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
Corporate Governance & Compliance Services
Compliance Services in Kazakhstan and Central Asia



We Advise International Businesses in Kazakhstan and Central Asia




We advise international businesses on Compliance & Ethics challenges in Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, and Uzbekistan. Our major compliance services for multinationals include:

♦ Adapting/customizing global compliance and ethics policies for your Central Asian offices
♦ Delivering/customizing compliance and ethics training for targeted groups of local employees at your Central Asian offices
Assuring the strength/assessing of your local compliance and ethics control elements in Central Asian offices
Assisting you in finding best candidates for local compliance officer positions in Central Asia
Advising on compliance risks in Kazakhstan and Central Asia
Advising on third party risks in Kazakhstan and Central Asia
Conducting third party due diligence (vendors, suppliers, consultants, etc.) in Kazakhstan and Central Asia
Conducting investigations related to your local offices in Central Asia
Advising on money laundering risk exposure in Kazakhstan and Central Asia
Preparing customized reports on specific moments of your local compliance controls in Central Asia
Other compliance solutions and services for your Central Asian operations

Major compliance problems for multinationals in Central Asia are corruption, internal frauds, nepotism, related party transactions, collusive practices in procurements, opaque regulations (especially those related to international businesses), deficient law enforcement, kickbacks, companies’ property stealing, etc. Many of these problems, unfortunately, have been woven into local business reality as the normal component of doing business.

Preventing big crashes here is much easier than dealing with devastating consequences.

If you want to stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.

Compliance Updates from Central Asia

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Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Adapting Your Global Compliance and Ethics Policies for Your Central Asian Offices





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 for those multinational corporations that have their offices in this region.

Because of huge corruption and other compliance risks exposure in post-Soviet countries of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan, we highly recommend multinationals entering the region to adapt their compliance and ethics policies for local realities.

Local interpretation and adaptation of global corporate ethics codes and other corporate policies for Central Asia makes them live documents, which mollifies foreign corruption and third party risks and significantly reduces money laundering and local frauds exposure.

We make global ethics codes and corporate policies understood by local employees and managers working in Central Asia. We extensively customize corporate policies and develop additional targeted manuals for Central Asia.

We are greatly knowledgeable about what the highest ethics and anti-corruption standards are, and we know well what the local situation in the region is.

How we can help you?

Here is what we can do to help you to strongly connect your corporate compliance programs to your offices in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan:

- We can customize and connect your global ethics codes and policies to a real situation on the ground and provide appropriate trainings to your local staff. We can guarantee 85 percent and higher of understanding by local employees. We speak local languages and know local culture. We say about your policies through local perspectives because we can see them through the lense of specific group of local your managers.


- We also can revise and re-align your existing local Compliance and Ethics practices with your new or changed corporate Compliance and Ethics strategy or new policies.


- We can benchmark your existing local codes and policies against your Global Code and Policies. This is important when your company has just acquired new businesses here in the region.


- We can develop new local policies, manuals, specifications, and other documents from scratch to make them more effective. The newly developed policies and manuals will be strongly aligned with your corporate policies and will account for all important local specifics.


- We can conduct benchmarking of your existing local codes and policies in countries of your operation in Central Asia against international standards of compliance, Federal Sentencing Guidelines for Organizations (FSGO), SEC’s FCPA Guidance, UK Bribery Act, OECD’s Good Practices, UNCAC, etc. This is also important if your company has just acquired new businesses here in the region.

We can also develop comprehensive recommendations on improving your local compliance and ethics components in your Central Asian offices.

Again making your corporate ethics policies understood by local employees at your offices in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan is a huge challenge. Solving this challenge is not an easy task but if the job is done right then it means getting rid of foreign corruption exposure.

Preventing big crashes here is much easier than dealing with devastating consequences.

If you want to stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

write your email inside the box



Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Customized compliance and ethics training for targeted employees at your Central Asian offices





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 90 percent getting rid of foreign corruption exposure in the region.

Targeted and culturally-customized Compliance Trainings and Consultations for managers, employees, and third parties working in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan would significantly reduce your exposure to foreign corruption and third party risks in Central Asia, and would enable you to avoid money laundering and local frauds exposure.

There is a huge cultural gap, and there is a lot of work that should be done to fill the gap before your corporate ethics standards will begin to work in these Central Asian countries. If no such work is done, no positive effect should be expected.

