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Kazakhstan Country Profile

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General Information

Political Climate

Having held the top office since 1989, President Nursultan Nazarbayev has continued to build a strong and personalised presidential system by extending his patronage over the country's key political institutions, media, judiciary, administration, and business. The privatisation process saw much of the country's wealth monopolised in the hands of an inner circle of the President's family, friends and business partners. Today, this inner circle controls vital economic resources and access to political office. In these networks of patronage relationships, President Nazarbayev has created a centralist and authoritarian state with little leverage for the development and activity of civil society. Kazakhstan has experienced an annual economic growth rate of around 10% in recent years because of its large oil deposits, and the political elite has been successful in virtually monopolising the benefits of this boom. Since late 2008, an economic slowdown and a growing financial crisis have emphasised the enormous and widening gap in accumulated wealth between the ruling elites and the general population, according to Freedom House 2009. State reform has been hampered by substantial elite corruption and also by difficult centre relations, as reported by Bertelsmann Foundation 2010. In the April 2011 presidential elections, President Nazarbayev was re-elected for a third term with 95% of the votes. The OSCE monitors criticised the election, pointing to a lack of transparency and competition in the vote, according to a 2011 article by The Associated Press.

Kazakhstan's governmental system lacks the basic features of democracy, elections are neither free nor fair, and there are few independent media outlets, as illustrated by Freedom House 2009. Two prominent opposition figures, Zamanbek Nurkadilov and Altynbek Sarsenbayev, were murdered in 2005 and 2006 respectively. Both were former government 'insiders' who accused President Nazarbayev's family of corruption. Constitutional amendments passed in 2007 allowed Nazarbayev to remain in office for an unlimited number of terms. Parliament (the Majilis) exerts almost no influence on policy-making or implementation. Parliamentary elections are conducted on a regular basis (the latest in August 2007), but OSCE monitors report that they do not meet international standards. The President's power to appoint and remove the Prime Minister, Parliament and members of other government offices, means that he is not constrained by checks and balances in any form. However, the President's relatives have seen their political roles weakened in relation to the January 2008 sentencing of the President's former son-in-law, Rakhat Aliyev, to 20 years in prison and confiscation of property on charges of running an organised criminal network of businesspeople, theft and kidnapping. Today, the President relies heavily on long-standing loyalists and his ability to dismiss Parliament, which provides him with a buffer from political accountability against corruption related charges and failed policies. Despite this, recent years have witnessed a weakening of the ties between Nazarbayev and his loyalists, as well as an increase in political willingness to punish high-level officials implicated in corruption, as indicated by the US Department of State 2010. However, the President's anti-corruption surge has also been viewed as politically motivated and targeted at the opposition and critics. 

There are massive possibilities for corruption on a grand scale in Kazakhstan's environment of intra-elite allocation of benefits connected to oil production, as illustrated by Transparency International's Global Corruption Report 2004. Corruption in Kazakhstan is systemic, even within the country's anti-corruption agency, and no public office is free from executive interference, according to Freedom House 2009 and Global Integrity 2007. Long delays, unwieldy bureaucracy, weak business law, short deadlines, employee discontent and the absence of explanatory information all breed corruption. Although the Kazakhstani law provides criminal penalties for official corruption, this law is not implemented effectively, and officials frequently engage in corrupt practices with impunity, according to the US Department of State 2010. According to the US Department of State 2011, corruption is highest in the judiciary, police, customs, the sphere of property rights, land registration, and within construction projects. The volume of corruption at the administrative level accounts, reportedly, for 7% of Kazakhstan's budget. Nevertheless, as emphasised by the Bertelsmann Foundation 2010, despite rampant corruption, Nazarbayev's administration seems to have made some progress in terms of anti-corruption efforts. Thus, according to the US Department of State 2010, the government has intensified its campaign to address corruption, and several high-ranking government officials have been investigated for embezzlement and abuse of office. For instance, in 2009, former Environment Minister Nurlan Iskakov was sentenced to four years of imprisonment charged with financial manipulation and embezzling, former aide to the President Serik Burkitbayev was sentenced to six years in prison for committing economic crimes, Deputy Defence Minister Kazhimurat Mayermanov was sentenced to 11 years in prison for abuse of power in defence procurement, while the head of the state uranium company, Mukhtar Dzhakishev, was sentenced to 14 years of hard labour on charges of abuse of office. Given a political environment rife with corruption, business executives surveyed in the World Economic Forum Global Competitiveness Report 2010-2011 reveal that the level of public trust in politicians is low.

Business and Corruption

According to the World Economic Forum Global Competitiveness Report 2010-2011, Kazakhstan is one of the most competitive economies in Central Asia. President Nazarbayev has repeatedly stressed economic reforms over political reforms, and in this climate, trade liberalisation and privatisation of former state assets have progressed relatively far. In principle, foreign trade and ownership have been liberalised, but there are some exceptions in industries of strategic importance, such as media, telecommunications and oil. Moreover, foreign investors have reported feeling increasingly threatened over the past year as the President made public his complaints that previous privatisations were executed too quickly and by-passed domestic companies.

Business surveys generally indicate that corruption in Kazakhstan is a major obstacle for conducting business in the country. For instance, in the World Economic Forum Global Competitiveness Report 2010-2011, companies rank corruption as the greatest constraint on business operations in Kazakhstan, and companies still consider the occurrence of irregular payments and bribes in the country as fairly common. Similarly, two-thirds of the companies surveyed in the EBRD & World Bank BEEPS Kazakhstan 2008 state that corruption constitutes a problem for conducting business in Kazakhstan - an increase from a quarter in 2005. In addition, the World Bank & IFC Enterprise Surveys 2009 report that more than 23% of companies expect to make informal payments 'to get things done' in Kazakhstan. In 2006 alone, SMEs in the country spent between USD 1.3 billion and USD 2 billion on corruption. Victims of corruption in Kazakhstan have very little means for effective recourse, as state and local elite interests are given de facto precedence in courts. Foreign investors can complain to the Ombudsman, but this office has limited power. The US Department of State 2011 reports that, in some cases during the previous few years, Kazakhstan has legislated to the benefit of domestic companies and has challenged contractual rights, raising questions concerning the government's respect of contract sanctity. Global Integrity 2007 reports that 72% of companies resorted to corruption to settle their conflicts. Tax evasion is common and the informal economy in Kazakhstan is substantial. Freedom House 2007 reports that the most widespread form of corruption in Kazakhstan is administrative, including routine extortions and shadow control of companies by officials, which is believed to have fuelled inflation. The President has denounced corruption in the government administration and has instructed lower level officials not to obstruct the operations of SMEs, but little in this regard has translated into practice. Based on the above, companies are recommended to develop, implement and strengthen integrity systems and to conduct extensive due diligence when planning to do or are already doing business in Kazakhstan. 

In some economic sectors deemed of 'strategic importance', such as oil and gas, and electricity and railroads, state companies still play an important role, making frequent purchases of initial public offerings and receiving preferential treatment from anti-monopoly authorities. State-owned companies are rife with corruption and their finances are subject to much less scrutiny than those of foreign investors, according to the US Department of State 2011 and Global Integrity 2010. Nevertheless, the conditions for developing transparent relations between companies and the government are slowly improving. Public officials are trained in anti-corruption, and a code of ethics exists for public officials. On another positive note, competitive examinations are being held for lower and middle-ranking officials that are more frequently in contact with companies. Furthermore, in the early 2009, an anti-corruption policy was adopted by the Kazakhstani government, which includes salary increases of 15% for public servants, according to the Bertelsmann Foundation 2010. However, positions in the higher levels of government are still not awarded on merit-based criteria. As emphasised by Global Integrity 2010, companies continue to report that bribes are frequently required in relations with state officials. However, foreign direct investment flows have remained strong over the recent years, highlighting the fact that Kazakhstan is still an attractive destination for investment country, despite the risk of corruption.

Regulatory Environment

Despite Kazakhstan's competitive edge over other countries in the region, the regulatory burden on companies operating in Kazakhstan is considerable. The business licensing, customs and tax authorities reportedly pose the greatest problems for companies. Starting a company entails 6 procedures and takes an average of 19 days, according to the World Bank & IFC Doing Business 2011. The same source reports that obtaining the licences and permits required by law can take 219 days and cost approximately 120% of the income per capita. Kazakhstan continues to perform poorly in relation to customs, despite efforts to increase transparency and simplify procedures. The average costs of importing and exporting are twice as high as the other countries in the region, making Kazakhstan one of the worst performing countries in the world in relation to customs. Kazakhstan has been in the process of reforming and simplifying the administrative procedural burden of tax compliance. According to the World Bank & IFC Doing Business 2011, Kazakhstan performs well in relation to the ease of paying taxes compared to other countries in the region. However, the time required to comply with tax regulations still poses a significant burden for companies.

In the World Economic Forum Global Competitiveness Report 2010-2011, business executives surveyed perceive government administrative requirements to be quite burdensome. Moreover, business executives also report that government policy-making is fairly opaque and that government officials usually favour well-connected companies and individuals when deciding on policies and contracts. Commercial regulations can be ambiguous and inconsistent, and the lack of transparency increases start-up and overall operational costs. According to the World Bank & IFC Enterprise Surveys 2009, senior management can expect to spend 4.7% of its time dealing with the requirements of government regulation. In addition, the US Department of State 2011 reports that government officials sometimes interfere in business decisions, or use governmental powers to exert pressure on companies for personal or political reasons.

Kazakhstan passed a new Investment Law in 2003 that superseded and consolidated past legislation governing foreign investment. The law provides for dispute settlement through negotiation, Kazakhstan's judicial process, and international arbitration. However, according to companies and investors, the law has not improved on previous laws. There are concerns regarding the law's narrow definition of investment disputes that ignores disputes between private entities, a lack of contract and property rights protection, and a lack of clear provisions for access to international arbitration dispute resolution. Kazakhstan is party to several conventions and treaties on international commercial arbitration and its arbitration law gives precedence to international arbitration agreements. Hence, the US Department of State 2011 indicates that all awards rendered by a foreign or international arbitral tribunal (e.g. the International Centre for the Settlement of Investment Disputes, etc.) should be recognised and enforced in Kazakhstan. The Committee on Investments of the Ministry of Industry and Trade should be consulted before entering into any contract with government bodies as the agencies authorised to act on the government's behalf may change. It is important for foreign companies to do so - for a dispute to be considered an investment dispute, and hence qualify for international arbitration, the contracting state entity itself must have been authorised to act or contract.

A new Land Code came into effect in 2003, allowing Kazakhstani citizens for the first time to privately own agricultural, industrial, commercial and residential land. However, foreign individuals and companies may still only lease agricultural land for up to 10 years, although the wording of the law is unclear regarding the purchase of agricultural land by locally registered entities that can be wholly foreign-owned or joint ventures. Reportedly, Kazakhstani authorities often require that a foreign company agrees in its ownership contract with the government to contribute to social programmes for local communities. Critics have complained that the state will violate property rights to pursue a political agenda and that the Land Code primarily benefits wealthy Kazakhstanis with close ties to public officials, according to Freedom House 2011.

Corruption Levels

Sectors (Judicial System, Police, etc.) describe which kind of corruption can be encountered in different areas. This section covers various forms of corruption, including bribes and facilitation payments. All information is based on publicly available information and should be viewed as general guidelines on the types of corruption existing in the country.

Levels of corruption in the different sectors indicate where corruption can be encountered. The levels are defined as follows:

  • Individual Corruption: Corruption that takes place primarily in relations between individual citizens and public officials and authorities.
  • Business Corruption: Corruption that takes place primarily in relations between enterprises/companies and public officials and authorities.
  • Political Corruption: Corruption that takes place in the higher echelons of public administration and on a political level.

Frequency refers to quantitative surveys on corruption in the respective sectors.

Judicial System

Individual Corruption

Corruption is entrenched within the Kazakhstani judicial system. For instance, according to a public opinion survey by the Association of Sociologists and Political Scientists cited in the Freedom House 2009, receiving bribes was most rampant among judges, with an average bribe costing over USD 2,000, the highest figure when compared with bribes in other public institutions. In a similar vein, Freedom House 2011 reports that corruption is evident throughout the entire judicial system. Thus, Kazakhstani citizens generally hold no expectations that justice will be dispensed impartially in either civil or criminal proceedings.

Prosecutors issue arrest, search and detention warrants rather than judges. Influential individuals can persuade prosecutors to issue warrants in order to harass and intimidate private, media, economic or political rivals, according to another Freedom House 2011 source.

Business Corruption

Bribes in exchange for favourable rulings are solicited in the majority of criminal cases, according to the US Department of State 2010. Few companies believe that the courts will base their rulings on objective criteria in all instances. Furthermore, according to the report, observers consider civil courts corrupt and unreliable. Observers note that litigants experience difficulty in enforcing judgments, particularly if they do not agree to pay a percentage to the court administrator. Moreover, according to the US Department of State 2011, ample opportunity can exist for interference in judicial cases given a relative lack of judicial independence.

This perception is supported by the World Bank & IFC Enterprise Surveys 2009, according to which, less than half of the surveyed companies believe that the court system is fair, impartial and uncorrupted. Also companies surveyed in the World Economic Forum Global Competitiveness Report 2010-2011 indicate that courts are subject to political influences of members of government, citizens and companies. According to the EBRD & World Bank BEEPS Kazakhstan 2008, it is not uncommon for companies operating in Kazakhstan to pay bribes in their dealings with the courts, and under a half of the companies identify the functioning of the courts as a major business constraint.

Political Corruption

According to the US Department of State 2010, corruption within the Kazakhstani judiciary is evident at every stage of the judicial process. According to the report, judges, prosecutors, and other officials solicit bribes in exchange for favourable rulings in the majority of criminal cases, despite the fact that judges are among the most highly paid government officials. 

While the constitution states that the judiciary is independent, practical implementation of that independence is not guaranteed, according to the Bertelsmann Foundation 2010. Instead, the judiciary remains loyal to the executive branch, headed by the President, as reported by Freedom House 2011, which also notes that judges are generally subject to political bias. A constitutional amendment in 2007 and the respective legislation in 2008 have reinforced presidential control over appointments of judges. Thus, according to Global Integrity 2010, national-level judges are sometimes selected based on their connections with government officials, rather than objective professional qualifications. Furthermore, according to another Freedom House 2011 source, bribery is seen in Kazakhstan as an effective means of achieving the desired verdict for small and medium offences. In addition, there is a widespread belief that it is extremely difficult to become a judge without giving bribes to relevant officials and court administrators.

The Prosecutor General's Office reportedly intervenes in cases where the state may not have a real interest, but rather where the opportunity exists to solicit bribes. Judicial decisions are often subjects of political pressures. In February 2006, the court closed the newspaper Zhuma Times, which published articles on the 'Kazakhgate' scandal (see 'Environment, Natural Resources and Extractive Industry' sector), for insulting the President's dignity and honour.

According to the US Department of State 2010, 24 judges had been dismissed for incompetence and two judges were convicted for corruption during 2010. 

Frequency

The World Bank & IFC: Doing Business 2011:
- Enforcing a commercial contract requires a company to go through 38 procedures, taking an average of 390 days at an average cost of approximately 22% of the claim.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the independence of the judiciary from influences of members of government, citizens, or companies a score of 2.9 on a 7-point scale (1 'heavily influenced' and 7 'entirely independent').

- Business executives give the efficiency of the legal framework for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 3.4 and 3.3. respectively on a 7-point scale (1 'extremely inefficient' and 7 'highly efficient').

The World Bank & IFC: Enterprise Surveys 2009:
- 36.3% of companies surveyed believe that the court system is fair, impartial and uncorrupted.

- Nearly 22% of companies surveyed identify the functioning of the courts as major business constraint.

EBRD & World Bank: BEEPS Kazakhstan 2008:
- 9% of companies surveyed state that bribery is frequent in dealing with courts.

- 43% of the companies surveyed report that the functioning of the judiciary poses a problem for doing business - a substantial increase from 21% in 2005.

Police

Individual Corruption

Corruption within the police force remains a serious problem in Kazakhstan, and public considers the police to be among the most corrupt public institutions in the country, according to the US Department of State 2011 and the US Department of State 2010.

Kazakhstan's traffic police are particularly notorious for bribe-taking. According to the Bertelsmann Foundation 2010, in the early 2009, an anti-corruption policy was adopted by the Kazakhstani government, which includes an almost 300% boost in salaries for traffic police. Nonetheless, according to a poll released by the Crime Statistics Committee under the General Prosecutor's Office, a substantial part of the population did not believe that the government can protect them from infringements of their civil rights, especially infringements by the police, as cited in the US Department of State 2009. According to the US Department of State 2010, citizens filed more than 13,000 complaints about police corruption and abuse of office in 2010.

Business Corruption

In the World Economic Forum Global Competitiveness Report 2010-2011 companies report that the Kazakhstani police cannot be consistently relied upon to enforce law and order in the country. This is corroborated by the World Bank & IFC Enterprise Surveys 2009, which reveals that well over half of the surveyed companies pay for security in Kazakhstan, while a smaller part identifies crime, theft and disorder as major constraints to doing business in the country.

Foreign companies operating in Kazakhstan frequently report harassment by the Financial Police in the form of unannounced inspections and other methods, according to the US Department of State 2011. Law enforcement agencies have occasionally intimidated foreign investors perceived to be uncooperative with the government.

Political Corruption

According to Global Integrity 2010, Kazakhstani law enforcement agencies are not protected from political interference. Likewise, appointments to the police are often based on non-professional criteria, and party loyalties or personal relationships are often considered. Moreover, law enforcement officials, most often high-level figures, enjoy some protection from criminal investigations in practice. 

In 2009, the former Deputy Defence Minister, Kazhimurat Mayermanov, faced trial over the acquisition of military hardware that was found to be defective, as reported in a July 2009 article by Eurasianet. According to the source, Mayermanov was charged with abuse of office in relation to defence contracts with two Israeli companies, Israeli Military Industries and Soltam Systems, to purchase artillery systems that were later found to be experimental rather than working models, resulting in a USD 82 million loss to the state. In February 2010, Mayermanov was sentenced to 11 years in prison on charges of corruption and abuse of office, according to the US Department of State 2010.

According to the same report, authorities dismissed 61 law enforcement officers on charges of corruption during 2010.

Frequency

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the reliability of the Kazakhstani police services to enforce law and order a score of 3.3 on a 7-point scale (1 'cannot be relied upon at all' and 7 'can always be relied upon').

The World Bank & IFC: Enterprise Surveys 2009:
- Nearly 58% of companies surveyed pay for security in Kazakhstan.

- Over 41% of companies surveyed identify crime, theft and disorder as a major constraint on doing business.

Global Integrity: Kazakhstan Country Report 2007:
- 55% of road police admitted they take part in corruption.

Licences, Infrastructure and Public Utilities

Individual Corruption

Citizens report that they have to pay bribes for hospital services. This is supported by Secretary of State-Minister of Foreign Affairs, Kanat Saudabayev, according to whom, corruption in the healthcare sector in Kazakhstan is a serious problem, as reported in a November 2009 article by Inform Kz.

Business Corruption

According to the World Bank & IFC Enterprise Surveys 2009, the companies surveyed report that facilitation payments in the form of gifts are sometimes necessary when dealing with licence issuing authorities in Kazakhstan. Companies also perceive corruption in relation to getting public utilities connected as widespread.  Also, in the EBRD & World Bank BEEPS Kazakhstan 2008, nearly half of the surveyed companies operating in Kazakhstan identify business licensing and permits as a constraint on their business operations.

Foreign investors operating in Kazakhstan have reported inconsistent regulatory standards and corruption related to licences and permits. Amendments in 2005 to the Licensing Law have resulted in the exclusion of some business activities from licensing requirements. Furthermore, although the 2007 law simplified procedural requirements for issuing licences, licensing continues to be problematic, especially for SMEs, as emphasised by the US Department of State 2011. According to the report, regional authorities can create additional bureaucratic impediments, especially in the licensing and issuance of permits. Companies can consult the special page on the Financial Police website for a list of remedies available to them in case of violation of their licensing rights by public officials.

Business inspections conducted by Kazakhstani government officials are considered as an area for corrupt practices. Global Integrity 2010 reports that business inspections by government officials to ensure public health and safety standards are often carried out in an arbitrary and ad-hoc manner in practice, and bribes are paid by companies in return for favourable treatment or expedited processing.

Political Corruption

In April 2008, a former government minister and the head of the state railway company, Kazakhstan Temir Zholy, Zhaksybek Kulekeyev, was charged with accepting a USD 100,000 bribe from a company seeking to win a tender, according to the official website of Transparency Kazakhstan.

In 2009, the heads of the Astana and Almaty construction companies were arrested on charges of embezzlement and sentenced to 9 to 13 years in prison with their property confiscated, according to a December 2009 article by Kazakhstanskaya Pravda.

Also, in 2009, the former aide to the president, Serik Burkitbayev, was sentenced to six years in prison for committing economic crimes, according to the US Department of State 2010. The charges included abuse of power, misappropriation of property, and embezzlement. However, as indicated in a November 2010 article by Guardian, Burkitbayev's arrest and conviction were allegedly politically motivated; namely, Burkitbayev was at one point a close associate of Rakhat Aliyev, Nazarbayev's exiled former son-in-law, and his conviction could have been the result of his links to Aliyev rather than his corrupt actions.

In August 2011, the former health minister was sentenced to seven years in prison for corruption, according to a 2011 article by Radio Free Europe/Radio Liberty. According to the source, the former minister was found guilty of obtaining nine apartments as a bribe from a construction company while he was the rector of the Astana Medical Institute between 2004 and 2008.

Frequency

The World Bank & IFC: Doing Business 2011:
- The number of procedures to obtain the licences and permits related to opening a warehouse is 34, more than the regional average, while the average time to obtain them is 219 days - much less than the regional average.

- The associated cost of dealing with these licences is approximately 120% of income per capita and several times less the regional average.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give government administrative requirements (permits, regulations, reporting) in Kazakhstan a score of 3.2 on a 7-point scale (1 'extremely burdensome' and 7 'not burdensome at all').

The World Bank & IFC: Enterprise Surveys 2009:
- Over 23% of companies expect to make informal payments to public officials to get things done.

- Over 30% of companies expect to give gifts to get an operating licence.

- 36.7% of companies expect to give gifts to get a construction permit.

- 25% of companies expect to give gifts to get an electrical connection, 25.5% for a water connection and 7% for a telephone connection.

- Over 25% of companies identify business licensing and permits as a major constraint on doing business.

EBRD & World Bank: BEEPS Kazakhstan 2008:
- 47% of the companies surveyed identify business licensing and permits as a problem for doing business in Kazakhstan - an increase from 29% in 2005.

Land Administration

Individual Corruption

A government decree on the 'legalisation of property' has spurred conflict between ordinary citizens and local authorities regarding its implementation. This decree should enable citizens to legalise private houses and cottages built in the past years, when no proper legal framework for owning property existed. According to Freedom House 2008 however, in reality the law is implemented unevenly, allowing elites to legalise their houses without authorisation, while the poorer segments of society have faced different barriers to the legalisation of their property.

Moreover, according to Freedom House 2011, Astana residents whose homes have been demolished to make way for large construction projects have reported that they were denied legally guaranteed compensation.

According to Andrei Lukin, the deputy chairman of the Agency for Fighting Economic Crime and Corruption, investigations made by the agency have shown that obtaining title for a plot of land in the Pavlodar, Akmola or South Kazakhstan regions would cost KZT 100,000 to 500,000 in bribes.

Business Corruption

According to the Bertelsmann Foundation 2010, although property rights in Kazakhstan are well-defined, recent years saw a gradual nationalisation of property. Such nationalisation often follows disputes with foreign companies over the terms of their involvement in the Kazakhstani economy, according to the report. In the World Economic Forum Global Competitiveness Report 2010-2011, business executives identify the protection of property rights in Kazakhstan as inadequate and therefore, constituting  a competitive disadvantage for the country.

Political Corruption

The 2003 Land Code (in Kazakh) introduced private ownership of agricultural land and regulated property rights. Land privatisation in Kazakhstan has a large potential for corruption, as the auctioning or leasing of land has traditionally been subject to very little public oversight and has favoured local elites. The state is reportedly willing to violate property rights to pursue its political agenda. Moreover, according to Freedom House 2011, critics have argued that the Land Code primarily benefits wealthy individuals with close government ties. 

According to the same source, while the rights of entrepreneurship and private property are formally protected, equality of opportunity is limited by bureaucratic hurdles and the control of large segments of the economy by clannish elites and government officials.

Frequency

The World Bank & IFC: Doing Business 2011:
- It takes an average of 4 procedures (less than the regional average) and 40 days at a cost of 0.1% of the property value to register property and secure property rights.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the protection of property rights in Kazakhstan, including financial assets, a score of 3.5 on a 7-point scale (1 'very weak' and 7 'very strong').

Tax Administration

Individual Corruption

Citizens perceive the tax authorities to be prone to corruption. Moreover, it is important to emphasise that the application of tax laws has been uneven, and in some cases blatantly unfair, according to the US Department of State 2011.

Business Corruption

According to Global Integrity 2010, tax laws are not always enforced uniformly and without discrimination in Kazakhstan, and some well-connected groups may consistently avoid paying taxes.

According to the US Department of State 2011, foreign companies report that they are subject to greater scrutiny by government regulatory bodies than local companies, especially in relation to harassment by the Financial Police. One such technique of harassment is unannounced inspections. Tax authorities are one of the agencies that most frequently carry out inspections and, generally, the more direct contact companies have with authorities, the greater the possibility for corruption. In the World Bank and IFC Enterprise Surveys 2009, a quarter of the surveyed companies expect to give gifts in meetings with tax officials. Investors perceive the higher level of tax regulatory pressure placed upon them in comparison to local companies as an effort to extort bribes. Bribery has also helped fuel the development of exceptional tax regimes and contracts with special taxation awarded by the government to large foreign investors, which run contrary to official tax regulations and are not made public. In the EBRD & World Bank BEEPS Kazakhstan 2008, under half of the surveyed companies identify tax administration as representing an impediment to their business operations in the country.

Frequency

The World Bank & IFC: Doing Business 2011:
- A medium-sized company must make 9 tax payments a year that take 271 hours to complete at a total tax rate of approximately 30% of profits.

World Bank & IFC: Enterprise Surveys 2009:
- 25% of the surveyed companies expect to give gifts in meetings with tax officials.

- Over 23% of companies identify tax administration as a major constraint on doing business.

EBRD & World Bank: BEEPS Kazakhstan 2008:
- 13% of the companies surveyed report that bribery in connection with taxes and tax collection is frequent.

- 51% of the companies surveyed reported that tax administration represents an obstacle to doing business in Kazakhstan.

- On average, the surveyed companies were inspected by tax authorities roughly around 5.6 times a year.

Customs Administration

Individual Corruption

Customs administration is riddled with corruption, including major entry points, according to Global Integrity 2007. This perception is supported in an interview conducted with the Kazakh Minister of Finances, Bolat Zhamishev, cited in a December 2009 article by Kazakhstanskaya Pravda. According to the article, corruption within customs is rampant and the practice of smuggling goods and paying bribes to customs officials to turn a blind eye is common at the Kazakh-Kyrgyz border.

Business Corruption

According to Global Integrity 2008, the customs agency received the largest volume of bribes compared to other institutions in 2008, amounting to USD 145 million. Granting of customs exemptions on foreign investment is a problem, since the decisions are made on a case-by-case basis. Moreover, according to Global Integrity 2010, customs and excise laws are not always enforced uniformly or without discrimination, and some groups are more likely to evade customs and excise laws due to their connections. In general, companies face problems with the customs administration and consider it corrupt. This situation is also reflected in the EBRD & World Bank BEEPS Kazakhstan 2008, which reveals that bribery in relation to customs services is not common in Kazakhstan and that more than a third of the surveyed companies identify customs and trade regulations as a constraint to business operations in the country. Also in the World Economic Forum Global Enabling Trade Report 2010, business executives report that exporting and importing requires considerable time and paperwork to clear goods at the border, and that the process is plagued by corruption and bribery.

Political Corruption

In Kazakhstan, a private contractor determines customs value based on a database of world prices, resulting in valuation uplifts on approximately 20% of all goods entering the country, according to the Ministry of Commerce of China 2007. The government pays for the inspections of trade goods, but the declaring party must pay penalties in the event of discrepancies. There are concerns that this process is used to generate illegal revenues beyond existing taxes and duties. Courts have settled 85% of all appeals under this system against the customs agency.

According to the US Department of State 2010, in an attempt to curb corruption within the customs service, the government filed 81 criminal cases against corrupt customs officials and uncovered 66 corruption offences during 2010.

Frequency

The World Bank & IFC: Doing Business 2011:
- The administrative, time and cost burdens related to customs are all approximately twice the regional average.

- A standard export shipment of goods requires 11 documents and 81 days at an average cost of USD 3,005 per container.

- A standard import shipment of goods requires 12 documents and 67 days at an average cost of USD 3,055 per container.

World Economic Forum: The Global Enabling Trade Report 2010:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in Kazakhstan a score of 3.3 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

- Business executives give the transparency of border administration (pervasiveness of undocumented extra payments or bribes connected with imports and exports) a score of 3.4 on a 7-point scale (1 'extremely inefficient' and 7 'extremely efficient').

The World Bank & IFC: Enterprise Surveys 2009:
- More than 19% of the trade companies surveyed identify Kazakhstani customs and trade regulations as a major constraint on doing business.

- Over 36.5% of companies surveyed expect to give gifts to get an import licence.

EBRD & World Bank: BEEPS Kazakhstan 2008:
- 13% of the companies surveyed report that bribery in connection with customs is frequent.

- 36% of the companies surveyed reported that customs administration represents an obstacle to doing business in Kazakhstan.

Global Integrity: Kazakhstan Country Report 2007:
- 46% of customs officials questioned admitted they take part in corruption.

Public Procurement and Contracting

Business Corruption

Business executives in the World Economic Forum Global Competitiveness Report 2010-2011 report that government officials often favour well-connected companies and individuals when awarding contracts. In general, the law on procurement is not very effective. For example, according to Global Integrity 2010, companies guilty of major violations of procurement regulations (i.e. bribery) are not blacklisted and can continue to participate in future procurement bids.

According to the US Department of State 2011, despite growing investment in Kazakhstan's energy sector, concerns remain about the government's tendency to challenge contractual rights, legislate preferences for domestic companies, and create mechanisms for government intervention in foreign companies' operations, particularly in procurement decisions. Furthermore, according to the report, the Kazakhstani government enacted procurement regulations to give preference to local suppliers. These rules give Kazakhstani bidders a substantial reduction in bid price. 

According to Revenue Watch Institute 2010, there was a lack of transparency in contract disputes with the international oil companies operating in Kazakhstan in 2007. Companies are recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement in Kazakhstan.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Political Corruption

The current public procurement law of Kazakhstan was passed in 2002 and is reasonably progressive in its provisions. However, implementation of the law is still very problematic, as can be seen from the Kazatomprom case. In this case, former head of the state nuclear energy company Kazatomprom, Mukhtar Dzhakishev, accepted bribes from contractors in exchange for awarding state contracts to them and illegal sales of shares of major state uranium mines to offshore companies in 2009. Consequently, Dzhakishev was charged with embezzlement and sentenced to 14 years of hard labour, according to a March 2010 article by Central Asia Online. 

In a highly publicised case brought by the financial police, Zhaksybek Kulekeyev, the head of Kazakhstan Temir Zholy, the state railroad company, was accused of accepting a USD 100,000 bribe for, among others, helping relatives gain tenders on a number of deals. The independent media reported that no convincing evidence or witnesses were available in relation to this case, implying that this could be seen as politically motivated, according to Freedom House 2009.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 2.8 on a 7-point scale (1 'very common' and 7 'never occurs').

- Business executives give the favouritism of government officials towards well-connected companies and individuals when deciding upon policies and contracts a score of 2.8 on a 7-point scale (1 'always show favouritism' and 7 'never show favouritism').

The World Bank & IFC: Enterprise Surveys 2009:
- Approximately 55% of the companies surveyed expect to give gifts to secure a government contract.

- The average value of gift given to secure a government contract amounts to more than 5% of the contract value (the highest amount in the region).

EBRD & World Bank: BEEPS Kazakhstan 2008:
- The value of an unofficial payment made to secure a government contract typically constitutes 6% of the contract value.

Environment, Natural Resources and Extractive Industry

Business Corruption

Companies report that bribery is not uncommon when dealing with environmental inspections in Kazakhstan. For instance, Global Integrity 2010 reports that business inspections by government officials to ensure public environmental standards are often carried out in an arbitrary and ad-hoc manner, and bribes are sometimes extracted from companies in return for favourable treatment or expedited processing.

In addition to concerns about tax stability, contract sanctity, and tender transparency, companies in the oil and gas industry have reported difficulty doing business for a number of other reasons, including alleged environmental violations followed by large fines. According to the OECD Securing Resources for Environmental Regulation and Enforcement in Kazakhstan 2009, environmental authorities in Kazakhstan should not be authorised to use fines as a source of funding since this could create incentives to maximise revenue instead of compliance. This approach could also facilitate corruption, particularly if the flow of public payments is exempt from regular budget control, according to the report.

Political Corruption

As Kazakhstan has vast oil-resources, the scope for corruption in extractive industries is enormous. According to the former Finance Minister of Kazakhstan, Zeynulla Kakimzhanov, 80% of all oil companies are operating in offshore zones. In general, contracts between the oil sector and the Kazakhstani government lack transparency, as reported by the executive director of Transparency Kazakhstan, Sergei Zlotnikov. The most well-known and widely publicised instance of corruption in this sector is the 'Kazakhgate' case, in which US businessman James Giffen was accused of funnelling more than USD 78 million to high-ranking officials in the Kazakhstani government during the 1990s. Oil companies paid conditional deposits into a Swiss account under Giffen's control, and these funds, along with success commissions from Kazakhstan paid to Giffen's company for securing contracts with foreign oil companies, were used to pay-off two of the most senior officials in Kazakhstan - allegedly former Prime Minister Nurlan Balgimbaev and President Nazarbayev himself. In 2003, Giffen was arrested by the US Department of Justice on foreign bribery charges, but his trial was still ongoing as of 2010 due to procedural technicalities. In November 2010, Giffen was acquitted of all charges, according to a 2010 article by Main Justice.

In a more recent case, a Texas-based oil company, Baker Hughes, agreed to pay a fine of USD 44 million in April 2007 after being found guilty in the US of violating US anti-bribery laws. Part of the fine is related to the complaint that the officials of the company paid USD 4.1 million in bribes to a high level Kazakhstani executive of Kazakh Oil, the state-owned company.

In June 2009, former Environment Minister Nurlan Iskakov and two of his deputies went on trial, charged with financial manipulation and embezzling more than USD 6 million from the state budget, as indicated in a July 2009 article by BBC News. In October, Iskakov was sentenced to four years of imprisonment, while the two deputy ministers avoided imprisonment with conditional sentences of 2 to 3 years, according to a 2009 article by APA.

In 2009, the authorities arrested the chairman of the state uranium company on charges of abuse of office. He was subsequently convicted and sentenced to 14 years in prison, according to the US Department of State 2010.

Public Anti-Corruption Initiatives

  • Legislation: Kazakhstan accessed the United Nations Convention against Corruption in June 2008. Kazakhstan's anti-corruption legislative framework is relatively strong and amendments and additions to several laws related to anti-corruption were passed in the summer of 2007, although these were primarily curative rather than preventative. The Criminal Code criminalises active and passive bribery, attempted corruption, extortion, money laundering, abuse of office, as well as bribe facilitation by third parties. Bribing a foreign official has recently become a criminal offence too. The Law on the Fight Against Corruption defines what actions are corrupt and the conditions under which persons are responsible and punishable for corruption. Article 9 of the Law on the Fight Against Corruption requires that asset declarations made by state officials stay secret. Reviews of these declarations do not normally take place and the fact that they are kept secret means that they are not subject to the scrutiny of the media or society. Amendments to the Law on the Fight Against Corruption were passed in December 2009. These amendments increase punishments for corruption crimes, institute mandatory asset forfeitures, broaden the definition of corruption crimes to include fraud committed by government officials, and criminalise the acceptance of a bribe on behalf of a third party and acceptance of intangible assets. Further details of the amendments to the anti-corruption law are yet unknown. The law also extended the definition of government official to managers of companies in which the government holds more than a 35% stake. The Law on Civil Service and the Law on the Fight Against Corruption require state officials to report conflicts of interest, but there is no mechanism in place to deal with these conflicts when they arise. The Parliament of Kazakhstan has approved amendments to the Law on Law-Enforcement Bodies of Kazakhstan. The long-term purpose of the bill is to combat criminality, including corruption offences, and to protect public order. The new bill on Law-Enforcement Bodies of Kazakhstan is expected to reduce corruption in the sphere of law enforcement through improvement of working conditions of law enforcement bodies. Access the Lexadin World Law Guide for a collection of legislation in Kazakhstan.

  • Government Strategies: The government has conducted civic awareness campaigns about corruption and continues to revise and raise the salaries of public officials to match those in the private sector in an effort to reduce the incentive for officials to take bribes. A new post of 'responsible secretary' with equal rank to deputy minister was introduced in 2007 as part of the government's administrative reform and anti-corruption programme. The objective of the new post was a planned streamlining of bureaucracy and the introduction of corporate management principles into government ministries and departments. However, the efforts to streamline and reduce government bureaucracy in order to reduce corruption and increase efficiency have stalled. Moreover, some critics point to the fact that the 'responsible secretary' position has not replaced that of deputy minister, indicating that bureaucracy has in fact swelled rather than shrunk. The President has started a number of anti-corruption campaigns, the latest of which was launched in January 2009, according to the Bertelsmann Foundation 2010. Nonetheless, the source reports that there is little public trust in these campaigns or that corrupt public officials will be adequately punished under the law. In the early 2009, the government adopted an anti-corruption policy, which includes promised pay rises of 15% for public servants, a 60% rise for local court judges and an almost 300% boost in salaries for traffic police, as reported by Bertelsmann Foundation 2010. However, in overall terms, corruption remains rampant. The country's anti-corruption agency, the Financial Police (see below) has developed a State Programme for Fighting Corruption for 2006-2010 intended to reduce the level of corruption in all spheres of life by increasing efficiency and coordination of the activities within and between state bodies and civil society. Access the Strategic Anti-Corruption Plan 2010-2014 (in Russian).

  • Anti-Corruption Agencies: The Agency of the Republic of Kazakhstan on Fighting with Economic and Corruption Crimes (Financial Police) is responsible for investigatin different types of economic crime, such as active and passive bribery, abuse of office, and smuggling. The agency is weak and falls under the authority of the president's office, which has caused some criticism as to its accountability towards the legislature. Analysts have criticised the agency's lack of trustworthy personnel and even the President himself has admitted to having received complaints about corrupt Financial Police officers employed at the agency. According to Global Integrity 2010, the Financial Police is not effectively protected from political interference. Similarly, according to the report, the appointments to the body are sometimes made based on political considerations, and individuals appointed may have clear party loyalties. Also, the head of the Financial Police is in practice not protected from removal without relevant justification. According to Freedom House 2011, in general the anti-corruption bodies in Kazakhstan are used by the state to 'settle scores with inconvenient highly placed officials' and businessmen. During the first eight months of 2010, more than 470 people were convicted of corruption, including one minister and five vice ministers and mayors, according to the head of the Financial Police, as cited in the US Department of State 2010.

  • Auditor-General: State financial control is opaque, but exercised by the Accounts Committee for Control of the Execution of the Republican Budget. This body is subordinate and refers directly to the president. However, it is legally protected from interference by all other branches of government and can effectively initiate its own investigations. Formally, the Parliament has to approve the state budget and auditing reports. According to the OECD Anti-Corruption Network 2006, there is no need to subordinate the auditing institution to the Parliament. There is reportedly a lack of coordination and cooperation between the Accounts Committee and the Ministry of Finance Financial Control Committee, which shares a very similar mandate. According to Global Integrity 2010, the appointments to the Accounts Committee do not sufficiently support its independence from the executive; thus, appointments may be politically influenced, and individuals appointed may have clear party loyalties. According to the report, the government does not always react on the findings of the audit institution and may sometimes ignore or give only superficial attention to the audit reports. 

  • Ombudsman: In law, the Ombudsman Office is well-protected from political interference. However, according to Global Integrity 2010, the Ombudsman is not sufficiently protected from political interference in practice and it may sometimes be influenced by political or personal incentives, including conflicting family relationships, professional relationships, as well as threats and abuses of power. This perception is supported by Freedom House 2011, according to which, the Ombudsman has limited rights to monitor human rights and is officially barred from any 'interference with the work of either the police or the judicial system'. The Office was established by decree in 2002. It can initiate formal complaints, but it remains unclear whether the Ombudsman has the power to initiate criminal investigations, and there have been far too few investigations initiated in relation to the size of the office's mandate which covers the entire public sector. The Ombudsman's public complaint mechanism is reportedly ineffective. The office publishes readily available online reports (in Russian) quarterly and annually. According to Global Integrity 2010, the government sometimes ignores the findings of the Ombudsman or only gives them superficial attention, particularly if they concern politically sensitive issues.

