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Gulnara Karimova: A Baseline for Grand Corruption Studies in Uzbekistan
The eldest daughter of Islam Karimov, Gulnara Karimova, is currently serving a custodial sentence in
Uzbekistan for a series of criminal convictions relating to corrupt activity that a range of authorities
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Edward Lemon, Mirziyoyev’s Uzbekistan: Democratization or authoritarian upgrading?, Foreign Policy Research Institute, June 2019,
https://www.fpri.org/wp-content/uploads/2019/06/lemonrpe4.pdf
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Transparency International define grand corruption as ‘the abuse of high-level power that benefits the few at the expense of the many,
and causes serious and widespread harm to individuals and society. It often goes unpunished’. See, anti-corruption glossary, Transparency
International, https://www.transparency.org/glossary/term/grand_corruption
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Mutaxassislar: Sardobadagi falokat sababchisi shamol emas¸ qurilishlardagi dahshatli o‘g‘riliklardir!, Radio Ozodlik, May 2020,
https://www.ozodlik.org/a/30587855.html; Маҳаллий нашр Сардобада кўпқаватли уйларни қурадиган ширкат Ортиқҳўжаевга
алоқадорлигини фош қилди, Radio Ozodlik, May 2020, https://www.ozodlik.org/a/маҳаллий-нашр-сардобада-кўпқаватли-уйларни-
қуриш-ҳуқуқини-олган-ширкат-ортиқҳўжаевга-алоқадорилигини-фош-қилди/30625879.html
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assert took place between 2000 and 2012.
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This activity has also been the subject of international
asset forfeiture, civil litigation, and foreign jurisdiction prosecutions.
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Researchers, as a result, have
access to granular detail on the underpinning activity. This classic case, therefore, serves as an
instructive baseline window into a wider system.
The first point to note is that the evidence, and judicial findings, indicate Karimova headed a
powerful organised crime syndicate that was embedded within the Uzbek state.
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This network
featured an inner core of fixers, managers, envoys and proxies, who were intimately involved in the
group’s day to day business affairs. In addition, the syndicate also enjoyed ties to a non-core set of
high profile fixers and envoys, who prosecuted the group’s affairs on a needs basis
Syndicate activities, the evidence indicates, were conducted with the assistance and complicity of
senior state officials, and enacted through a diverse range of state organs. These organs included
cabinet, government committees, ministries, the courts, sector regulators, and the security services.
These different state levers enabled the syndicate to expropriate businesses, monopolise markets,
solicit bribes, and administer extortion rackets. Through these activities the syndicate was able to
develop a diverse portfolio of business interests across a range of sectors including services,
construction, manufacturing, industrial, retail, natural resources, and finance. Once markets and
businesses had been seized, they continued to be operated on a privileged basis, drawing on special
state treatment, reportedly generating significant profits for the syndicate.
A range of international actors and jurisdictions have in practice proved essential buttresses for this
activity. It appears European and North American businesses have been consenting parties to
protection rackets. Foreign telecommunications providers in particular, were aware of the Karimova
syndicate’s racketeering activities, and the ultimate beneficiary. While overseas banks in the United
Kingdom (UK), Switzerland and Latvia have been employed as key conduits for syndicate money
laundering operations. It is less clear from the public record how culpable these financial institutions
are. However, the group’s primary bankers in these regions have a documented criminal history. A
range of corporate services were offered by the British Overseas Territories. This enabled syndicate
activities to be conducted with secrecy and security.
Karimova used these arrangement to grow her own personal wealth. She was able to obtain
productive assets that could generate profit, and then operate them under privileged conditions that
augmented financial returns. This income was supplemented by rents derived from non-productive
assets such as real-estate, and bribes/protection payments solicited from companies seeking market
access. Businesses were also in a position where they had to accommodate syndicate commercial
proposals, regardless of merits. Failure to do so risked state persecution and loss of assets. The
wealth generated was transformed into political capital, through funding a wide range of charitable
initiatives that positioned Karimova as a potential successor to her father. However, this was a highly
competitive process at an elite level. Subsequently Karimova herself experienced expropriation and
imprisonment after influential rivals organised against her. This is one potential exit point for ‘game’
losers.
Subsequent investigative research by the author indicates that the schemes and practices
summarised above, were at the more extreme end of the spectrum in terms of volume and the
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Gulnara Karimova sentenced again for corruption, financial crimes, Radio Free Europe/Radio Liberty, March 2020,
https://www.rferl.org/a/gulnara-karimova-sentenced-again-for-corruption-financial-crimes/30495071.html
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See for example, Dutch prosecution of Uzbek-owned firm, Uzbek Forum for Human Rights, August 2016
https://www.uzbekforum.org/dutch-prosecution-of-uzbek-owned-firm-takilant/
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To survey the primary and secondary sources on which this summary is based, see Lasslett, Kristian. Kanji, Fatima. McGill, Daire. 2017. A
dance with the cobra: Confronting grand corruption in Uzbekistan. London: International State Crime Initiative. Available online:
statecrime.org/data/2017/08/Full-Report-with-Executive-Summary.pdf
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tactics employed. However, the opaque use of state power to obtain unfair commercial advantage,
the use of complex offshore structures that conceal beneficial ownership and conflicts of interest,
the provision of state aid to politically exposed entities without transparent rationale, the use of
illegal methods to make augmented profits, expropriation and intra-elite cannibalisation of
corporate assets, and the cultivation of significant private business portfolios by senior state officials
and their family, remain systemic features of Uzbekistan’s political-economy. Karimova’s case
represents an instance where these dynamics were taken to their most extreme. But evidence
indicates that in the Mirziyoyev era, these dynamics remain an enduring mediation that will shape
reform outcomes. One recent example that exhibits some of these ongoing challenges is the
controversial mega-project, Tashkent City.
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