EBRD and World Bank rank corruption among the top three obstacles to the business of representative firms in most of the Central Asian countries. The culture is so different even within this region. Also, the very perception of “unethical” in these region is so different from in the U.S. or Europe in terms of misdeeds mentioned in most corporate Ethics Codes. This makes “unethical” widely tolerable at all levels of business and in society.

Many good Compliance programs stumble in this region for one simple reason. They did not want to pay due attention to this very important factor. Actually, apart from the recent Pfizer’s case, there are many other examples of similar compliance failures, which are usually lesser known to the wider public.

The last thing any Chief Compliance Officer wants for himself is a total misunderstanding, which means NOT FOLLOWING, of his all compliance efforts. However, everyone knows that unlike at headquarters, odds are high that employees and managers at international offices pose a huge challenge for any strong Compliance Program. This becomes especially important when the main exposure to your program is foreign corruption. This challenge multiplies in case of Central Asia, where from 34 to 50 percent of the population pays bribes (see Global Corruption Barometer 2013) and where third parties risks and money laundering risks are among the highest compliance risks.

Delivering trainings that are deeply customized for this culture and highly targeted for special groups of employees and local managers as well as for liaisons in Central Asia - is the most wise and most cost effective way of protecting your program from the long-term perspective. This is the only way to liquidate corruption exposure and mitigate other compliance risks for this region.

As a compliance expert that is well familiar with both specifics on the ground and local languages in Central Asia and, at the same time, at the cutting edge of all current international trends in corporate compliance, we have trained over 1,500 Compliance, Legal, Ethics, and Internal Audit experts, managers, and board members across Central Asia. We make Global Ethics Codes and Corporate Policies cristal clear to employees and managers working in Central Asia. We know what the local situation in the region is.

How we can help you?

So how we can help you? We can develop highly customized training and consultations for:

- Groups of local personnel (sales managers, marketing officers, other staff)
- Your local agents, consultants, vendors, suppliers, and buyers
- Your local Compliance Officer in one of these countries: Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, or Turkmenistan

All our trainings are highly customized to a particular company’s unique situation in the region. We take into account every specific moment, including the particular location within the region, the size of the company, the type of business, the number of employees, the organizational structure, the specifics of the business model on the ground, the use of agents and other third parties, and many other things. Every specific moment is important and might influence the approach we choose to get the job done the in most successful and effective way. Truly, it is not an easy job to try to change people’s view of things like ethics and business conduct. It is even harder to make them believe in it. But we strive for real results; that is why we are successful and trusted.

We can also develop and deliver individual or group trainings for your managers at corporate headquarters that are dealing with businesses in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan.

In addition to all that, we can develop comprehensive recommendations for you on improving your local compliance and ethics components in your Central Asian offices.

Preventing big crashes here is much easier than dealing with devastating consequences.

If you want to stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

write your email inside the box



Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Assuring the Strength of Your Local Compliance and Ethics Controls in Central Asian Offices





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 corruption and commercial bribes, frauds, and money laundering are the most insidious enemies for your program. They develop like web viruses; they never stop and are never the same. The worst thing is that corruption and some other crimes become a normal way of life here. Corruption is getting worse year after year despite many high profile anti-corruption, anti-money laundering, and other initiatives that have been taken regularly.

Central Asia is one of the most risky zone from a compliance risk point of view. It is hard to overvalue double checking local controlling mechanisms in Central Asia. Double checking that your controls are working properly in the region may prevent catastrophic events.

While regulation burden is broadening and foreign corruption penalties are getting more severe, compliance budgets continue to stay almost the same. But you still have to know how things are going there. You want to have a true picture of your compliance program’s working at the riskiest locations.

You may want to have a first hand view of your controls in most risky location in addition to what you have been provided by your local compliance managers. Kazakhstan and Central Asia are one of those locations and we can help you to make independent assesment of your local compliance components there.

We are always present on the ground in Central Asia so you do not have to pull your attention away from more important tasks. We can do one-time or periodic checks of your local compliance and ethics mechanisms. The cost of such check is just a tiny fraction of what might be paid out as fines.

We can evaluate your local compliance controls and develop detailed recommendations for you on how to fortify your local compliance and ethics practices. We can spend as much time on the ground as it might be needed until we get the job done. We do not charge hourly rates. Unlike law firms and many big consulting firms, we only charge one-time flat fee for each project. Unlike other consultants, we are speaking local managers their local languages, and we know how to local culture.

