Following the admission by embattled Nordic telecoms giant TeliaSonera this week that its operations in Kazakhstan and four other countries had breached the company’s own ethical requirements and may have broken the law, the firm is bracing itself for a new round of scrutiny.
TeliaSonera's dealings with the rich and powerful in Uzbekistan, where its payments of millions of dollars to an intermediary of Gulnara Karimova’s, the president’s daughter, have already put the company in the crosshairs of investigators in Sweden, The Netherlands and the United States. TeliaSonera is also linked to a money-laundering probe in Switzerland in which Karimova is a suspect.
Now questions are being asked about TeliaSonera’s dealings in neighboring Kazakhstan, where it owns the Kcell brand (with 14.1 million subscribers in a country with a population of 17 million). Kazakhstan’s media has previously noted some striking similarities between TeliaSonera’s modus operandi in the two countries—namely its dealings with business people well connected to the powers-that-be and with links to rival companies.
As Russia, China and Central Asian countries plan for post-2014 Afghanistan, they are floating plans to create "mini buffer states" in northern Afghanistan in order to stanch the potential flow of Islamism and violence into the post-Soviet space.
The Shanghai Cooperation Organization, the China-led security organization that also includes Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, held a meeting of member state defense ministers this week in Khujand, Tajikistan. The participants made the usual vague public statements about how the SCO was playing a key role in regional stability. “We do not share the West’s optimism about the chances of stabilising the situation in Afghanistan following continued actions by international terrorist and Islamic extremist organisations,” said Russian Defense Minister Sergey Shoigu. “The SCO is turning into one of most important structures, to our mind, not only in Central Asia, but also in the East,” he added. The defense ministers also discussed the upcoming iteration of the annual Peace Mission joint military exercises, to be held this year in August in China's Inner Mongolia.
Nordic telecoms giant TeliaSonera is at the heart of several international corruption probes involving its activities in Uzbekistan. Now it says it may have broken the law in neighboring Kazakhstan and other countries, as well.
An external review of TeliaSonera's dealings in five countries has found that “several transactions, and actions during [2007-2013] have been conducted in a manner inconsistent with sound business practice and TeliaSonera’s ethical requirements,” board chair Marie Ehrling told an Annual General Meeting on April 2.
“It cannot even be ruled out that certain conduct has been in violation of the law,” she said.
The review, commissioned last April and conducted by international law firm Norton Rose Fulbright, covered Nepal, Kazakhstan, Azerbaijan, Tajikistan, and Georgia but focused mainly on the first three countries.
Ehrling did not specify which transactions may have been unethical or illegal, but said the review mainly concerned the “establishing of operations and acquisitions of companies and licenses.”
Areas of concern included “substantial payments to advisors and intermediaries for, among other things, lobbying activities; lack of control of business partners; and inadequate handling of warning signs.”
“One area singled out is the inadequate governance of the Eurasian operations,” Ehrling said.
American MRAPs in depot in Afghanistan. (photo: 1st Lt. Henry Chan 18th CSSB Public Affairs)
Central Asian countries are still eligible to receive used American military equipment from the war in Afghanistan. But it seems they may be losing out in the giveaway to their neighbors to the south: Afghanistan, India, and Pakistan.
At issue are the Mine-Resistant Ambush-Protected (MRAP) vehicles, a staple of the Afghanistan war. U.S. officials say that there are 1,600 of them in Afghanistan and that they are willing to give them away to allies. One possible recipient is Uzbekistan; this was apparently on the agenda when a high-level delegation from Tashkent visited Washington in December.
But controversy over the giveaway program spiked last month when the Washington Post published a story saying that Pakistan was among the candidates to receive MRAPs. This resulted in consternation in Afghanistan, where mistrust of Pakistan is strong. And U.S. officials disputed the story. “Our commitment to the Afghan people and the Afghan National Security Forces is unwavering,” said Marine General Joseph Dunford, commander of all U.S. and NATO troops in Afghanistan.
On Monday, the State Department issued a carefully worded statement about the U.S.'s plans. "U.S. military equipment leaving overland from Afghanistan through Pakistan or via the Northern Distribution Network is part of the overall process of removing equipment as our forces draw down in Afghanistan. We have not and do not intend to transfer this equipment to the governments neighboring Afghanistan."
Authorities in Uzbekistan are taking their paranoia about the power of the Internet the next logical step, installing video cameras in private Internet cafes and requiring café owners to store detailed records of the websites customers visit.
The new regulations also ban Internet cafes from the basements of multi-story buildings. Since many Internet cafes are currently located in basements, this provision will significantly cut their numbers, forcing many to close immediately, thus curbing access to the Internet.
Reporters Without Borders annually includes Uzbekistan on its "Enemies of the Internet" list for blocking access to international media websites and websites critical of the Uzbek government.
Tashkent tries to offer its netizens’ alternatives. In February, developers unveiled Bamboo, an almost-exact replica of Twitter. Developers have also launched Uface.uz and Sinfdosh.uz (clones of Facebook and Russia’s Odnoklassniki). But all this effort has met little success: Nothing seem to counteract ordinary Uzbeks' skepticism when it comes to the quality of local products and the authorities’ intentions.
The post-Soviet states of Central Asia have been generally cautious in their response to Russia’s annexation of Crimea, likely concerned that an aggressive Russia could have unpredictable designs on its “near abroad.” Just as we saw before Crimea held a vote to secede from Ukraine and join Russia on March 16, statements from Central Asian governments continue to mix support for their powerful neighbor with wariness about developments.
After Bishkek blasted “all acts aimed at destabilization of the situation in Ukraine” on March 11, the Kyrgyz – who are dependent on Russian economic aid and migrant remittances – came around to see Moscow’s point of view. In a March 20 statement, Kyrgyzstan’s Foreign Ministry recognized Crimean secession as “the will of an absolute majority.”