  • General Prosecutor's Office: The General Prosecutor's Office is responsible for supervising the observance of law by government ministries and institutions, but is under executive influence and the opposition is highly critical of its lack of impartiality. It has been criticised for involving itself in cases where the state does not have a direct interest, but where it might be able to extort bribes, while simultaneously failing to protect citizens whose cases are deemed less important by the authorities.

  • E-Governance: The Electronic Government of the Republic of Kazakhstan web portal is a useful entrance point for companies, providing information on business planning, starting and liquidating a company, investments and trade, taxes and licensing, crediting and public procurement. The site also has information of special relevance to SMEs. Moreover, the site provides individual citizens with useful information and forms concerning taxes, migration, legal services, social protection and employment.

  • Public Procurement: Kazakhstan's Public Procurement Law 2002 stressed the development of a transparent, competitive and objective public procurement regime. The law requires competitive bidding for major procurements and provides strict formal requirements to limit the extent of single sourcing. A tender failure is declared if only one responsive bid was received, according to ADB & OECD Anti-Corruption Initiative for Asia and the Pacific Curbing Corruption in Public Procurement in Asia and the Pacific 2006. Access to the procurement process is well advertised and open for both companies and citizens. Information regarding procurement legislation and bidding documentation on government procurement can be found at the Ministry of Finance Financial Control State Procurement Committee website (only through the Kazakh and Russian version). The committee's website has published a list of unreliable suppliers and companies, legally barred from participating in future bids. However, according to Global Integrity 2010, companies guilty of major violations of procurement regulations, such as bribery, are in practice not effectively prohibited from participating in future procurement bids, which is an obstacle for transparency and anti-corruption efforts in procurement. Amendments were made to public procurement law in late 2008 that limit the powers of government agencies to influence the public procurement process. The Law on Amendments to Public Procurement Law primarily intended to increase transparency and openness and to eliminate major possibilities for corruption in public procurement and to introduce an electronic system for Kazakhstan's procurement system. E-procurement became operational in 2009. Up-to-date procurement information can be found on the public procurement web portal. While in law there are mechanisms that monitor the assets, incomes, and spending habits of procurement officials, enforcement of conflict of interest regulations for public procurement officials is weak. Investors have also raised concerns over the transparency and efficiency of the government procurement process and the framing of laws that strongly favour domestic suppliers in all sectors. Companies can challenge procurement decisions in court and contact the Ministry of Finance in order to appeal the legitimacy of tendering procedures. 

  • Whistle-Blowing: The Law on Fight Against Corruption guarantees the inviolability of the people who contribute to the fight against corruption. Private sector employees and civil servants who report cases of corruption and abuses of power or resources are legally protected from recrimination or other negative consequences. Whistleblowers can access the Agency of the Republic of Kazakhstan on Fighting with Economic and Corruption Crimes trustline to anonymously report acts of corruption. However, the agency is itself considered to be systemically corrupt and, in practice, whistle-blowing is considered taboo and a breakage of corporate loyalty. According to Global Integrity 2010, civil servants and private sector employees are not always protected from recrimination or other negative consequences in practice when they report corruption, despite legal protections.

  • General Comments on the Public Anti-Corruption Initiatives: Kazakhstan has a relatively broad anti-corruption legal and institutional framework. However, the lack of systematic enforcement and implementation of the framework and the executive's penetration of all facets of political office mean the framework remains to a great extent an empty shell. There is a lack of coordination and coherence between government institutions involved in anti-corruption. Civil society could also be much more actively and positively involved in the government's anti-corruption programmes as opposed to the identified incrimination of civil and political rights NGOs (see Civil Society section under 'Private Anti-corruption Initiatives'). On a more positive note, it should be mentioned that Nazarbayev's administration seems to have made some progress in terms of anti-corruption efforts, intensifying its awareness campaign to address corruption, and convicting several high-ranking government officials for embezzlement and abuse of office.

Private Anti-Corruption Initiatives

  • Media: Freedom of media and freedom of expression are protected in the constitution, but in practice these freedoms are not satisfactorily enforced. According to Freedom House 2011, most media in Kazakhstan are regulated by the government and controlled by leading financial groups entrenched in the ruling circles. The same report further states that the few independent media outlets existing in the country have been rendered non-competitive and, as a result, operate mainly on the Internet. In January 2009, Parliament adopted an amendment package for Kazakhstan's media law that puts into place some changes that have long been recommended by civil society and the international observers. The amendments eased some of the administrative burdens on media, simplifying the registration process and the possibility for the media to appeal to courts against denials of governmental information, and the possibility to use voice recorders and cameras to collect, but not to disseminate, information. Nonetheless, another Freedom House 2011 source reports that President Nursultan Nazarbayev and his Nur Otan party continue to use restrictive tactics, including arbitrary arrests and prosecutions to muzzle critical media outlets. Hence, further reforms are needed. According to Reporters Without Borders 2010, media prosecutions involve accusations for 'defaming' the President, often resulting in the closure of opposition newspapers and physical harassment of journalists. In 2009, the weeklies Taszharghan and Respublika faced closure after courts ordered them each to pay fines of USD 300,000 to 400,000 on dubious pretexts, according to Freedom House 2010. Additionally, the editor of the weekly Alma-Ata Info received a 3-year sentence for revealing state secrets while reporting on a corruption investigation. Furthermore, media outlets have been subjected to numerous interventions ranging from tax audits to fire and safety inspections and encounter continual difficulties in finding printing houses. Citizens are generally able to access the internet but regular usage is only around 3%, connection costs are quite high, and some websites are blocked by the government. According to the Bertelsmann Foundation 2010, the new Kazakhstani Law on Mass Media fails to comply with OSCE obligations. Reporters Without Borders 2011 ranks Kazakhstan 162nd out of 178 countries, while Freedom House 2011 ranks the country 172nd out of 196 countries and describes its media environment as 'not free'.

  • Civil Society: Civil society in Kazakhstan is not well developed and its freedom to operate is limited in practice. This is due partly to the fact that the country has no significant history of civic participation in political life, but also because of the strong executive control over society. There are 5,000 non-governmental organisations in Kazakhstan, of which over 1,700 are operating actively, according to Freedom House 2011. Furthermore, most of these are quasi-governmental, propped up to compete with independent NGOs in obtaining grants, and fewer than 200 are able to make a positive impact. A 2007 amendment authorising the state to fund NGOs has allowed a number of NGOs to receive support from the government. However, the process of issuing contracts is less than transparent, and government officials reportedly demand kickbacks, as emphasised by the Freedom House 2011. The increase in state funding has heralded a decline in international donor aid. The government has sought to reward and fund pro-government NGOs, while portraying the opposition, independent NGOs, and civil society organisations either as obstructing the democratic pursuit or as simply incapable of devising effective policies.

  • Transparency Kazakhstan: Transparency Kazakhstan, a local chapter of Transparency International, researches instances of corruption and provides recommendations on anti-corruption issues. The organisation holds workshops, seminars and conferences in order to engage the population more in anti-corruption awareness and efforts. In June 2008, Transparency Kazakhstan held an anti-corruption conference, 'Public Mechanisms on Preventing Corruption in Kazakhstan', which brought together government officials, civil society representatives, and diplomats. At this conference, the role of, among others, public institutions was discussed. The website of Transparency Kazakhstan has valuable information, including surveys on issues such as the amount and types of corruption in the oil and gas sector. In 2008, Transparency International launched an Anti-Corruption Legal Centre (ALAC, in Russian) in Kazakhstan. The ALAC aims at promoting the relationship between citizens' demand for justice based on corruption cases, and the capacity of the system to address these cases.

  • Soros Foundation Kazakhstan: Soros Foundation Kazakhstan has come to play a significant role in shaping social policy through its effectiveness and widespread influence in many spheres. It has aimed at combating corruption, increasing access to information, supporting independent mass media, enhancing education and culture, strengthening the institutions of civil society, and helping protect vulnerable groups. Soros Foundation Kazakhstan has established the Kazakhstan Revenue Watch as another entry point for information on oil and gas revenues. Kazakhstan Revenue Watch, among other NGOs, has criticised companies and the government for insufficient backing of the EITI.

  • Extractive Industries Transparency Initiative (EITI): Kazakhstan joined the EITI in 2005. In 2007, the NGO coalition Oil Revenues under Public Oversight published an evaluation report on the first two years of EITI implementation in Kazakhstan. According to the report, effective implementation is lacking, with a failure to spread the principles of the initiative to all companies in the extractive industries sector, and too few human and capital resources invested in the implementation of the initiative. According to the Bertelsmann Foundation 2010, the effectiveness of the Extractive Industries Transparency Initiative remains negligible.

  • Adil Soz: Adil Soz is a foundation for protection of freedom of speech. The main goal of this foundation is establishment of an open civil society based on free, objective and progressive journalism. Adil Soz regularly publishes reports and books on the conditions of journalists in Kazakhstan.

Resources

The websites listed below provide useful facts on Kazakhstan as well as contacts and tools for companies operating in Kazakhstan:

 

Sources for further reading:

Conventions and Indices

UNCAC Status: Accessed 18 June 2008.

Status on UNCAC Implementation
This field describes the country's status on the United Nations Convention against Corruption. Please note any declarations and reservations made upon ratification. The list of signatories can be found on the UNODC website. Read more about the UNCAC.

Other Relevant Conventions or Treaties:

 

Transparency CPI: 2010: 105/178 (Score: 2.9)

Transparency CPI
This field consists of the score for the country in question on the Corruption Perceptions Index from Transparency International as well as its ranking.

World Bank CORR Index (-2.5 - +2.5): 2009: - 0.91

World Bank Corruption Index
This field consists of the score for the country in question on the 'Control of Corruption' indicator in the World Bank Governance Research Indicator Country Snapshot (GRICS): 1996-2009.

OECD Country Risk Classification (0-7): 2011: 5

Country Risk Classification
The classification of countries by risk category has the aim of providing OECD countries with a basis for calculating the premium interest rate to be charged to cover the risk of non-repayment of export credits. Countries are placed in risk categories 0 - 7, with 0 being the lowest risk category and thus the least expensive. Conversely, premium group 7 is the highest risk category. Each classification is comprised of 2 components: 1) an assessment of the country's economic/financial situation, and 2) its overall political stability. Access the complete list of OECD Country Risk Classification figures.

Data Verification:

Publication date: October 2011

Data verified by: Global Advice Network

Information Network

 

Relevant Organisations

 

Transparency Kazakhstan / Anti-Corruption Legal Centre (ALAC, in Russian)

85 Karassai Batir Street
Office 41, 4th Floor
Almaty 050026

Tel/Fax: +7 (7272 726 981
Hotline: 2 600 678
E-mail: alc_voronov@mail.ru / zlotnikov@transparencykazakhstan.org / natali_m@transparencykazakhstan.org

Transparency International local chapter and anti-corruption legal advice centre.

Soros Foundation Kazakhstan

Soros Foundation-Kazakhstan
111 a-9, Zheltoksan Street
Almaty 050000

Tel: +7 7272 503 811
Fax: +7 7272 503 814
E-mail: sfk@soros.kz / pft@soros.kz

NGO working to shape social policy, encourage anti-corruption and an active civil society.
Contact Kazakhstan Revenue Watch - a program of the Soros Foundation Kazakhstan - on e-mail: pft@soros.kz

Adil Soz

142 Bogenbay Batyr Street, Office 828
Almaty 050000

Tel/Fax: +7 7272 911 670 / +7 7272 501 025/043/051
E-mail: info@adilsoz.kz

Free speech NGO. 

 

Partner Embassies

 

Trade Council of Denmark

130 Begalin Street
Almaty 050051

Tel: +7 7272 917 754
Fax: +7 7272 938 262
E-mail: alahkt@um.dk

Trade council.

Embassy of the Netherlands

62 Kosmonavtov Street
3rd Floor
Chubary mcrd.
Astana 010000

Tel: +7 7172 555 450
Fax: +7 7172 555 474
E-mail: ast@minbuza.nl

Embassy Office
103, Nauryzbai Batyr Street
Almaty 050022

Tel: +7 7272 503 773
Fax: +7 7272 503 772
E-mail: alm@minbuza.nl

Embassy.

Honorary Consulate of Sweden

Consulate of Sweden
42 Timiryazeva Street
"Expo City" office centre area
Pavilion 15/1 "B"
Almaty 050057

Tel: +7 7272 954 101 / +7 7272 503 773 (Visa via Dutch Embassy)
Fax: +7 7272 980 120 / +7 7272 503 772/631 957 (Visa via Dutch Embassy)
E-mail: almaty.sweden@topmail.kz / alm@minbuza.nl (Visa via Dutch Embassy)

Honorary consulate.

Embassy of Norway (in Russian, Kazakhstan is covered by the Norwegian embassy in Moscow, Russia)

Ulitsa Povarskaya 7
Moscow 131940

Tel: +7 495 933 1410
Fax: +7 495 933 1411
E-mail: emb.moscow@mfa.no

Embassy.

British Embassy

62 Kosmonavtov Street
Renco Building 6th Floor
Astana 010000

Tel: +7 7172 556 200
Fax: +7 7172 556 211
E-mail: BritishEmbassy@mail.online.kz

Embassy.

Embassy of Austria

62 Kosmonavtov Street, 9th Floor
Mikrodistrikt Chubary
Astana 010000

Tel: +7 7172 977 869/78/79 (Amt)
Fax: +7 7172 977 850
E-mail: astana-ob@bmeia.gv.at

Embassy.

Country Profile Sources

General Information Sources

Corruption Levels Sources

Judicial System

Police

Licences, Infrastructure and Public Utilities

Land Administration

Tax Administration

Customs Administration

Public Procurement and Contracting

Environment, Natural Resources and Extractive Industry

Public Anti-Corruption Initiatives Sources

Private Anti-Corruption Initiatives Sources