Depending on the situation we can also develop comprehensive recommendations on improving your local compliance and ethics components throughout the region.

We can also make separate business, cultural environment assesments of local operations, identification of major risks, and prioritizing them for your specific situation.

We can help you develop or revise, or customize your local incentives program to better match them with local cultural specifics and to enhance your local compliance controls.


The number of cases charged by the SEC and Ministry of Justice for corruption in Central Asia is increasing progressively. EBRD, World Bank, and other international organizations have already recognized corruption and commercial bribes, as well as frauds and money laundering, to be the highest risk for this geographic zone. From this point of view, Central Asia is the most compliance-risky zone, along with Eastern Europe and North Africa. So far, charges by the SEC include millions of fines and even the imprisonment of some U.S. managers. It might become too late when you learn that your local compliance controls are punched by such malicious enemies in Central Asia as corruption, bribes, frauds, and money-laundering.

Identifying your most high impact risks and attacking them is not enough.

Do you think it is worth attacking your enemy if you are not sure your hardware is tested, checked, and certified appropriately? Would not you want to have firm assurance that everything works perfect before you fight the enemy?

Central Asia is one of the riskiest geographic zones from the compliance view. Your local compliance controls shoud stay always ready-and-steady to be able to guard and protect your program. Your local control mechanisms at the most risky locations protect your entire corporate compliance program, your corporation’s reputation, earnings, and your own career. Any chain is as strong as its weakest link. Trying to fight most serious local risks without being sure if your compliance controls are working properly is dangerous for you. Identification and mitigation of your local risks is useless if, for any reason, there are some serious deficiencies in your local controls, you are not aware of.

So saying that, who collects and provides you with all that information you are using in monitoring and auditing your local businesses and how? What information is collected for monitoring? Who carries out your audits on the ground? How such information is provided to you? Can you be 100 percent sure that everyone furnishing your questionnaires and interviewing other people, as well as those who provide them such information, are all doing it precisely how it was supposed to be done by you?

Are you sure employees and third parties at your company’s most risky locations understand the right way to distribute all your messages? Do they understand your corporate policies and manuals properly? How can you be sure? Do they handle your corporate policies correctly in each of their local contexts? Is your local compliance officer understood by local personnel? How could you learn that? Do local personnel and the compliance officer understand the seriousness of local threats as well as you do? How can you learn about that too? Are they on the ground able to separate the right signals from the wrong signals like you would do that?

Do employees and third parties at your company’s most risky locations realize the possible consequences of very small neglects in the strict application of your corporate policies, codes, manuals, specifications, and instructions? Can you be sure that local personnel, sales and marketing managers, and vendors understood what you wanted to know from them during your last monitoring? Do they ask you questions? Do they disagree with you? How can you check whether your controls are adequate, stable, and strong here?

The problem is that employees and managers of Central Asian offices might not let you know they disagree with you even on important issues, be it your company’s new policy, ethics rules, new methods, etc. It is inherent to most Central Asian cultures to be polite, smile, and not behave assertively towards foreign people and higher level managers. Your compliance manager may not be raising the issue to you when they are supposed to do that. Your compliance officer lives in a different ethics dimension, with a different reality and a different vision. When your local manager seems to be agreeing with you, it does not necessarily mean he understands you or shares your vision. In Central Asia, it is considered impolite when he or she disagrees with you if they are your subordinates. So you can be totally unaware of the real picture and real circumstances about your compliance controls on the ground. You can only know that what you are served with by your local officer or managers. But the stakes are high in Central Asia. But you may find it out when it is too late.

Double checking and assessing of your control systems and their proper working on the ground is always a good idea. But it becomes even more important when risks and possible consequences might be disastrous. The cost of tiny deviations, small neglects, and misunderstandings in the local compliance system—when risks are high—will blow up all your compliance efforts.

In our everyday life, we always want to double check before we do something serious. Is not preventing your company from severe penalties and shame (not to mention moral losses for you) a serious thing to care about?

Is not the strength of your local compliance controls at the most risky geographic locations something you want to be assured about?

If you want to stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

write your email inside the box


Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Finding the Best Candidates for Your Local Compliance Officer Positions in Central Asia





We help you find the best candidates for your local Compliance Officer positions in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan.

