What do you do when assets stolen from a country’s state coffers by corrupt individuals have been recovered and can now be returned to the country - but the government is still controlled by corrupt people? That’s the case of Uzbekistan, one of the most corrupt countries in the world. It scores just 21 out of 100 on Transparency International’s Corruption Perceptions Index, indicating rampant corruption in the public sector.
In 2015, the US Department of Justice (DOJ) found that three companies subject to American law had paid bribes of almost US$1 billion to Gulnara Karimova, the daughter of the now deceased Uzbek president Islam Karimov, as a way to enter the Uzbek telecommunications market. Gulnara Karimova deposited the payments in bank accounts in Ireland, Belgium, Luxembourg and Switzerland. Now, the money is frozen pending the resolution of the DOJ cases.
But the question remains: what should be done with the money? The government of Uzbekistan is still run by people connected to Karimov. The money was stolen from the public purse which in theory, if not in practice, belongs to the citizens of Uzbekistan, and it’s these citizens who are the victims of corruption.
In this case, the normal rules of asset recovery - returning the stolen goods to the government of origin - should not apply. If the money is returned to a corrupt government, it could perpetuate the cycle of corruption and human rights abuses.
Something similar to this happened in Kazakhstan from 2014. The solution the governments came up with was to establish an independent foundation to administer the US$115 million of repatriated assets. So instead of sending back stolen Kazakh assets to the government that was implicated in stealing in the first place, the governments of Kazakhstan, Switzerland and the U.S. agreed to the formation of BOTA Foundation.
This independent entity, whose purpose was to repatriate assets from a corrupt scheme to fund NGOs and programs that help reduce child poverty in Kazakhstan, was subject to monitoring from the U.S., Switzerland, the World Bank and an international NGO.
This precedent could be used in Uzbekistan, however this time we are talking about close to US$1 billion, which complicates things. It is not easy to spend that much money quickly and ethically. Instead, the money could be held in a transparent trust that is accountable to Uzbek civil society actors so that it could be used to support victims and the people of Uzbekistan would know how and what the money was used for. This trust would have to be in place for several years and be run in a transparent and accountable way.
This is a chance for the governments where the frozen assets are currently held to do the right thing with this money and show the people of Uzbekistan that the victims of corruption, ordinary citizens, are the ones who will benefit from the repatriation of illicit wealth.
You might also like...
The top 25 countries on the CPI have their share of corruption challenges
Our timeline highlights moments in the past 20 years when lapses in accountability caused financial havoc. Could this happen again? You judge.
In a region where only one country scores over 50 out of 100 and all other countries score 45 or less out of 100 on the index, there has been very little progress in combatting…
A US court ruling could weaken a new law requiring extractives firms to publish information about each country where they operate.