Uzbekistan, which is a tad less dependent on Russia and generally takes as independent a point of view as it can muster, issued a statement March 25 respecting Ukraine’s territorial integrity, calling for negotiations and the respect for international law. This is Uzbekistan’s
"firm and invariable" stance, the Foreign Ministry said, without mentioning Russian authorities.
Tajikistan – which would appear to have plenty in common with the corrupt dictatorship of ousted Ukrainian President Viktor Yanukovych – has been silent. So has gas-rich, totalitarian Turkmenistan.
After a spectacular, months-long campaign to discredit her mother, her sister, and Uzbekistan’s secret police boss, the elder daughter of Uzbek strongman Islam Karimov went silent in mid-February. Reports that Gulnara Karimova has been held against her will could not be independently confirmed, but she’s been unavailable for comment as prosecutors in two European countries have named her as a suspect in corruption investigations.
Now the BBC says it has received a letterthat appears to be from Karimova. In it, the author claims she is under house arrest in Tashkent and has been beaten by men working for her notoriously brutal father.
"I am under severe psychological pressure, I have been beaten, you can count bruises on my arms," reads the letter, apparently smuggled out, which the BBC reproduced in part on March 24. "How naive I was to think that the rule of law exists in the country.”
A graphologist specializing in Cyrillic handwriting told the BBC that there is a 75 percent chance the unsigned letter was written by the scandal-plagued Karimova, Uzbekistan’s former ambassador to the United Nations, who describes herself on her website as a “poet, mezzo soprano, designer and exotic Uzbekistan beauty.”
"I never thought this could happen in a civilized, developing nation that Uzbekistan portrays itself as," the letter says, complaining of "Pinochet-style persecution."
I got to see a little bit of Uzbekistan, but only from the air. Here's what's left of the Aral Sea.
I wanted to shoot a story about Uzbek weddings, lavish affairs that are the stuff of legend among the Uzbek migrant population in Moscow, where I live.
As a Russian citizen, I don’t need a visa to visit Uzbekistan. But I knew the country is deeply suspicious of journalists of any sort. So as not to look too professional, I selected only a few lenses for my trip. And, another precaution: I deleted some phone contacts, cleared the browsing history on my iPad, deleted the Facebook app.
Around midnight last Wednesday I took off from Moscow’s Domodedovo Airport and at 5.30 a.m. landed in Tashkent. My future fixer was at the airport to fetch me and take me to a barbeque at his home.
At passport control, I waited behind a crowd of Uzbek migrant laborers. But when it was my turn with the immigration officer, something was clearly wrong. He scanned my passport several times, then frowned and said, gesturing to a bench, “Bro, would you be so kind to wait a little bit over there?”
The crowd thinned and disappeared. After maybe half an hour, two polite men in the olive-green uniforms of border agents across the former Soviet Union asked me to follow them. As we walked, they asked if I’d ever been to Uzbekistan. Yes, I’d lived briefly in Tashkent as a first-grader, but I grew up in Russia. And I’d visited some friends there in 1998.
They looked disappointed. I asked what was happening and they said only that I was on a “blacklist” and that I was being sent home.
At the gate, the olive-green men approached an attendant for the return Moscow flight and said, “This guy is being deported back to Russia. Find him a free seat.” They handed her my passport.
In the second major utility tariff increase in six months, Uzbeks will soon begin paying about 10 percent more for water, gas and electricity. Gasoline, when consumers can get it, soared in price repeatedly last year and another 20 percent this January. Yet officially, inflation somehow manages to stay under 7 percent.
Uzbekneftegaz, the national oil and gas company, http://www.ung.uz/business/tarifs " title="" target="">said this week that according to a March 17 Finance Ministry resolution, the price of natural gas would rise 8.9 percent on April 1. The price last rose 8.5 percent in October 2013.
The state-run electricity provider, Uzbekenergo, announced on March 18 that its tariffs would rise 9.5 percent on April 1. Electricity prices climbed 7 percent last October.
On March 13 the state-run Suvsoz water-supply company said that in Tashkent, Uzbekistan’s capital, water prices would jump between 9.8 and 10.5 percent above rates set last October. Suvsoz said the hike was "due to an increase in the prices of electricity and other resources."
The Gazeta.uz news website reported on March 14 that tariffs for hot water and heating would climb 11.7 percent in Tashkent next month because of "a growth in prices of energy sources and materials."
Hot on the news that Gulnara Karimova, daughter of Uzbekistan’s strongman president Islam Karimov, is a formal suspect in a Swiss money-laundering investigation, embattled Nordic telecommunications giant TeliaSonera has become the target of a related corruption probe in the United States.
“TeliaSonera has been informed that the U.S. Department of Justice (DOJ) has an ongoing investigation regarding TeliaSonera’s transactions in Uzbekistan,” the company said in a March 17 statement. “The DOJ has sent a request for documents to TeliaSonera. In addition, TeliaSonera has received a request from the U.S. Securities and Exchange Commission (SEC) to submit documents and information related to Uzbekistan.”
The company made the announcement five days after revealing that two of its daughter companies, TeliaSonera UTA Holding B.V. and TeliaSonera Uzbek Telecom Holding B.V (the holders of TeliaSonera’s operations in Uzbekistan, where it operates the Ucell brand), are under investigation in The Netherlands in a bribery and money-laundering case.
“Dutch authorities have requested collateral for any financial claims which may be decided against TeliaSonera UTA Holding BV,” TeliaSonera said on March 17, adding that the request for collateral stands at 10-20 million euros.