United Kingdom was and to some extent still remains, a magnet for the wealth of African and ex-USSR oligarchs. They come with an enormous amount of money and invest it in fashionable mansions, first-class education for their kids and so on. At the first look it is useful for Britain and we shouldn’t be too discreet about the money inflow. In fact, it was an official policy for the long time.

It has been changed after UK took more active role in international initiatives to purge the financial system of offshore tax havens and criminal money laundering schemes. Great Britain benefits from it in many ways and the profits are actually higher than fishing in the murky waters of third-world criminals.

United Kingdom has started an extensive campaign to check the origins of the wealth of richest foreign owners of the luxury property in the country. Nazarbaev’s relatives have an extensive record of owning such properties. The oil wealth in the otherwise poor country has been accumulating for a long time in Britain. Timur Kulibayev, the richest man in Kazakhstan may suffer some losses in UK due to Vitol/Ingma affairs. His involvement in the case is unexplainable in the worst possible sense.

Timur Kulibayev, one of the Kazakhstan’s sons-in-law dictator Nursultan Nazarbaev, remains silent about possible NCA prosecution. Meanwhile, the team of lawyers of the wealthiest citizens of Central Asian republic begin to build an extensive trenches to defend Kulibayev’s wealth from being confiscated according to the Unexplained Wealth Order. The latest proceedings on Dariga Nazarbaeva and her sons leaves no space for doubts about the serious intentions of the British Justice.

Timur Kulibayev and his family are not the fans of the Britain. He and his wife Dinara prefer Swiss lakes as their resorts of choice. Kulibayev family owns two most expensive beach-front villas at Lake Geneva. Purchase of the ill-fated Prince Andrew’s Sunninghill Park in Berkshire was only a business necessity, as the media considers, to buy the loyalty of the House of Windsor. The forthcoming events will reveal if there is much of this loyalty left.

Explaining the Unexplained Wealth Order

The UWO legislation is unprecedented in the history of the British justice. Known by the ‘McMafia’ nickname the order allows to confiscate assets, both in real estate and in bank accounts, of wealthy persons who are unable to prove the legitimate source of the income. The order targets African and ex-USSR oligarchs who settled down in Britain with money they stole from their countries.

Defending the Sunninghill Park

According to the press suspicions Timur Kulibayev has covertly paid to Prince Andrew some sort of protection fee. Sunninghill Park was sold for 15 million pounds despite he was openly displayed for three million pounds less. These three million are a secret form of bribe. Prince Andrew denied the accusations and never was prosecuted. However, according to UWO Timur Kulibayev may face the legal process to prove that his wealth is clean of any wrongdoings.

Kulibayev family owns in one form or other billions and billions in assets and cash. The biggest bank in the country belongs to him as well as oil industry and mining companies to name a few. His wealth, of course is viewed in connection to Nursultan Nazarbaev himself. Timur Kulibayev is a fixer or the wallet of the retired dictator. Kulibayev, among some other local oligarchs are serving as a personal finance managers for the regime.

Thus Timur Kulibayev is in desperate need to present himself as a stand-alone businessman. It will be difficult to prove that his wealth is not associated with the regime, even impossible. However it is not only difficulty. The business itself leaves many questions unanswered, according to the Public Eye investigation.

There are two ways for commodities traders operating in jurisdictions where the rule of law is weak to gain market share. Both are risky and rely on the fact that commodity trading is not regulated in Switzerland.

Strategy n°1

The traditional strategy involves outsourcing the risk by paying intermediaries. As soon as anti-corruption agreements have been signed, the intermediary is free to pay all or part of their commission to public officials tasked with awarding the desired contract. As Public Eye painstakingly exposed, this is the option chosen by Gunvor in Congo-Brazzaville – and that caused the Office of the Attorney General of Switzerland to initiate proceedings against the company for possible organisational shortcomings.

Strategy n°2

Just as adventurous, the second strategy involves association with politically exposed persons (PEPs) in a joint venture which can then enter into contracts. From 2003 onwards, Vitol opted for one such alliance in Kazakhstan, enabling the world’s biggest private oil trader to market huge volumes of Kazakh crude through Ingma Holding BV. From 2009 to 2016, this unknown company paid out at least US$1 billion in dividends to its shareholders, distributed between Vitol and its partners: firstly, to Arvind Tiku alone through Oilex, then as from 2010 onwards to Dias Suleimenov and probably Daniyar Abulgazin, through Omega. Our investigation also shows that even though his name does not appear on paper, the President’s son-in-law Timur Kulibayev indirectly benefited from this partnership.

Has the risk really been covered?

Vitol recognises that it had a direct or indirect business relationship with the PEPs Arvind Tiku, Dias Suleimenov, Timur Kulibayev and Daniyar Abulgazin. The company does not believe that this breaches its code of conduct:

It is appropriate and often necessary for companies to enter into business activities with PEPs. Enhanced due diligence checks are performed on any transaction involving a PEP.

Vitol vehemently denies that Timur Kulibayev is or ever has been the direct or indirect beneficiary of Ingma. The company claims that it cannot comment on the financial links between Arvind Tiku and the President’s son-in-law because it does not hold shares in either Oilex or the trust. Is this response satisfactory? In light of the context in Kazakhstan, where the ruling clan amasses huge wealth off the back of the oil industry, our answer is no. Careful due diligence would have uncovered the close relationship between Tiku and Kulibayev, in 2010 at the latest when the press began to report on the Swiss investigation into the two.

A misleading argument

According to Vitol, the banks involved in Ingma’s commercial activities did not detect the presence of Kulibayev in the shadows of Arvind Tiku. Precisely this situation reveals the weakness of one of the main arguments put forward by the industry’s lobby and the Swiss federal authorities in opposition to any semblance of regulation; namely, that commodity trading is indirectly regulated by the banks that fund their activities.

In 2011 the Wolfsberg Group, which brings together 13 of the biggest international banks in an effort to prevent money laundering, stressed the limits of their supervisory powers, stating

…it is extremely rare for any one Bank to have the opportunity to review an overall trade financing process in complete detail given the premise of the trade business that banks deal only in documents.

Moreover, the traders themselves provide these documents.