As World Leaders Meet at COP29 Climate Summit, Report Spotlights International Network Behind Azerbaijan’s Petrostate Kleptocracy

Law firms, banks, and power players “grease the wheels” of $13 billion empire controlled by Azerbaijan’s first family

“Squadron of enablers” spans the globe from Baku to the UK, Singapore, Malaysia, and Panama

 

November 21, 2024 (London and Washington, DC) – A cohort of law firms, banks, and highly placed individuals spanning the globe from London to Singapore have enabled the operations and growth of a secret $13 billion petrostate business empire controlled by Leyla Aliyeva and Arzu Aliyeva, the daughters of Azerbaijan’s President Ilham Aliyev and Vice President Mehriban Aliyeva.

A new report by The Sentry, “Azerbaijan’s Enablers: Exposing the Team That Helped Construct and Maintain the Aliyev Empire,” published today details the operations of facilitators, including banks directly under the control of the Aliyev family that are able to receive, house, and move money; law firms practiced in the creation and maintenance of corporate entities; and trusted individuals within the Aliyev inner circle willing to act as front persons to disguise the Aliyeva sisters’ various illicit schemes.

Today, the Aliyeva sisters sit atop a kleptocratic family empire comprising a network of businesses and assets spanning more than 12 countries. Their business empire has enabled them to amass an enormous personal fortune, while their father has ruled with an iron fist, stifling the rights and freedoms of Azerbaijanis.

Statement by The Sentry: “Leyla and Arzu Aliyeva have relied upon a squadron of enablers—both inside and outside Azerbaijan—to operate this vast kleptocratic machine, to grease the wheels and to keep it hidden from public view. However, such heavy reliance on enablers creates an opportunity for disruption. Government agencies, law enforcement, regulatory bodies, banking compliance teams, and others in the public and private sectors have the tools in hand to deny these facilitators access to the essential services that allow the operation of a petrostate kleptocracy to survive and thrive.”

 

Enablers of the Aliyev Empire spotlighted in the new report include:

• PASHA Bank, the largest private bank in Azerbaijan by equity.
• Pilatus Bank, a private bank (now shuttered), headquartered in Ta’ Xbiex, Malta.
• Banque Havilland, a private bank headquartered in Luxembourg, whose banking license was recently revoked.
• Child & Child, a London law firm.
• Mann Made Group, an Isle of Man fiduciary.
• The Trident Trust, a BVI-headquartered financial services company.
• Naqiz & Partners, a law firm based in Malaysia.
• Portcullis TrustNet, a Singapore-based offshore services provider.
• Morgan & Morgan, a Panama law firm.
• Hassan Gozal, an Iranian businessman and an associate of Leyla and Arzu Aliyeva, having served alongside them as a director of three companies in the British Virgin Islands.
• Olivier Mestelan, a Swiss lawyer and art collector, and business associate of Azerbaijan’s first family, having served alongside Leyla and Arzu Aliyeva as director and treasurer of several companies in Panama.
• Behzad Ahadpour Khanghah, an Iranian businessman who co-manages Leyla and Arzu Aliyeva’s UAE company Sahra FZCO.
• Manouchehr Ahadpur Khanghah, an Azerbaijani-Iranian businessman, whose UAE company MIRK General Trading LLC acted as the property manager and rent collector for several luxury villas and hotels in Dubai jointly owned by Leyla and Arzu Aliyeva and the sons of Azerbaijan’s Emergency Situations Minister Kamaladdin Heydarov.
• Arif Pashayev, father of Vice President Mehriban Aliyeva and the grandfather of Leyla and Arzu Aliyeva, a research scientist and supposedly the driving force behind PASHA Holding, a sprawling Azerbaijani conglomerate set up shortly after President Ilham Aliyev came to power.
• Gafar Gurbanov, a former Azerbaijan tax ministry, director of the Triangle Group, a London-based real estate investor and family office manager, and the former chairman of AtaHolding.
• Mir Jamal Pashayev, the deputy chairman of the board of directors of PASHA Holding, a cousin of Vice President Mehriban Aliyeva, and the nephew of Arif Pashayev, President Ilham Aliyev’s father-in-law.
• Ashraf Kamilov, an Azerbaijani businessman and a former official at the Azerbaijan tax ministry, chief executive of AtaHolding.

