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Under Shadow Of Sanctions, Uzbek Leader Looking For 'Understanding' On EU Trips

German Chancellor Olaf Scholz (right) shakes hands with Uzbek President Shavkat Mirziyoev upon the latter's arrival in Berlin on May 2.
German Chancellor Olaf Scholz (right) shakes hands with Uzbek President Shavkat Mirziyoev upon the latter's arrival in Berlin on May 2.

During festivities marking spring equinox in Tashkent in March, Uzbek President Shavkat Mirziyoev attended an event run by Uzbekistan's German diaspora to offer a glowing assessment of ties with the country where he would soon make a two-day visit.

"We already have a system with them. We are well understood [in Germany] and I really appreciate it," Mirziyoev was quoted as saying by Uzbek media.

Mirziyoev was hoping for just that, understanding, as he touched down in Berlin on May 2, less than a year after his government used lethal force to crack down on protests in the autonomous region of Karakalpakstan, and just a few days after his country approved a new constitution allowing him to stay in power until at least 2040.

Understanding, perhaps, for the difficult position that Tashkent finds itself in the second year of its close partner Russia’s unprovoked war in Ukraine, while officials from the West jet into Central Asian capitals to issue warnings about secondary sanctions.

Maybe also an understanding of his government’s binding ties to Alisher Usmanov, the Uzbekistan-born tycoon whose proximity to the Kremlin made him an early target for Western sanctions shortly after Moscow’s invasion began.

According to Mirziyoev’s office, the strongman was well received in Berlin.

German Chancellor Olaf Scholz pledged support for Tashkent's bid to join the World Trade Organization and accelerate the signing of the Enhanced Partnership and Cooperation Agreement with the European Union during their May 3 meeting in the German capital, a presidential press release said.

German investments in the economy have now reached $5.5 billion, with most of them made in recent years.

In an audience with the heads of German banks and companies including Knauf, Siemens Energy, and Deutsche Bank the same day, Mirziyoev said he wanted foreign investors to associate his country with "stability, reliability, and predictability," and stressed the new constitution's provisions for investors.

"We are ready to create the conditions for every German businessman to feel free and confident in our country. By combining the advanced developments and innovative technologies of Germany with the resources and human potential of Uzbekistan, we will be able to achieve great results," he said.

Mirziyoev's visit saw a small group of Uzbek rights activists gather outside the Federal Chancellery and shout slogans against the president, before a group of purported pro-Mirziyoev Uzbeks arrived and began shouting them down, according to an RFE/RL reporter.

But Temur Umarov, a fellow at the Carnegie Endowment for International Peace, told RFE/RL that Germany and many other EU countries are mindful that Uzbekistan's traditional partner, Russia, is "increasingly unreliable and predictable" and are "happy to provide an alternative."

Uzbekistan-born billionaire Alisher Usmanov (file photo)
Uzbekistan-born billionaire Alisher Usmanov (file photo)

Regarding Usmanov -- who reportedly backed the former prime minister's rise to power seven years ago and has since become a key investor for Tashkent -- Umarov believes it is unlikely that Mirziyoev will have openly lobbied for the industrial and banking magnate’s removal from the sanctions list during his talks with Scholz.

"He won't be speaking out loud about removing Usmanov from the sanctions list, as that would create a reputational risk. But I can imagine that between some [Uzbek and German] officials there will be discussions about reducing the impact of sanctions on individuals who are important to Uzbekistan," Umarov said.

The Uzbek Foreign Ministry did not immediately respond to a request from RFE/RL about whether Mirziyoev’s talks in Germany might touch on Usmanov.

But German news magazine Der Spiegel reported in November that the two countries have already held urgent talks over a financial impropriety investigation targeting Usmanov in Germany, where the oligarch is believed to own several lavish properties.

Der Spiegel even reported that Germany’s ambassador in Tashkent was summoned by the Uzbek Foreign Ministry in the wake of raids on the properties by the sumptuous Tegernsee lake in Bavaria.

The German Embassy did not respond to a request from RFE/RL for comment to confirm the report.

Getting Back To Business

Mirziyoev has been hailed for opening up Uzbekistan -- to tourism, foreign investment, and a limited degree of freedom of expression that was almost entirely absent for much of the long reign of his intractable mentor, Islam Karimov, who died in 2016.

That small opening has not extended to political competition, however.

The April 30 referendum was a procession for a "yes" to constitutional changes, with no "no" campaign and the changes reportedly passing with more than 90 percent of the vote.

It was opposition to an earlier and later overhauled version of the draft, which would have limited Karakalpakstan’s autonomy, that triggered July unrest and a crackdown there, with at least 21 people killed according to the official toll.

Writing ahead of Mirziyoev's visit, Hugh Williamson, the Berlin-based Europe and Central Asia director at Human Rights Watch, said a warm welcome for Mirziyoev "should not come at the expense of a frank exchange on human rights concerns," and he called for Uzbekistan to be held accountable for the violence in Karakalpakstan.

"Given the Uzbekistan-German bilateral relationship, Germany has an important role to play in urging President [Mirziyoev] to make good on his many reform promises," Williamson said.

