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Asset Recovery Methods in Kazakhstan: What You Need to Know
In a bid to tackle oligopolistic groups and entities implicated in large-scale corruption, President Kassym-Jomart Tokayev of Kazakhstan has introduced a law aimed at recovering illegally acquired assets to the state. The new legislation has far- reaching implications for individuals and entities holding assets within and outside the country.
Background
The asset recovery law is a response to the Council of Europe’s Group of States against Corruption report, which highlighted corruption in Kazakhstan as a serious concern. The report praised the establishment of the Anti-Corruption Agency and adoption of dedicated strategies and initiatives focused on prevention. However, it emphasized the need for increased transparency in public administration and decision-making processes.
Scope and Applicability
The law applies to individuals holding positions of public responsibility, state legal entities, quasi-public sector entities, and those affiliated with them. To fall under its scope, a person or entity must have assets exceeding 44 billion tenge, equivalent to around USD100 million.
Criteria for Inferring “Reasonable Doubt”
- Inconsistencies between asset value and legitimate income or sources of capital
- Exceeding established thresholds
- Other grounds established by the legislation
Process and Procedures
The Authorised Body will establish a new department responsible for analyzing information from legal sources, including state departments, regarding the legality of asset acquisition and removal from the country. If the Authorised Body has “reasonable doubts” that an entity has illegally acquired assets, it will submit proposals to the Commission on Asset Recovery to include such entities in the relevant Register.
Consequences
If a person or entity is added to the register, they must submit an asset declaration affirming that their assets were legally acquired within one to three months. Failure to substantiate the legality of the asset may result in classification as “unexplained origin.” The Authorised Body can apply to the Court for permission to take preliminary measures to prevent assets from being withdrawn or alienated.
Forced Return of Illegally Acquired Assets
The law allows for the forced return of illegally acquired assets, which may take the form of:
- Payment
- Transfer
- Reimbursement of taxes
- Repayment of income
- Compensation
International Cooperation
International cooperation is facilitated through policies and procedures for enforcing court decisions, exchanging information, and engaging in legal proceedings to recover assets.
Conclusion
Kazakhstan’s new asset recovery law is likely to have significant implications for individuals and entities within and outside the country. It is essential to understand the scope and requirements of the legislation to avoid any potential consequences.