Written evidence from Dr John Heathershaw (AFP0029)

Dictators beyond borders? Authoritarian challenges to the integrity of professional services, the protection of refugees, and academic freedom in the UK

Professor John Heathershaw, University of Exeter

Supplement to oral evidence given to the Foreign Affairs Committee, Autocracies and UK Foreign Policy inquiry, 5 June 2019

23 July, 2019

Introduction

1. I am Professor of International Relations at the University of Exeter.  My recent book, co-authored with Alexander Cooley, explored the global politics of authoritarianism with regard to post-Soviet Central Asian states.[1]  I am director of the Central Asian Political Exiles project[2], which looks at the security measures used by governments from the region against their political opponents overseas.  I am also principal investigator of an Anti-Corruption Evidence[3] project which tests compliance with beneficial ownership checks by Western professionals with respect to Central Asian and African political elites.
2. Few autocracies are great powers which represent a traditional or non-traditional security threat to the UK. Countries like China and Russia are the exception to the rule.  Most are small to mid-sized states which are also kleptocracies. The concerns of such states are regime security over national security and elite rent-seeking over national development.  These autocracies are composed of networks of elites where political power and economic might are fused.  As a political leader in such a state you are also rent-seeker and gate-keeper of the economy. 
3. The regional focus of the evidence presented here is Central Asia, a region of around 85 million people which may be expected to be least-likely to have an influence on UK economy and society than any other in the world. The five post-Soviet Central Asian republics of Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan are routinely considered to be one of weak and isolated states.  However, as the analysis below show, Central Asian elites have become globalised ‘by embedding their transactions in transnational networks’.[4] But globalization has not engendered liberalization; the politics of the region has become increasingly authoritarian and repressive to citizens at home and political exiles abroad. In Transparency International’s 2018 Corruption Perception Index (CPI) of public sector corruption, all five Central Asian countries are ranked in the bottom third of those countries perceived to be the most corrupt, with Turkmenistan ranked 161st and Uzbekistan 158th out of 180 countries.[5]
4. However, the UK is not simply ‘at risk’ from this transnational authoritarianism. Rather, British and UK-based actors have created the conditions which produce this risk.  Professional intermediaries in the UK and its Crown Dependencies and Overseas Territories operate within an anti-money laundering (AML) regime which includes hard and soft law.  Company service providers, bankers, and estate agents are required to undertake Know Your Customer (KYC) checks, perform enhanced due diligence in regard to Politically Exposed Persons (PEPs) and report suspicious activity.  However, with large financial incentives to service an emerging new elite, our Anti-Corruption Evidence project is gathering many examples of real estate bought by PEPs from Central Asia which indicate that either the legislation is not strong enough, compliance with these rules is inconsistent, or enforcement by law enforcement is poor.[6]
5. Despite sitting near the top of the CPI, it is Britain’s financial services which enable a good amount of the laundering of this corrupt money and the integration of these authoritarian elites in the UK’s economy and society.  This supplementary evidence focuses on three risks emerging from this entanglement.  They are: (a) money laundering for autocrats by professional intermediaries; (b) transnational repression against refugees and political exiles; and, (c) challenges to academic freedom engendered by the internationalisation.  Although some complexity is found in the fact that they span multiple departments of state, these challenges are perfectly surmountable for government.
6. Foreign policy which fails to understand this about autocracies may lead to the following policy failures with respect to autocracies: (a) it may promote UK business in the country without acknowledging that British businesses and professionals may be incentivised to act illegally in order to succeed in the country; (b) it may engage in security cooperation and counter-terrorism assistance with regimes who are unreliable partners who use this material and moral support to target their political enemies; (c) it may promote international academic cooperation on terms which are financially beneficial to universities but which place academic freedom in UK higher education at risk.