You would not be able to have peace of mind having an unqualified compliance officer in the riskiest geographic zone on your map. According to KPMG’s 2013 analysis*, Central Asia is shown to be among the three most dangerous geographical regions, with the highest—70%—red reports in financial sector companies’ integrity due diligence. Same report says that Central Asia stands out from other regions as showing the highest third-party risk—53%—of all third-party reports by KPMG in Central Asia. EBRD ranks corruption among the top three obstacles to the business of a representative firm in most of the Central Asian countries.

Taking into account the fact that we are very familiar with local realities and culture on the ground as well as speak the local languages, you may want to allow us to search for the best candidates for your local compliance officer position. Local recruiting agencies would often not fully understand what compliance is all about and sometimes would barely get the idea of whom you might be looking for. That is why we want to offer you our help.

We can handle that search job much more effectively. We will save you a lot of time and effort and protect you from dealing with junk candidates. We can also better customize your job requirements to local circumstances than recruiting agencies would do for you. All this means a more effective search and, as a result, the best candidate for your local compliance officer position. The best local compliance officer means better protection for you and your company.

We can assist you during all your interviewing of shortlisted candidates to help you sift out the best possible candidates with the right attitude for this job. We can also conduct a full search on our own, including a multiple interviewing process, presenting you with the final candidates only.

The better and more qualified your local compliance officer is, the better your compliance protection will be in this region. The better your protection is at your risky regional office, the less chance that your compliance program will be compromised unexpectedly. And finally, the better the protection of your Compliance Program, the better you will sleep at night.

* KPMG. Astrus Insights. Analysis of Third-Party Integrity Risks. 2013. Edition

To stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our free alert service—Important Compliance Updates from Central Asia—which will regularly provide you valuable insights about compliance developments in Central Asia you should know about.

Subscribe to our mailing list



Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com


Zooming in your compliance risk map: We help you to spot your compliance-risks in Central Asia





Corruption. EBRD ranks corruption among the top three obstacles to the business of representative firms in most of the Central Asian countries. According to EBRD’s 2010 Anti-Corruption Report, corruption is pervasive in several countries of Central Asia. The majority of respondents say they are either asked or are expected to pay bribes to receive public services. With such a war zone on your risk map, you are not expected to be shortsighted about your risks in countries like Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan. Some risks may easily go under your identification radars. For one of the riskiest zones—Central Asia—you do not want to entrust all your compliance risk evaluation—or say your tranquility—to your local compliance/risk officer alone. You need to secure a second opinion from an independent expert that is very familiar with both the highest U.S. and European compliance standards and a real situation on the ground in countries like Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan.

We can help you spot your compliance risks in Central Asia.

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 corruption and commercial bribes, frauds, third parties' risks, politically exposed persons and money laundering are the most insidious enemies for your program. They develop and twist like web viruses; they never stop and are never the same. The worst thing is that corruption and some other crimes become a normal way of life here. Corruption is getting worse year after year despite many high profile anti-corruption, anti-money laundering, and other initiatives that have been taken regularly.

Central Asia is one of the most dangerous and risky zone from a compliance view. It is hard to overvalue double checking your local compliance risks in Central Asia. You better double check you got all killing risks in Cntral Asia on your compliance risk map if you seriously want to prevent catastrophic events.


Third party risks. Potential reputational risks and integrity concerns should be approached very seriously in Central Asia. Such risks here can usually be associated with dealing with local clients, vendors, suppliers, local consultants, joint venture partners, etc.

According to KPMG’s 2013 analysis*, Central Asia is shown to be among the three most dangerous geographical regions, with the highest—70%—red reports in financial sector companies’ integrity due diligence. Same report says that Central Asia stands out from other regions as showing the highest third-party risk—53%—of all third-party reports by KPMG in Central Asia.

The major integrity problem here in Central Asia region is generally related to a hidden opaque ownership structures used in the business. Dealing with local companies you sometimes may be even not aware who is the ultimate beneficial owner of this particular business you are dealing with. So the odds are high to ending up doing business with corruptive government officials, inadvertently, of course. But who would care about it if your company violated FCPA or UK Bribery Act? Even worse, your company may be easily get to be involved into money laundering schemes. Again, inadvertently. Believe us or not, you might even not have a clue of you doing that. But both Ministry of Justice and SEC, or SFO (for UK) barely going to be kind and understanding about that when it happens.