But Edda Schlager, a regional correspondent for the German foreign-trade-promotion agency Germany Trade & Invest told RFE/RL that there is still "optimism" for Uzbekistan among German businesses familiar with the country, a factor that appears to drive the political relationship.

A German-Uzbek business forum in Berlin on May 2 gathered 250 leaders of large companies, holdings, banks, ministries, departments, and industry associations from the two countries, according to the pro-government Uz Daily website.

The same website quoted Uzbek Deputy Prime Minister Zhamshid Khodjaev as saying that bilateral trade surpassed 1 billion euros ($1.1 billion) in 2022, after doubling over the last five years.

“Uzbekistan is a large market, 35 million [people] with a young population, and reforms regarding privatization and so on are ongoing,” Schlager said.

“I think German companies are aware of politics, as far as it concerns the business climate and further reforms, but perhaps don’t want to be aware of the rights issues that Uzbekistan still has.”

Sanctions Threat

Mirziyoev was visiting Uzbekistan on the invitation of German President Frank-Walter Steinmeier, a vocal backer of his reforms who became one of the most high-profile Western politicians to go to Tashkent in recent years when he visited in 2019.

Mirziyoev will travel to Italy next month.

The trips come after a spring busy with Western sanctions-related activity in Central Asia, as David O'Sullivan, the European Union's special envoy for the implementation of sanctions, and Elizabeth Rosenberg, the assistant secretary for terrorist financing and financial crimes at the U.S. Treasury Department, visited both Kyrgyzstan and Kazakhstan.

Those trips -- added to visits to the same countries by British Foreign Ministry Sanctions Director David Reed just over a week ago -- have sparked concerns that 2023 will be the year that secondary sanctions arrive in a region that is already suffering from Ukraine war fallout, but which is an obvious theater for Russian circumvention tactics.

Uzbekistan, unlike Kazakhstan and Kyrgyzstan, is not a member of the Russian-led Eurasian Economic Union trading bloc.

But authorities are already living firmly in the shadow of sanctions due to their relationship with Usmanov, whose role in the economy of what Mirziyoev calls New Uzbekistan, is outsized.

According to Reuters, Usmanov became a regular fixture in Uzbekistan in the period immediately after the demise of Karimov, whose distrust of oligarchs was well-known.

Usmanov appeared to have backed then-interim leader Mirziyoev in a slow-moving power struggle with two other Uzbek powerbrokers, years after the politician’s niece and the businessmen’s now-late nephew had reportedly married and started a family.

Uzbek authorities later acknowledged that the government was renting Usmanov’s private plane for Mirziyoev's official business trips, although the terms of the arrangement were not disclosed and the Airbus A340-300 passenger liner became a top target for confiscation when sanctions were rolled out.

The most recent sanctions to land on Usmanov targeted USM Holding, which the U.S. Treasury called "the primary entity through which Usmanov owns and controls the majority of his companies."

Unlike the personal sanctions against Usmanov launched by the United States, the European Union, the United Kingdom, and Switzerland last year, the Treasury Department only mentioned London as joining in the more targeted sanctions against USM Holding.

While most of USM's biggest assets are in Russia, the move also targeted Akhangarancement, Uzbekistan's largest cement company, and Digital Invest, a company that the privately owned Uzbek news website indicated owns a stake in telecom major Ucell and "operates a labeling system" in Uzbekistan.

USM last year quickly divested itself of a recently purchased majority stake in Uzbekistan’s largest commercial bank, Kapitalbank, as the first set of sanctions hit Usmanov last year.

Usmanov acknowledged in an interview with Forbes in July that the sanctions create "obstacles -- including for my activities in Uzbekistan, where I have been spending most of my time in the last few years," calling them unjust and declaring his intent to fight them.

European Council President Charles Michel (left) shakes hands with Mirziyoev while visiting Tashkent in October 2022.
European Council President Charles Michel (left) shakes hands with Mirziyoev while visiting Tashkent in October 2022.

The extent to which the Uzbek state has been roped into this defense is still unclear, but Davide Cancarini, an independent researcher from Central Asia, argued that Uzbek authorities likely "pleaded Usmanov's cause" during European Council President Charles Michel’s visit to Tashkent in October, with the daily Financial Times reporting that fall that Tashkent was lobbying Brussels on Usmanov.

Like Umarov of Carnegie, Cancarini argues that it is unlikely Mirziyoev will do any pleading himself during his June trip to Italy, where Usmanov has also had a rough ride, notably seeing his $20 million Sardinian villa confiscated by authorities.

But Mirziyoev will once again be hoping to benefit from a “pragmatic approach” to his country, said Cancarini, this time in order to kick-start a long-term partnership with a European Union founding member and secure Tashkent's "further international political legitimization."

"I believe that the Italian government will barely mention the issue of human rights," Cancarini told RFE/RL, predicting that security and the economy will top the agenda.

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    Chris Rickleton

    Chris Rickleton is a journalist living in Almaty. Before joining RFE/RL he was Central Asia bureau chief for Agence France-Presse, where his reports were regularly republished by major outlets such as MSN, Euronews, Yahoo News, and The Guardian. He is a graduate of the University of St. Andrews in Scotland. 

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