Key recommendations:

The Sentry’s report serves as a starting point for the public and private sectors to identify their exposure to the Aliyev Empire—identifying vulnerable countries or regions, flagging the presence of enablers, increasing due diligence—and to take action.

                For the private sector

• Banks and other financial institutions should use the case studies and categories of enablers discussed to identify red flags and share typologies. This can lead to more effective reviews of existing clients and guard against potential exposure via the onboarding of new clients and their accounts.
• Banks and other financial institutions should use the data available in The Sentry’s “Aliyev Empire” in their due diligence processes to identify higher risk entities and individuals with links to the sisters.
• Banks and other financial institutions should increase their engagement with government, regional, and other public institutions to best identify the enablers and categories mentioned in this report with a view toward sharing intelligence, thereby ensuring that enablers are not able to move looted funds and profits.
• Banks, third-party service providers, and other financial institutions should adopt policies and processes that allow for clear lines of communication with civil society and journalists in order to act upon information relating to enablers.
• Professionals working in the legal, accountancy, and real estate sectors should use the case studies and categories discussed to identify red flags both in ongoing relationships and for client onboarding. They should report suspicious activities to local financial intelligence units.

                 For the public sector

• Governments and regional bodies should use the case studies and categories of enablers mentioned in this report to identify particular susceptibility to enablers linked to Azerbaijan, with a view toward the implementation of enhanced tools of financial pressure, including AML compliance.
• Governments and regional bodies should issue alerts or advisories focused on enablers that include real-world examples—such as those cited in this report—highlighting the dangers of working and engaging with enablers in high-risk jurisdictions such as Azerbaijan.
• The US, the UK, the EU, Canada, Australia, and other jurisdictions should prioritize applying targeted network sanctions via Global Magnitsky-style or other appropriate sanctions regimes against enablers, including, where appropriate, those cited in this report. Sanctions against enablers, given their access to the global financial system, tend to be particularly effective when done multilaterally.
• Law enforcement agencies in the US, the UK, the EU, and other jurisdictions should prioritize the rising influence of enablers and their links to increased illicit financial flows and kleptocracy. Focused initiatives should be launched to investigate the provided examples and, more widely, enablers’ modes of operations. Suitable law enforcement tools should be engaged to disrupt, investigate, and prosecute, when possible.
• Practitioners of regulated professions—for example, lawyers and accountants—should, through appropriate bar and accountancy associations, launch kleptocracy-focused initiatives to work with and train members on the dangers posed by kleptocracies, the commonalities across countries, and the links between corruption, conflict, and human rights violations. When enablers are exposed within the scope of these regulated professions, significant fines and other sanctions that serve to both penalize and deter should be sought.
• Governments and regional bodies, in conjunction with the private sector where appropriate, should also ramp up support for further research into the Aliyev empire and its associated kleptocratic actors and enablers.

Read The Sentry’s “Azerbaijan’s Enablers” report: https://thesentry.org/reports/azerbaijan-enablers

The Sentry’s “Atlas” platform, launched last month, provides an interactive network map and expert insights detailing the intricate network of entities, enablers, and assets of a kleptocratic empire. To access Atlas, visit: https://atlas.thesentry.org

Access “Aliyev Empire” on The Sentry’s Atlas: https://atlas.thesentry.org/azerbaijan-aliyev-empire

For media inquiries, please contact: Greg Hittelman, Director of Communications, [email protected]

About The Sentry
(Short descriptor for press use: “The Sentry, an investigative organization that tracks corruption.”)
The Sentry is an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy. Pull back the curtain on wars, mass atrocities, and other human rights abuses, and you’ll find grand corruption and unchecked greed. These tragedies persist because the perpetrators rarely face meaningful consequences. The Sentry aims to alter the warped incentive structures that continually undermine peace and good governance. Our investigations follow the money as it is laundered from war zones to financial centers around the world. We provide evidence and strategies for governments, banks, and law enforcement to hold the perpetrators and enablers of violence and corruption to account. These efforts provide new leverage for human rights, peace, and anti-corruption efforts. Learn more at: https://TheSentry.org