Suspicious transactions for Central Asian autocrats by UK professional intermediaries

7. Central Asian elites routinely use anonymous shell companies to move and potentially launder money via the UK economy and financial services industries. A 2016 reform requires beneficial owners of UK registered companies to be placed on record, yet legislation is only as strong as its enforcement. Research conducted in 2018 by Global Witness suggests that 390 companies have company officers or beneficial owners who are politicians elected to national legislatures, either in the UK or in another country, and that 7,848 companies share an owner, officer or registered postcode with a company suspected of having been involved in money laundering.[7]
8. When then-prime minister David Cameron outlined his government’s plans to crack down on suspicious funds used in the UK property in a speech in Singapore in 2015, he referred specifically to a property portfolio that features a building valued at over £130 million, and situated in the centre of London: 215-237 Baker Street. From 2008-2015, it was ultimately owned by a series of secretive companies registered in the British Virgin Islands which serve to hide the identity of the true owner or owners.[8] From 2016, the ultimate owner was switched to a company in the United Arab Emirates; however, the ‘daughter’ company – responsible for the property portfolio’s management including rent collection – continues to be registered in the United Kingdom.[9] Anti-corruption organisations have investigated this property in an attempt to uncover its likely owners, although the nature of offshore secrecy and the difficulty of penetrating these networks make unravelling exactly who owns the property a difficult task.[10]
9. It is often UK professional services which enable such secrecy for autocrats in the UK. In 2015, a Global Witness report suggested that the UK company that owned the building on Baker Street had ties to Rakhat Aliyev, the former son-in-law of the president of Kazakhstan (1991-2019), Nursultan Nazarbayev.[11] Lawyers representing the nominee director of the holding company owning the properties denied Aliyev was the owner, but refused to name the actual owner, citing reasons of confidentiality.[12] A subsequent investigation reported that Rakhat Aliyev’s former wife, Dariga Nazarbayeva (the eldest daughter of then President Nazarbayev) and their son Nurali Aliyev are linked to the properties. Both have held key positions in Kazakhstan and both have accrued hundreds of millions of dollars in private wealth.[13]
10. Many other cases of money laundering in UK property have demonstrated similar patterns of suspicious activity, apparently unreported by professionals or not investigated by authorities.  Gulnara Karimova, the daughter of the former President of Uzbekistan (1991-2016) and a senior Uzbek official until 2013, has been convicted of bribery offences related to around a $US 1 Billion.[14] The head of the U.S. Department of Justice’s criminal division has said that the case was “the largest forfeiture actions we have ever brought to recover bribe proceeds from a corrupt government official.”[15] Karimova’s boyfriend, Rustam Madumarov, bought properties in London worth more than £17 million using shell companies and a network of offshore accounts. Two companies registered in the British Virgin Islands acquired the properties. Prosecutors in Uzbekistan have described both Madumarov and Karimova as members of an “organised crime network”. [16] The properties were reportedly seized by the Serious Fraud Office in 2018, although one property had already been sold in 2012.[17]  Such enforcement of AML rules against elites from autocracies typically only takes place after they have fallen from grace, allowing them to benefit from graft when in power.
11. More commonplace is the uninterrupted completion of sales between prominent Britons and autocrats and their allies.  For example, Timur Kulibayev, son-in-law of the first president of Kazakhstan, purchased using a company registered in the British Virgin Islands a 12-bedroom mansion, which had been home to Prince Andrew and Sarah Ferguson, for £15 million, which was at least £3 million over the asking price,[18] and £8.6 million more than Kulibayev was advised by a surveyor that the house would be worth at auction.[19] It was bought through “apparently concealed” links to a series of offshore companies.[20] Kulibayev has also purchased two large blocks with adjoining mews properties in Mayfair for about £45 million, also using companies registered in the British Virgin Islands.[21]

