CHRI investigation evidences flaws in Uzbekistan’s governance process: implications for stolen asset return

31 May 2019

Fatima Kanji

An investigation led by the Corruption and Human Rights Initiative (CHRI) has scrutinised the efficacy of Uzbekistan’s commitment to governance and anti-corruption reforms, through a spotlight investigation into the business interests of the Mayor of Tashkent, Jahongir Artikhodjaev. The report raises critical questions on whether Uzbekistan has truly committed to breaking away from bad habits of the past, namely grand corruption; or if what we’re witnessing is merely a reorientation of more of the same.

CHRI researchers examined Uzbekistan’s governance and business integrity structures within the context of Artikhodjaev’s role as Mayor of Tashkent and his flourishing business empire. On the one hand, they noted reform in greater public engagement of senior government officials and private business, as well as improvements in the ‘depth and breadth’ of public data releases by various government authorities. However, there were significant concerns raised over the high-risk political environment which endured through the lack of transparency and clear, accessible criteria to select businesses in receipt of state aid, lucrative business opportunities and preferential treatment. Broader concerns are raised on transparency and governance mechanisms in procurement, decision-making, and public administration including the lack of information on beneficial ownership, the financial standing of Limited Liability Companies as well as the absence of publicly robust procedures on managing conflict of interest. Collectively this currently means there is limited ability for public scrutiny on examining the conduct of public officials and companies benefiting from government-funded contracts as well as an ability to assess conflicts of interests and preferential treatment within broader Uzbek governmental decision-making.

The report findings should also be viewed within the broader context of Uzbekistan’s recently published Anti-Corruption Plan (2019-2020). Among other things, Uzbekistan plans on: introducing a system of declaring civil servants incomes, ensuring consistent salaries for civil servants; increasing accountability and transparency in the activities of state bodies and organisations, introducing whistle-blower protections; as well as ensuring freedom of activity of civil society institutions, the media and their conduct in the monitoring in the implementation of anti-corruption measure. The government has also committed to drafting a ‘Road Map’ aimed at developing comprehensive benchmarks for monitoring anti-corruption reform. Whilst this public policy commitment has been welcomed by observers – a notable development in itself – it would be far too premature to draw any conclusions at such an elementary stage, particularly given the high-risk political backdrop against which this takes place, in addition to the Uzbek government’s tendency to adopt progressive laws, as a window dressing, but the reality is in complete discord with the law.

These developments should also be viewed within the context of the high-profile asset recovery process under way of Gulnara Karimova’s illicit assets to Uzbekistan. As CHRI’s findings highlight, Uzbekistan still endures a highly risky conflict of interest environment, with a deeply embedded system of patronage within its political system, seeping into all areas of public and business life. This means there is a significant likelihood returned assets could be compromised, misused or misappropriated in favour of those retaining a close ear to power and authority.

With this in mind, we recommend awaiting tangible results to Uzbekistan’s program of anti-corruption reforms before returning Karimova’s assets back to Uzbekistan. Asset holding countries should wait until at least the end of 2020 (the end-date for the reform plan) when the anti-corruption program is supposed to deliver first results. However, by tangible results we mean not only the adoption of new laws, but changes in practice and rigorous implementing in these laws.

Also, in line with Uzbekistan’s commitment to reform, it is recommended that an independent, open-tendering process for organisations, companies and individuals seeking to support the repatriation of assets and the remediation process to victims of corruption is developed in line with recommendations proposed by Uzbek Civil Society Activists.

These steps would provide a ground-breaking, highly visible opportunity to test Uzbekistan’s credible commitment to reform, created within a framework of good practice structures, potentially setting a precedent not only for Uzbekistan’s reform agenda; but acting as an important global standard for international asset return frameworks.

See full report here: