ANTI CORRUPTION

Revealed: Top Tory Helps Dictator Create Tax-Haven for Dirty Russian Money

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Francis Maude MP is advising Kazakhstan on how to create a financial “free zone”, which is likely to handle big money from Russian oligarchs.

Francis Maude, a for­mer Tory Trade Minister (until 2016) and a key mem­ber of the last Conservative gov­ern­ment, is work­ing for the auto­crat­ic President of Kazakhstan, help­ing him launch a finan­cial “cen­tre” that crit­ics view as a new tax haven, VICE can reveal.

Francis Maude is work­ing as an advis­er to the Kazakh government’s “Astana International Financial Centre” (AIFC). This will be a finan­cial “Free Zone”, in Astana, the cap­i­tal of the for­mer Soviet Republic. The Kazakh gov­ern­ment hopes the AIFC will com­pete with oth­er “International Financial Centres” like the off­shore tax havens in the Channel Islands or Cayman Islands.

Maude’s new job with the AIFC was revealed in a let­ter released by the Advisory Committee for Business Appointments (ACoBA), which mon­i­tors the revolv­ing door between gov­ern­ment and busi­ness. The let­ter was released this May, although Maude applied for the post last November. Maude is sit­ting on the “Advisory Council” of the AIFC.

The AIFC is a per­son­al ini­tia­tive of Kazakh pres­i­dent Nursultan Nazarbayev, part of what he calls his “100 Concrete Steps” to build the Kazakh econ­o­my.

Nazarbayev, wide­ly viewed as an auto­crat, has been pres­i­dent of Kazakhstan since 1990. According to US gov­ern­ment reports, human rights abus­es under his despot­ic rule in Kazakhstan include “arbi­trary or unlaw­ful killings”, “detainee and pris­on­er tor­ture and oth­er abuse”, “arbi­trary arrest and deten­tion; infringe­ments on cit­i­zens’ pri­va­cy rights; pro­hib­i­tive polit­i­cal par­ty reg­is­tra­tion require­ments; [and] restric­tions on the activ­i­ties of non­govern­men­tal organ­i­sa­tion”.

The Astana International Financial Centre (AIFC) is meant to act as a con­duit for invest­ment mon­ey through Kazakhstan, by hav­ing typ­i­cal tax haven laws. The “tax regime” for firms and rich indi­vid­u­als oper­at­ing inside the AIFC include a com­plete exemp­tion from any cor­po­ra­tion tax or income tax until 2066. Critics say this means the AIFC will encour­age tax eva­sion.

Kazakhstan is also famous­ly cor­rupt. According to the lat­est US State Department report, “cor­rup­tion remained wide­spread” in Kazahkstan and gov­ern­ment “offi­cials fre­quent­ly engaged in cor­rupt prac­tices with impuni­ty”.

Commenting on Maude’s new job, George Turner of cam­paign group the Tax Justice Network, said, “Companies and indi­vid­u­als oper­at­ing in the Astana International Finance Centre will be exempt from income tax and cor­po­ra­tion tax for 50 years. This is a tax haven with­in a coun­try, which will no doubt pro­mote all of the bad behav­iour that takes place in tax havens.”

He added that “politi­cians fre­quent­ly claim to want to take on tax avoid­ance and eva­sion, but when the finance indus­try dan­gles in front of them the prospect of high­ly paid sinecures on leav­ing office, you have to won­der how hard they are going to push”. In 2012, a spokesman for Francis Maude insist­ed that the Conservatives “take tax eva­sion and aggres­sive tax avoid­ance very seri­ous­ly” after Maude sug­gest­ed that describ­ing a coun­try as a tax haven was a “com­pli­ment”.

It is very like­ly that the new AIFC will han­dle big mon­ey from Russia’s oli­garchs. Last December, Russian President Putin said, “Kazakhstan has been and remains our key part­ner in the sphere of the econ­o­my.”

Naomi Hirst, a senior cam­paign­er at lead­ing anti-cor­rup­tion group Global Witness, told VICE: “After the nerve agent attack in Salisbury, Theresa May announced a crack-down on dirty mon­ey to make the UK a safer place. Now a for­mer Conservative min­is­ter has been giv­en the go-ahead to help cre­ate a new off­shore finan­cial cen­tre in a coun­try already marred by cor­rup­tion and human rights abus­es.”

She added that, “This hypocrisy isn’t just absurd, it’s dan­ger­ous – if Lord Maude cares about glob­al secu­ri­ty he should recon­sid­er his posi­tion.”

The Advisory Committee on Business Appointments (ACoBA) – which decides whether jobs tak­en by politi­cians could involve con­flicts of inter­ests – approved Maude’s new job, but they not­ed he had many meet­ings with Kazakh’s ruler, President Nazarbayev, and with Kazakh and AIFC offi­cials while he was still a min­is­ter.

Lord Maude told the Committee that, when Trade Minister, he “met with Governor Kelimbetov, who is gov­er­nor of the AIFC”, over “lunch” in Kazakhstan in 2015.

The Department for International Trade gave fur­ther detail to ACoBO. These includ­ed Maude meet­ing “the Kazakh PM and Senior Ministers, includ­ing the cur­rent Governor of AIFC” on the 2015 vis­it to Kazakhstan. In addi­tion, Maude “host­ed” an “Intergovernmental Commission” for President Nazarbayev him­self in 2015. The Department also showed that Maude “offered the Kazakh gov­ern­ment” his “expe­ri­ence and exper­tise in a major pri­vati­sa­tion pro­gramme”.

The Committee told Maude there was a “clear link between this appoint­ment and your respon­si­bil­i­ties in Ministerial Office”, but “con­sid­ered that the gap between leav­ing office and tak­ing up this role (over 18 months) is suf­fi­cient to mit­i­gate any con­cerns about the pro­pri­ety of this appoint­ment”.

Revealingly, the com­mit­tee said that because the British gov­ern­ment is already “sup­port­ive of the AIFC and sees it as a means by which the UK finan­cial ser­vices sec­tor can win new busi­ness”, this meant there was “noth­ing to sug­gest” that “deci­sions you made in office were influ­enced by the hope or expec­ta­tion of future employ­ment”. In oth­er words, the UK gov­ern­ment sup­ports the cre­ation of a tax haven by a dic­ta­tor, so there is no con­flict of inter­est if British min­is­ters want to cash in. Kaching!

Maude is a very senior Tory – he was a min­is­ter under Margaret Thatcher in 1989, and is a for­mer Chairman of the Conservative Party. He was a key fig­ure in David Cameron’s gov­ern­ment, in charge of Cameron’s “effi­cien­cy” and pri­vati­sa­tion pro­gramme in the Cabinet Office before he became a Trade Minister. Maude was giv­en a seat in the House of Lords in 2015. Since leav­ing gov­ern­ment in March of 2016, Maude has tak­en on around ten jobs in bank­ing, pub­lic rela­tions and com­mer­cial intel­li­gence.

VICE asked Maude about the new job, and the prob­lems of tax havens and “dirty mon­ey”, but he did not give any response.

@SolHughesWriter

Revealed: Top Tory Helps Dictator Create Tax-Haven for Dirty Russian Money

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