Transnational repression against refugees and political exiles

12. Not only does suspicious money flow from autocracies to the UK, but its repressive politics may extend to here too, sometimes with the support of UK-based ‘reputation managers’ and private intelligence companies.[22] More broadly, ample evidence exists of the tracking of political opponents by post-Soviet regimes in Europe.
13. For example, The Central Asian Political Exiles database details ‘transnational repression’ where political opponents of the regimes are frequently harassed while overseas, illegally returned or attacked and assassinated.  We record over 60 cases of the forcible return, attack and assassination which have occurred in the post-Soviet period with an increase since 2005, particularly from Tajikistan and Uzbekistan.  Most of these cases occur within the post-Soviet space but they are also found in EU countries.  These include: the extraordinary rendition from Italy in 2013 of the family members of the Kazakh oligarch Mukhtyar Ablayzov, formerly based in the UK; the 2012 attempt on the Uzbek cleric Obid-khon Nazarov in Sweden[23]; the 2015 killing of the Tajik oppositionist Umarali Kuvatov in Turkey[24]; and, countless cases in Russia itself (including 18 suspected cases from the Central Asian republics of Uzbekistan and Tajikistan between 2011 and 2016 alone).  Such cases are commensurable with the attacks on Alexander Litvinenko and Sergei Skripal in the UK which were likely ordered by the Russian state.
14. More commonplace are the ‘everyday’ measures of transnational repression which take place against political exiles and their associates in the UK/EU.  This includes: violence and other measures against family members who remain in the home country (and are unable to claim asylum via restrictive family reunification policies); online harassment and intimidation against exiles including the uses of spyware and malware; the abuse of the Interpol red notice system to make arrest requests against registered refugees, preventing them from travelling.  Our research has suggested that these measures are commonly used by Central Asian states against their exiles in Europe.  In the UK, I know of one anonymous case of a Central Asian exile, invited to the UK to speak at a prestigious institution, being denied a visa by the Home Office on the evidence of his home government’s politically-motived declaration of his opposition party as a terrorist organisation.  What is shocking here is how the Home Office decision directly contradicts UK policy of refusing to accept this declaration. 
15. In targeting their political exiles, Central Asian governments also employ UK professional services to support their political goals.  The government of Kazakhstan has employed many UK companies and British consultants to help manage its reputation and counteract criticism.  These companies include Arcanum Global, World PR (registered in Panama, but founded in London[25] and headed by a British citizen[26]), Portland Communications and FTI Consulting. Portland Communications was found to have altered a Wikipedia page of a political opponent of the Kazakh regime after he was granted asylum in the UK in 2011, and FTI Consulting discussed using “search engine optimisation” so google results for this political opponent (who had been accused of money-laundering and fraud in Kazakhstan) would be more likely to say “fraudster” rather than “dissident”. It also proposed paying a Swiss NGO for an ostensibly independent report condemning the political opponent. Kazakhstan’s lawyers and lobbyists were also reported to have urged UK agencies such as the Serious Fraud Office to open criminal investigations into the political opponent, to no avail. [27]

Academic Freedom and international cooperation with autocracies

16. As some UK professional services support the interests of ‘dictators without borders’ in the UK, so do some UK-based researchers become the targets of authoritarian regimes when conducting fieldwork, threatening civil society and academic freedom.  The recent cases of the killing of Cambridge PhD student Giulio Regeni in Egypt in 2016, the detention of Durham PhD student Matthew Hedges in UAE in 2018, and the detention of my own research associate Alexander Sodiqov in Tajikistan in 2014 bear witness to the risks of research in authoritarian states.[28]  All these countries have friendly relations with the UK but in each case allegations of espionage on behalf of the UK appear to be part of the circumstances of the academics’ death or detention.  In these cases, the global footprint of UK universities became a matter of UK foreign policy. 
17. More commonly, research collaborations between academics based in the UK and those in autocracies are subject to everyday harassment and interference from the authorities. The Taskforce on Fieldwork Safety of the Central Eurasian Studies Society (2016) surveyed members of the society and found that such tactics are commonplace.[29] Anonymous testimonies demonstrate that travel bans, ‘interviews’ with the security services, detentions for hours and days, and threats against family members, are commonplace for academics working on projects with UK universities.[30] Given these conditions it is common for international research teams to reframe research questions and avoid difficult subjects in order to complete a project. 
18. It may be of little surprise that UK academics are at risk in autocracies, however, it may be more alarming that students and staff from authoritarian states may remain at risk when on UK campuses.  Kazakhstan’s Boloshak programme is monitored by the country’s national security services while students are subject to surveillance and control measures via heavy reporting requires and through the instrumental use of Kazakh societies on UK campuses.[31]  China takes a similar approach to its study-abroad programmes, ensuring ideological conformity and the control of Chinese student societies.[32]  The possibility of critical thinking students being recalled home, or losing their scholarship, makes self-censorship commonplace. 
19. UK policy in this area is incoherent.  ‘Internationalisation’ of UK universities is encouraged by the government as part of the growth of UK service sector exports but comes with officials limits which put cooperation in greater jeopardy.  Visa denials for foreign scholars by the Home Office make cooperation more difficult as they restrict access to the relatively safe spaces of UK universities.  The 2019 conference of the European Society for Central Asian Studies at the University of Exeter saw around 20 visa refusals based on the purported risk of over-stay despite no evidence to support this fear.  This pattern of excessive suspicion has been repeated across the UK with frequent denials of visas despite these foreign scholars having been sponsored by a UK university.[33] 
20. Within the university sector, this internationalisation is presently driven by market incentives with apparently little thought to the value of academic freedom upon which the success of UK universities has been built over centuries. In her 5 March 2019 response to questions from FAC Chair Tom Tugenhadt MP, the Chair of University UK Janet Beer argued that ‘universities must sensitively balance the need to uphold academic freedom with the importance of international academic collaboration’.[34]  The balance metaphor – where one policy goal is traded against another – is always seductive but here is fundamentally misplaced.  Academic freedom is a bedrock of UK universities and cannot be traded against other values.  Rather it is a condition of engagement with autocracies which must not been diluted due to the profits generated by a foreign campus, the requirement of major state sponsors, or even the greater good of international partnership. 

Implications and Recommendations

21. Worries about the ‘ideological and strategic resurgence of authoritarianism’[35], including those about Russian interference in elections and collusion with the leaders of liberal democracies, risk missing the bigger picture.  Networks of globalised political elites span the supposed divide between ‘liberal’ and ‘authoritarian’ orders.  At the same time, the market forces of globalization make these transnational connections appear unavoidable and provide incentives for professional bodies and regulators to look the other way. In terms of the matrix of risks, elected politicians and public institutions in the UK are far more likely to be complicit in advancing the socio-economic interests of authoritarian elites and institutions than colluding with them to directly advance their political interests. 

22. The participation of UK professionals and institutions includes both passive complicity with autocracy and professional enabling of repression. This is corrosive to liberal democracy as it undermines of the rule of law.  Moreover, such corrosion of society and economy will rapidly affect the polity as it becomes acceptable to make concessions to authoritarian norms and institutions as awareness of entanglement and a feeling of impotence takes hold.  It would be easy for the FCO to declare that these transnational flows lay outside the remit of foreign policy as other government departments (Treasury, Education, Home) preside over the loopholes and risks which have been identified above. However, these risks are central to foreign affairs in the twenty-first century and areas of FCO involvement may be identified. 

23. We recommend the following policy measures for the UK government in general and the FCO in particular:
1. The Foreign Office should play a role in the hunt for stolen assets. The FCO should strive to bolster ties and information sharing between HM Revenue & Customs (the body responsible for regulating company service providers in the UK), the Department for Business, Energy and Industrial Strategy (responsible for Companies House), and the National Crime Agency regarding UK assets controlled by PEPs from autocratic states.
2. The FCO should have a more systematic role in advising the Home Office on visas, especially with regard to political elites.  On the one hand the UK should more robustly apply visa denial provisions against senior officials from systematically corrupt governments, as advised by the FCO. On the other hand, and in order to maintain an independent policy of visas and immigration, the Home Office should consult with the relevant UK embassy before denying visas to political oppositionists on the basis of declarations by their home governments.  Finally, and with FCO involvement, a system of fast-tracking of short-term and multi-entry visa applications for activists and scholars should be introduced.  
3. The FCO’s annual human rights and democracy report should lead the way in becoming the first national government to report systematically on transnational repression.  Academics, civil society and human rights groups should be consulted by the FCO in order to add this element to the format and content of the annual report.  The FCO may thereby identify policy objectives with respect to, for example, the reform of Interpol and the protection of journalists. 
4. Universities UK should be encouraged to draw up a UK standard on internationalisation.  Such a policy would seek to protect basic academic freedoms on UK campuses and in UK universities’ research and education partnerships overseas, particularly in authoritarian states.  A wide consultation process across the sector would need to be undertaken by UUK in order for the policy to have value and legitimacy in the eyes of UK-based academics.  The FAC Chair’s correspondence with UUK suggests the Committee may serve as a catalyser of this process.
5. UK state funders of research should be required to collect short statements from grant applicants on how they protect academic freedom in their international partnerships.  Funders including DFID, GCRF and UKRI currently lack systematic means to assess these risks, which are particularly acute with regard to partnerships in difficult political environments including autocracies.  The committee may write to these funders asking them to report on how they ensure the academic freedom of UK-funded research. 

September 2019