan Compliance Updates. - TeliaSonera fired four of its executives

Kazakhstani newspaper says that TeliaSonera fired four of its executives in relation to its operations in Uzbekistan. This measure by company’s board was related to the allegations of corruption case where company supposedly made hundreds of million dollar payments to unnamed people related to Uzbekistan President’s daughter, Gulnara Karimova. The payments were allegedly made for entering Uzbekistan’s telecommunications market. The source of this news is an article (‘TeliaSonera уволила еще четырех руководителей’ (in Russian)) can be found at http://www.respublika-kaz.info/news/politics/34190/

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December 13, 2013

Kazakhstan Compliance Updates. - Corruption Crimes Investigation Department (CCID) suggests limiting of cash withdrawals amount for businesses and individuals.

Head of Corruption Crimes Investigation Department (CCID) of Financial Crimes Investigation Agency (FCIA) of Kazakhstan, Mr. Shakenov, suggests to limit the amount of funds companies and individuals are allowed to cash from their checking accounts in Kazakhstan.

For individuals this limit is suggested to be up to 3,000 times of Monthly Calculation Indexes (MCI) (each MCI is equal to US $11.23), which is 5,2 million tenge (about US $33,500) per person.

The Agency’s suggested limitation of cash withdrawal for companies is 10,000 times of MCI, which is 17,3 million tenge (or about US $115,500).

Suggested measures, on the Agency’s representative opinion, should help Agency in fighting corruption in Kazakhstan and would enhance the businesses transparency.

These and other anti-corruption suggestions were made by Corruption Crimes Investigation Department (CCID) during the Public Anti-Corruption Committee’s meeting.

The source of this news is an article (‘Фискалы работают не на результат, а на показуху’ (in Russian)) which can be found at http://www.respublika-kaz.info/news/society/34387/


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December 12, 2013

Uzbekistan Compliance Updates. – Government starts investigations against Tethys Petroleum in Uzbekistan

Uzbekistan authorities started investigations against Tethys Petroleum, international oil and gas company, having its operations in Uzbekistan. The government suspects misappropriation of oil by Tethys Petroleum amounted to US $30-40 million.

If the government proves its allegations against company, this would be one more case of international investor in Uzbekistan who has become subject to pressure by Uzbekistan’s government.

One of the company’s senior employees has already been arrested.

The source of this news is an article (‘Компанию Тетис Петролеум обвиняют в краже нефти в Узбекистане’ (in Russian)) by РИА Новости which can be found at http://www.ca-news.org/news:1090760/

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December 11, 2013

Kazakhstan Compliance Updates. - 26 fraudulently obtained drivers licenses have been detected by Attorney General’s office in Kyzylorda city, Kazakhstan

26 fraudulently obtained drivers licenses have been detected and seized by Attorney General’s office in Kyzylorda city, Kazakhstan. Attorney’s office has revealed that unlike other cites of Kazakhstan people here were able to obtain drivers licenses by paying bribes to local officials and without due tests and examinations having been hold.

‘This is the main reason why number of car traffic accidents has been dramatically increasing here’ - said Attorney General’s local office representative. According to official date the number of traffic accidents in this city increased 2.5 times comparing last year.

Among those who have been found obtaining drivers licenses in this city were people with mental disease and alcohol abuse.

This article was translated in its substance from Russian. The full version (in Russian) can be found at BNews.kz or http://www.zakon.kz/4590102-v-kyzylorde-u-avtovladelcev-izjato.html


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December 10, 2013

Tajikistan Compliance Updates. - National Security Agency detained police officer trying to smuggle 23 pound of marihuana.

National Security Agency detained police officer, captain Mansur Halmurodov, in Tajikistan who tried to smuggle 23 pounds of marihuana on his personal car. The police officer allegedly was trying to pass Tajikistan’s boarder to Kyrgyzstan.

The source of this news is an article (‘В Таджикистане задержан капитан милиции с 11,5 кг наркотиков, предназначенных для переброски в Кыргызстан’ (in Russian)) which can be found at http://www.ca-news.org/news:1090740/

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December 9, 2013

Kazakhstan Compliance Updates. - Deputy Chief of Kazakhstan’s Air Force has been convicted for embezzlement of over $900,000

Deputy Chief of Kazakhstan’s Air Force has been convicted for embezzlement. He was charged with embezzling of 140 million tenge (over $900 thousand US dollars) of government funds. The judge adjudicated him for serving 8.5 years in prison.

The convicted had been approving government procurement of defective parts for Kazakhstani surface-to-air (SAM) missile systems.

Another man who managed a supplier firm of those defective parts has been charged with fraud and collusion with convicted Air Force Deputy Chief.

Russian secret service was helping in investigating this case.

This article was translated in its substance from Russian. The full version (in Russian) can be found at ИА Новости-Казахстан or http://www.zakon.kz/4590042-jeks-zamestitel-glavkoma-silami.html

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November 30, 2013.

Kazakhstan Compliance Updates. - Employees at the largest Kazakhstani and Central Asian confectionary producer (Rahat Corporation) are stealing supplies

Employees at the largest Kazakhstani and Central Asian confectionary producer (Rahat Corporation) are stealing supplies (sugar, cacao, etc.) from the company.

After a recent announcement that company is selling majority of its shares to foreign investor from South Korea, rumors begin circulating that company’s long time CEO is going to leave the company.

With this rumor spreading among employees and managers, and when big layoff has been started in the company by new management the situation with employees stealing property is getting to worsen. The massive outright supplies stealing begins by company employees.

Republic newspaper reports a recent case of janitor has been stopped when trying to sneak a big sack of sugar out of the company’s building. The employee placed a sack of sugar into a trash bin and then tried to carry it out of the company building.

For full version of article (in Russian only), please, see http://www.respublika-kaz.info/news/business/34096/

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