DEC. 10 2013 (The Conway Bulletin) — Global Witness, the anti-corruption lobby group, published a report that alleged widespread use of offshore accounts and shell companies to move cash out of state-owned energy company SOCAR. Azerbaijan denied any wrongdoing.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 10 2013 (The Conway Bulletin) — Profits from SOCAR, Azerbaijan’s state-owned energy company, are disappearing offshore through a network of faceless companies controlled by one mysterious man.
That’s the short version of how Azerbaijan’s energy sector is run according to the London-based anti-corruption lobby group Global Witness in their new report entitled “Azerbaijan Anonymous”.
“While SOCAR and its partners may well have acted within the law, the lack of transparency about SOCAR’s partners and how they came to be involved in the Azerbaijani oil industry raises questions over potential conflicts of interest, preferential treatment, and the risk of corruption,” Global Witness wrote.
SOCAR has denied that it has done anything illegal and said in response: “The Republic of Azerbaijan is a founding member of the Extractive Industry Transparency Initiative (EITI) task force subjecting the reviews of SOCAR to thorough examination and auditing.”
The EITI is a group set up to monitor whether resource-rich countries spend their revenues responsibly. Global Witness’s report criticised EITI too and said it was a weak institution with little genuine influence.
On Azerbaijan, the Global witness report said that Anar Aliyev, the mysterious owner of several companies linked to SOCAR, was virtually unknown and that he was working on behalf of several higher profile individuals. It said that Mr Aliyev was formally responsible for dozens of companies which have generated $375m profit over five years.
Aliyev is a common surname in Azerbaijan and Anar Aliyev has no family connection with Ilham Aliyev, Azerbaijan’s president.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 2 2013 (The Conway Bulletin) — A court in Baku jailed former Azerbaijani MP Gular Akhmadova for three years for corruption. In 2005, Akhmadova had tried to extort a $1m bribe from the owner of an Azerbaijani university in exchange for a seat in parliament.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 4 2013 (The Conway Bulletin) — Corruption is still rife in Azerbaijan but it is falling, Transparency International (TI) said in its 2013 Corruptions Perception Index.
The index is important as it is widely read and acts as a sort of early warning system over which way corruption levels are heading. For Azerbaijan, TI reckoned that things are improving.
Azerbaijan has climbed to 127th position in the 177 country index. This is still relatively low for the aspiring energy exporter–– it has Pakistan, Gambia and Mali for company — but is still an improvement on 139th position in 2012.
According to the data nearly 70% of Azerbaijanis think that the government is doing a decent job combating corruption.
Importantly, though, most people think corruption is still a problem.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 4 2013 (The Conway Bulletin) — Kazakhstan’s Prosecutor-General accused the former governor of the Atyrau region, Bergei Ryskaliyev, of having links to radical Islamic groups. Mr Ryskaliyev has been on the run for over a year. He is also accused of stealing $460m.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 4 2013 (The Conway Bulletin) — Kazakhstan has dropped seven places in this year’s Transparency International (TI) Corruption Perception Index to 140th position.
This is not good. There are only 177 countries in the index, meaning that Kazakhstan is firmly anchored in the bottom 20% of the most corrupt countries in the world.
And it’s hardly keeping stellar company. Honduras, Laos and Uganda share the 140th position berth and from the former Soviet Union only Ukraine, Kyrgyzstan, Turkmenistan and Uzbekistan are ranked lower.
“The picture is rather gloomy and can be described as stagnation across all the countries,” Svetlana Savitskaya, TI’s program coordinator for Central Asia told Radio Free Europe of the former Soviet countries’ rankings.
Of people interviewed for the index, over 40% said that corruption was a serious problem in Kazakhstan and 34% said it was getting worse.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 27 2013 (The Conway Bulletin) — Uzbekistan has introduced new regulation that, in theory, makes it harder to launder money and finance terrorism, media reported. Under the new rules, individual transactions of over $4,000 trigger a red flag, a tenth of the previous amount.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 2 2013 (The Conway Bulletin) — Uzbekistan remains one of the most corrupt countries on the plant. In its 2013 index, the anti-corruption lobby group Transparency International ranked Uzbekistan at 168th position alongside Turkmenistan and Syria. Only a selection of war ravished and awkward countries, including Afghanistan and North Korea, rank lower.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 3 2013 (The Conway Bulletin) — Tax inspectors in Uzbekistan have surprised observers by apparently pulling back from prosecuting Russia’s VimpelCom for tax evasion.
A report by the Russian news agency RIA-Novosti quoted a source from the Uzbek tax committee as saying that a two-month long investigation had found no violations.
“The inspection is complete. The company has received a resolution with some criticism but no violations of the tax legislation have been found,” an unnamed source at the Uzbek tax authorities told RIA-Novosti.
This will come as a relief to VimpelCom executives who must have feared at one point that they would be going the way of their Russian rival MTS which had to quit Uzbekistan earlier this year after a similar tax case ended in charges.
VimpelCom operates in Uzbekistan under its Beeline brand name. With roughly 55% of the country’s 19m mobile users, it is the largest mobile provider in Uzbekistan.
No details of why tax inspectors dropped the case against VimpelCom have been released.
No doubt there were behind-the-scenes negotiations between VimpelCom and the Uzbek authorities and between Russian and Uzbek officials, but we don’t know the details of what was agreed. Throughout, VimpelCom have denied the charges and said that it is the victim of an elaborate shake-down by the authorities, something they are renowned for.
Regardless, it will be a relief for investors in Uzbekistan generally. They have increasingly complained of Uzbekistan’s difficult business climate.
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(News report from Issue No. 163, published on Dec. 4 2013)
DEC. 2 2013 (The Conway Bulletin) — Completing the fall of the former high-flying politician Gular Akhmadova, a court in Baku sentenced her to three years in prison for corruption.
A video of Akhmadova organising a $1m bribe to arrange for Elshad Abdullayev, formerly the owner of a university in Azerbaijan, to win a parliamentary seat at an election in 2005 surfaced last year and handed her instant notoriety.
The case captivated ordinary Azerbaijanis as it gave them a rare inside glimpse of corruption by members of the political elite. Media dubbed the case “Gulargate”.
Corruption is rife in Azerbaijan, business and politics mix casually and bribes are exchanged regularly, but it is rare for a case to play out so publicly.
Ahkmadova entered parliament in 2000 and held her seat until the ruling New Azerbaijan Party expelled her because of the corruption scandal last year. She was known as a stalwart party loyalist and, clearly, was able to arrange for wealthy people to win parliamentary seats in return for a bribe.
It’s unclear how many times previously, Akhmadova had sold parliamentary seats but it is clear something went badly wrong with this deal. Mr Abdullayev, the professor/businessman, didn’t end up with the seat and instead had the licence to his university revoked. He is now living in exile in France from where he published videos of his negotiations with Akhmadova, presumably as revenge.
And Akhmadova has form. She’s also hated by Azerbaijan’s marginalised opposition groups.
In March 2013, the authorities sentenced Avaz Zeynally, editor of an independent newspaper to nine years in prison for extortion, charges international groups said were false and politically motivated.
His accuser was Akhmadova.
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(News report from Issue No. 163, published on Dec. 4 2013)