The hidden presence of politically exposed persons (PEPs) among local businesses is a vastly popular thing. Often, only the word of mouth and artful networking with local experts can help you to save a day in this kind of situations. It is also worth noting that lots of proposed projects do not proceed here due to integrity concerns in the region.

Sometimes even local offices of big consulting firms might be doing not very ethical business while serving their international clients here. In one recent case, a big consulting firm, even having its own local office here, was looking for local partner for doing "all that dirty job” related to government permissions and registrations. That job was actually about obtaining all licenses and permissions for international client in its big construction project in Kazakhstan.

Bribery blossoms here. Under the guise of normal business firms, in reality, you may reveal a firm embedded into various levels of corruption chain.

Money laundering, bribes and Politically Exposed Persons (PEPs). Politically Exposed Persons (PEP). Specifically, offshore structures used extensively to hide both ownership and profits abroad. This schemes most often used by Politically Exposed Persons as well as by other lower level officials who deal with government procurements, government licenses, permissions or those who have some controlling and investigative authority over businesses.

Today almost every Politically Exposed Persons along with tens of his relatives in Central Asia are sacking resources from government and businesses by using various combinations of business structures and agents which facilitate both corruption and money laundering.

The most extensive way of embezzlement in Central Asia is that of over government procurement, just like it was happening in early 80th in the USA. Regulatory and enforcement authorities, permissions and licenses are used by government official as instruments for soliciting bribes. About $5 billion of such illegal money annually seeking their way back into legal business turnover in Central Asia. Here comes money laundering. Again, look at the numbers: for year 2012 $1.78 trillion dollars cashed out through various money-laundering mechanisms in only one of Central Asian countries, Kazakhstan. And the hidden presence of Politically Exposed Persons among local businesses is a vastly popular thing. Often, only the word of mouth and artful networking with local experts can help you to find right information about real owners of your business partners, vendors, suppliers, and especially, your buyers.

Whatever the reason for using offshore structures in Kazakhstan and Central Asia this means billions of dollars laundering and putting in business again. Many AML, Anti-Corruption and other acts and initiatives are being held so far. But none of those acts and initiative are effective.

Cultural Gaps. Do employees and third parties at your company’s most risky locations realize the possible consequences of very small neglects in the strict application of your corporate policies, codes, manuals, specifications, and instructions? Can you be sure that local personnel, sales and marketing managers, and vendors understood what you wanted from them during your last monitoring? Do they ask you questions? Do they disagree with you? How can you check whether your controls are adequate, stable, and strong here?

The problem is that employees and managers of Central Asian offices might not let you know they disagree with you even on important issues, be it your company’s new policy, ethics rules, new methods, etc. They may be reluctant to raise the problem up when they supposed to. Finally, they may simply omit very mportant signals you as a compliance officer must be aware about. It is inherent to most Central Asian cultures to be polite, smile, and not behave assertively towards foreign people, expat managers, and simply higher level officers. Your compliance manager may not be raising the issue to you when he or she supposed to do that. Your compliance officer lives in a different ethics dimension, with a different reality and a different vision of integrity and righteousness. When your local manager seems to be agreeing with you, it does not necessarily mean he understands you or shares your vision. In Central Asia, it is considered impolite when he or she disagrees with you if they are your subordinate. So you can be totally unaware of the real picture and real circumstances about your compliance controls on the ground. You can only know what you are served by your local officer or managers. You get you picture through the lense off your local personnel's perception. But this picture in 70 percent of cases is twisted. The stakes are high in Central Asia. You may find it out when it is too late.


How we can help you?

We can develop your local risk map from scratch. In case you are interested in a total compliance risk picture in Central Asia, we can develop a comprehensive report on your local compliance risks, which will be tailored towards your specific industry and type of business in the region. We can also revise your existing risk map concerning Central Asia.

However, if your company is newly embarking on Central Asian markets and you are looking for initial understanding, getting familiar with, and delineating your local compliance risk universe, then we can develop a limited local risks inventory for your company’s specific operations in Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan. We can also help you in better classification or re-classification and prioritization of all your local compliance risks.

In addition to all that, we can also develop comprehensive recommendations on improving your local compliance and ethics components in your Central Asian offices.

* KPMG. Astrus Insights. Analysis Of Third-Party Integrity Risks. 2013. Edition

To stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our free alert service—Important Compliance Updates from Central Asia—which will regularly provide you valuable insights about compliance developments in Central Asia you should know about.

