Switzerland agrees to return $131 million to Uzbekistan through UN trust fund – The Diplomat

Good 16 AugustUzbek and Swiss officials have signed an agreement to return to Uzbekistan $131 million seized by Switzerland during a money laundering investigation against Gulnara Karimova, daughter of the late Uzbek President Islam Karimov.

The agreement is based on framework announced in 2020 when the Uzbek and Swiss authorities settled on “principles and stages of restitution» assets confiscated from Karimova, to the government of Uzbekistan, with the basic principles of transparency and accountability of the return and the ultimate goal of benefiting the Uzbek people.

I detailed Karimova’s dirty story in 2020 this way:

AT 2010Leaked US diplomatic cables described Karimova as a “robber baron”. One telegram stated that she was “the most hated person in the country”. It wasn’t until 2012, however, that the scale of Karimova’s corruption exceeded her father’s tolerance. Her machinations burst into international consciousness as allegations surfaced. Swedish public television that a shell company linked to Karimova extorted and received bribes from a Swedish telecommunications company in an effort to enter the Uzbek market, of which Karimova was queen.

In the following years, she was eventually removed from the public eye (after being an aspiring pop star, Uzbekistan’s permanent representative to the United Nations in Geneva, and her ambassador to Spain) and placed under house arrest her father’s administration. This went beyond the Karimov era, as the change in leadership after Karimov’s death in 2016 also provided an opportunity for The government of Uzbekistan will lobby for the return of assets was worth the millions she pulled out of the country.

A recent agreement that Swiss President Ignazio Cassis signed along with the Minister of Justice of Uzbekistan Ruslanbek Davletov, provides establishment of a UN multilateral trust fund for $131 million, “as well as for any assets permanently confiscated in the future as part of the ongoing criminal case against Gulnara Karimova.”

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As noted above, by 2014, Karimwa’s excesses had gone too far, and her own father placed her under house arrest. Karimova died in 2016, and the new Uzbek administration, led by Shavkat Mirziyoyev (who was prime minister for 13 years under Karimov), filed criminal charges against her. In 2017, she was sentenced to 10 years in prison, commuted to five years of house arrest. Two years later, in 2019 she was arrested again for allegedly violating the terms of her house arrest. In 2020she was tried again in Uzbekistan (again behind closed doors), found guilty of extortion, money laundering and other charges, and sentenced to an additional 13 years and four months.

In 2012, Swiss authorities froze around 800 million Swiss francs ($842 million) amid various investigations into Karimova’s business dealings. $131 million was finally confiscated in 2019, when the government of Uzbekistan began to seriously seek the return of these funds to Tashkent.

As of 2020, over $715 million in assets were still frozen by the Swiss government and are being prosecuted. Some of these funds may eventually be transferred to a new trust if they are also permanently forfeited.

June 2022however, a Swiss court ruled that the country’s attorney general had failed to prove that some 293 million Swiss francs ($303 million) were obtained from corruption by a foreign official. According to Karimova’s lawyers, the court found that Karimova could not be considered a public official. On Twitter, the Uzbek Forum for Human Rights said the decision was problematic because in autocratic countries like Uzbekistan, official government functions are often intertwined with family interests. Karimova may not have had an official government position (although she sometimes did), but everyone knew whose daughter she was, and she may have used this influence for personal gain.

Karimova’s assets are frozen not only in the Swiss Alps, but also in other places, including the US, Sweden and the Netherlands.

In March 2019, the US Department of Justice stated in ad that the Russian telecommunications company MTS agreed to pay $850 million in connection with bribing Uzbek officials. The Department of Justice also announced opening of charges against Karimova and Bekhzod Akhmedov, former CEO of MTS’s Uzbek subsidiary, “for their involvement in a bribery and money laundering scheme involving more than $865 million in bribes from MTS, VimpelCom Limited (now VEON) and Telia Company AB (Telia) to a former Uzbek official to secure her assistance in entering and maintaining their business operations in the telecommunications market of Uzbekistan”.

In May 2020, France decided to simply send the $10 million confiscated from Karimova back to Uzbekistan with no strings attached. Proponents of accountability have called it “missed opportunity“.

The $131 million Swiss case is a more subtle approach, focusing on the transparency and accountability that anti-corruption activists emphasize is essential. Corruption remains a major problem in Uzbekistan, and while activists agreed that Karimova’s millions should return to the country, many were concerned that the cash flow would again be diverted.

According to the Swiss authorities, according to a recent agreement, the funds in the new trust “will be used to advance the SDGs [Sustainable Development Goals] in Uzbekistan“.

Funding will be provided for projects in line with the United Nations Sustainable Development Cooperation Framework (UNSDCF) for Uzbekistan.

The projects will be implemented by the UN agencies participating in the fund, in collaboration with various implementing partners. They will be monitored in accordance with the monitoring and evaluation system established for the fund, as well as the rules and regulations of the UN system. Civil society organizations will act as consultants.