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Kazakh Officials, Family Members To Be Barred From Having Bank Accounts Abroad

Kazakh government officials will no longer be able to have bank accounts in foreign countries as part of an effort to improve financial regulations. (illustrative photo)
Kazakh government officials will no longer be able to have bank accounts in foreign countries as part of an effort to improve financial regulations. (illustrative photo)

NUR-SULTAN -- Kazakhstan's government has announced that officials and members of their families will be barred from having bank accounts abroad amid growing public frustration over corruption following several scandals that have shed light on the enormity of their unexplained offshore wealth..

Finance Minister Erulan Zhamaubaev said on September 2 that the plan is linked to his ministry's program to fight against the shadow economy and to enhance the development of financial regulations.

His announcement came a day after President Qasym-Zhomart Toqaev said in an address to the nation that it was necessary as of 2021 to bar government officials, lawmakers, and judges from having bank accounts abroad to prevent corruption.

Kazakhstan, once the poster child for economic reform in post-Soviet states, has seen its image tarnished in recent years as reports emerge of officials and their family members owning mansions and large bank accounts abroad.

Earlier this year, Britain’s National Crime Agency asked a grandson of former president of Kazakhstan Nursultan Nazarbaev to explain where he got the money to buy a multimillion-pound mansion along one of north London’s most expensive streets.

Though he kept the London mansion and other properties, the global media attention put the entire Nazarbaev family in an unwelcome spotlight, especially at home.

"For sure, a public announcement of this kind is meant to signal to the public, that has grown wary of corruption scandals, that the government intends a serious crackdown on graft and kleptocracy," Alexander Cooley, the director of Columbia University's Harriman Institute and author of a book on corruption in Central Asia, told RFE/RL.

Zhamaubaev said that all bank accounts in the country will be checked in line with a program on sharing information between member-states of the Organization for Economic Cooperation and Development (OECD).

The OECD is an international group of 37 countries with market economies that cooperate with more than 70 nonmember economies to promote economic growth and sustainable development.

Zhamaubaev did not specify when exactly the plan will be implemented or what would happen if officials and their family members were found to have offshore accounts.

Cooley said he doubted the policy will stop Kazakh elites from holding money offshore because they rarely conduct foreign transactions in their own names.

"Instead, their intermediaries use nested networks of offshore entities to conceal and store assets across multiple jurisdictions and domains," he said.

Deciphering the networks would be a costly and time-consuming process made “even more challenging” by the powerful personalities being investigated, Cooley said.

However, he said the new policy could potentially be a "powerful weapon" in a domestic political struggle.

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