Financial Crime World

Asset Recovery Strategies in Kazakhstan: A New Law to Target Oligopolistic Groups and Entities Implicated in Large-Scale Corruption

Kazakhstan’s President Kassym-Jomart Tokayev has introduced a new law aimed at recovering illegally acquired assets, designed to target individuals and entities holding positions of public responsibility, as well as those affiliated with state legal entities and quasi-public sector organizations.

Corruption in Kazakhstan: A Serious Concern

According to the Council of Europe’s Group of States against Corruption, corruption in Kazakhstan is a serious concern. The country’s wealth is concentrated among a small elite group, with 0.001% of the population controlling over 50% of the total wealth.

Key Features of the New Law

  • Asset Threshold: Persons holding positions of public responsibility, state legal entities, quasi-public sector organizations, and their affiliates will be affected if they have assets exceeding KZT 44 billion (approximately USD 100 million).
  • Authorised Body: A new department within the Authorised Body will collate and analyze information from legal sources to determine the legality of asset acquisition.
  • Register: The Commission on Asset Recovery will maintain a register of entities with illegally acquired assets. Entities added to the register will have one to three months to submit an asset declaration affirming the legality of their assets.

Criteria for Inferring “Reasonable Doubt”

  • Inconsistencies between asset value and legitimate income or other sources of capital
  • Acquisition of assets exceeding established thresholds
  • Other grounds established by the law

Consequences of Failure to Substantiate Asset Legality

  • Classification of “unexplained origin”
  • The Authorised Body can apply to the Court for permission to take preliminary interim measures to prevent assets from being withdrawn or alienated from Kazakhstan.

Return of Illegally Acquired Assets

  • Assets can be returned voluntarily or by compulsion
  • The law sets out policies and procedures for facilitating international cooperation in enforcing court decisions, exchanging information, and other legal engagements required when seeking the return of an asset.

Implications for Individuals and Entities

The new asset recovery law is likely to have far-reaching implications for individuals and entities based inside Kazakhstan and overseas. For legal advice concerning the new law, please contact our experienced Business Solicitors at Eldwick Law Firm.