Subscribe to our mailing list



Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Advising On Third Party Risks in Central Asia





Potential reputational risks and integrity concerns should be approached very seriously in Central Asia. Such risks here can be usually associated with dealing with local clients, vendors, suppliers, local consultants, joint venture partners.

According to KPMG’s 2013 analysis*, Central Asia is shown to be among the three most dangerous geographical regions, with the highest—70%—red reports in financial sector companies’ integrity due diligence. Same report says that Central Asia stands out from other regions as showing the highest third-party risk—53%—of all third-party reports by KPMG in Central Asia.

The major integrity problem here in Central Asia region is generally related to a hidden opaque ownership structures normally used in business. Dealing with local companies you sometimes may be even not aware who is the ultimate beneficial owner of this particular business you are dealing with. So the odds are high to ending up doing business with corruptive government officials, inadvertently, of course. But who would care about it if your company violated FCPA or UK Bribery Act? Even worse, your company may become easily get to be involved into money laundering schemes. Again, inadvertently. Believe us or not, you might even not have a clue of you doing that. But both Ministry of Justice and SEC, or SFO (in case of UK) barely going to be kind and understanding that when it happens.

The hidden presence of politically exposed persons (PEPs) among local businesses is a vastly popular thing. Often, only the word of mouth and artful networking with local experts can help you to save a day in this kind of situations. It is also worth noting that lots of proposed projects do not proceed here due to integrity concerns.

Sometimes even local offices of big consulting firms might be doing not very ethical business while serving their international clients here. In one recent case, a big consulting firm, even having its own local office here, was looking for local partner for doing “dirty job”. That job was actually about obtaining all licenses and permissions for international client in its big construction project.

Bribery blossoms here. Under the guise of normal business firms, in reality, you may reveal a firm embedded into various levels of corruption chain.

Because of incredibly higher reputational risks in Central Asia, your compliance department is better to have increased levels of scrutiny and provide the most clear guidance to local suppliers, vendors, partners as to what is not acceptable practice in doing business with your company.

We can assist your office in doing third party due diligence locally within Central Asian countries, or we can conduct third party due diligence for you on our own.

We can advise you on intergity prblems in countries of your operation in Central Asia, and/or develop and provide special trainings for those of your managers involved in dealing with Central Asian businesses. As compliance experts that are well familiar with both specifics on the ground and local languages in Central Asia and, at the same time, staying at the cutting edge of all current international trends in corporate compliance, we have trained over 1,500 Compliance, Legal, Ethics, and Internal Audit experts, managers, and board members.

We have conducted Compliance Audits and Due Diligence and identified risks in respect to large-scale lending/investment Kazakhstani and CIS projects (from US $5,000,000 to $2,000,000,000). We’ve conducted specialized due diligence for over $100 million Special Investment projects in Central Asia.

We helped to prevent $1.5 billion transactions with serious legal, environmental, and ethical concerns. We conducted full-scale conflicts of interest checks, compliance clearance, third party due diligence, and prospect borrower/investee due diligence. In total, we’ve provided our due diligence services for more than $7 billion in finance and investment projects across Central Asia, Europe, the USA, Russia, and CIS.

If you want to stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

write your email inside the box


Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com


Conducting Investigations of Wrongdoings in Your Local Offices in Central Asia





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 corruption and commercial bribes, frauds, and money laundering are the most insidious enemies for your program.

Outright workplace harassment, stealing of office supplies, reimbursing of inflated out-of-pocket expenses, and personal use of corporate properties - are among the most innocent violations of almost all ethics policies normally happening across the region. You will only be able to detect something wrong happening, when violation, would have inevitably, transformed into something bigger with huge reputational and financial consequences. We all know well that undetected, and not punished for, small misdeeds never stop there.

If a wrongdoing at one of your Central Asian locations was reported or detected by your system and you are now initiating new investigation, and if any part of the investigation must be held in Central Asia, then we can help you. We can assist you in your local part of investigation, we meet with witnesses, collect important materials, make analysis of materials, conduct intervews, prepare reports and do other work that should be done locally. We can also conduct entire investigation process on our own.

We are compliance experts that are well familiar with both specifics on the ground and local languages in Central Asia and, at the same time, are at the cutting edge of all current international trends in corporate compliance and ethics.

We investigated over $50 million corporate frauds and wrongdoings and helped to prevent $1.5 billion transactions with serious legal, environmental, and ethical concerns. We conducted full-scale conflicts of interest checks, compliance clearance, third party due diligence, and prospect borrower/investee due diligence.

