09 Dec 2020
Professor Kristian Lasslett and Dr Dawid Stanczak

US$1 billion in assets have been seized in Western Europe, which authorities claim ultimately belong to Gulnara Karimova. Karimova is the eldest daughter of Islam Karimov. Karimov was President of Uzbekistan until his passing in 2016.

In September 2020 a Memorandum of Association (MoU) was signed between the Government of Uzbekistan and the Government of Switzerland. It is the first step in a broader return process that will see a US$131 million tranche in illegally acquired assets acquired by the Karimova syndicate, repatriated back to Uzbekistan.

The MoU sets out key principles including transparency, accountability and inclusivity, that will guide the repatriation process to ensure it meets the highest standards of responsible asset return..

In order to better understand the risks and challenges both governments will face when delivering the MoU principles in practice, arguably the best barometer is how the domestic seized assets belonging to the Karimova syndicate have been managed by the Government of President Mirziyoyev.

The following report presents findings of an investigation conducted into the Mirziyoyev government’s management of these domestic assets seized from the Karimova syndicate.

Our investigation into these processes documented a series of serious red flags:

  • A major Karimova syndicate company, MDS-Servis, has been purchased at public auction by a family group whose bank, prosecutors claim, was co-founded by Karimova. This bank also previously acted as the banker for a core Karimova syndicate entity, Terra Group LLC. A principal standing behind the family group which acquired MDS-Servis has been accused of corruption and illegal activities in Russian litigation and an associated criminal investigation.
  • The Mirziyoyev government has failed to publicly disclose elementary information relating to the domestic seizure of Karimova syndicate assets and their subsequent management.
  • In derogation of its legal obligation under Uzbek law, the Mirziyoyev government has failed to respond to freedom of information requests asking for essential documents relating to the domestic seizure and management of Karimova syndicate assets.

Because these findings evidence a manifest lack of governmental capacity to responsibly manage seized assets in compliance with basic transparency, accountability and restitutive norms, this report recommends an independent third party body be set up as the return mechanism for facilitating the repatriation of US$131 million to Uzbekistan.