If you want to stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

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Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Advising on Anti-Money Laundering in Central Asia





Usage of offshore jurisdictions and legal structures in business in Central Asia is highly popular. There are plenty of forms of structures and ways money laundering out there in the region. During 2012 there were $1.78 trillion dollars cashed out through money-laundering mechanisms in Kazakhstan.

Why offshore structures here? First major reason is that almost every successful business owner tries to hide his earnings, artificially reducing his profits by using various combinations of shell companies and other legal vehicles and structures. As a result we have thousands of fake suppliers, consulting firms, partners, agents, vendors, etc.

Politically Exposed Persons (PEP). Specifically, offshore structures used extensively to hide both ownership and profits abroad. This schemes most often used by Politically Exposed Persons as well as by other lower level officials who deal with government procurements, government licenses, permissions or those who have some other controlling and investigative authorities over businesses entities.

Today almost every Politically Exposed Persons along with tens of his relatives in Central Asia are sucking resources from government and businesses by using various combinations of business structures and agents which facilitate both corruption and money laundering.

The most extensive way of embezzlement in Central Asia is that of over government procurements, just like it was happening in early 80th in the USA.

Regulatory and enforcement authorities, permissions and licenses are used by government official as instruments for soliciting bribes.

About $5 billion of such illegal money annually seeking their way back into legal business turnover in Central Asia. Here comes money laundering.

Again, look at the numbers: for year 2012 $1.78 trillion dollars cashed out through various money-laundering mechanisms in only one of Central Asian countries, Kazakhstan. And the hidden presence of Politically Exposed Persons among local businesses is a vastly popular thing.

Often, only the word of mouth and artful networking with local experts can help you to find right information about real owners of your business partners, vendors, suppliers, and especially, your buyers.

Whatever the reason for using offshore structures in Kazakhstan and Central Asia this means billions of dollars laundering and putting in business again. Many AML, Anti-Corruption and other acts and initiatives are being held so far. But none of those acts and initiative are effective.

If you represent a financial or other institution for which money laundering risk is one of the highest priorities, we can help you in identifying your specific risks exposure stemming from your company’s operations in Central Asia. We can aso advise you on your money laundering exposure and provide you appropriate trainings.

If you want to stay updated on your compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

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Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com

Preparing Customized Reports On Any Specific Moment of Your Compliance Controls and of Your Business Operations in Central





We can develop customized reports for you on your local compliance and ethics controls, compliance and business environment, regulatory framework for your company business, and compliance risks and other reports in respect of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan.

Our clients can apply us with any, literally any, corporate governance problems. If you want to discuss your particular situation related to the following countries: Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, please, just feel free to email us a short description of your particular situation. We will be happy to discuss it with you.

We have helped many corporations and financial institutions to find solutions for their governance, compliance, and ethics problems, and we advise them on many complicated local investment and financial regulation issues as well.

We love what we do, and we are passionate about helping our clients to find solutions for each of their particular situations. Each case is unique for us.

We have our broad network of highly qualified local experts in Law, Business, Corporate Governance, and Compliance—all working within Central Asia in Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, Uzbekistan, and some other post-Soviet countries.

If you want to stay updated on your compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our alert service — Compliance Updates from Central Asia — which will regularly provide you valuable compliance developments from Central Asia. This service is free.


Compliance Updates from Central Asia

write your email inside the box



Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com



Other Compliance Solutions For Your Central Asian Operations





If you want to discuss your particular situation related to the following countries: Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, please, feel free to email us a short description of your particular situation. We will be happy to discuss it with you.

We have helped many corporations and financial institutions to find solutions for their governance, compliance, and ethics problems, and we advise them on many complicated local investment and financial regulation issues as well.

We love what we do, and we are passionate about helping our clients find solutions for each of their particular situations. Each case is unique for us.

We have our broad network of highly qualified local experts in Law, Business, Corporate Governance, and Compliance—all working within Central Asia in Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, Uzbekistan, and some other post-Soviet countries.

To stay updated on compliance risks in Central Asia and about possible ways of mitigating your risks, you may subscribe to our free alert service—Important Compliance Updates from Central Asia—which will regularly provide you valuable insights about compliance developments in Central Asia you should know about.

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Phone: +1 (718) 289 4134

Email: cga@sarsenov-advisory.com