AIFC – A New Financial Hub in Central Asia

A little more than a month ago, the first International Financial Center Astana (AIFC) was opened in the capital of Kazakhstan. So far, 55 participants have registered at the exchange, but by 2020, Kazakhstan authorities announced the prospect of more than 500 companies participating in the AIFC. Plans, of course, grandiose, but how feasible?

The building of the financial center “Astana” is familiar, without exaggeration, to every Kazakhstani. The center works on the basis of the infrastructure of the international exhibition EXPO-2017 and seems to have adopted progressive ideas from its predecessors. Getting to the territory of the AIFC, you do not immediately realize that you are even in the capital, but nevertheless the countries of the former post-Soviet space. But this was what its creators sought, according to Kazakh President Nursultan Nazarbayev’s intentions Astana International Exchange, this is the full name of the exchange, AIFC should become an international financial hub in Eurasia.

The idea of ​​creating a stock exchange arose from the Kazakh authorities three years ago. And it demanded, first of all, the political will of the leadership: in Kazakhstan they even rewrote the constitution. In the main law of the country a new item appeared. Within Astana, a special legal regime can be established in accordance with the constitutional law. Here, on this special legal regime, I want to dwell in more detail. By creating a financial center in their country, Kazakhs, of course, have adopted the experience of other countries where such a stock exchange operates – the UAE, China, the United States, Singapore. But Kazakhstan needed to declare to the whole world that in the state, whose independence is only 27 years old, it is possible to create such a financial oasis on the basis of English law. And the status of AIFC judges, people who guarantee protection of the rights and interests of foreign investors, only emphasizes the country’s desire to get a perfect image, which would be guided by large, transnational companies. The mission of the court is registered on the official site of the IFAC: to create and develop a completely independent common law judicial system for the prompt resolution of civil and commercial disputes, characterized by reliability, fairness and accessibility, unconditional application of the rule of law and flexibility, which meets the needs of international business. And among the goals I would like to single out one thing: to promote the growth of regional trade by increasing confidence in the administration and access to justice in the AIFC, Kazakhstan, the Eurasian region and globally. And under this text is the name of the chairman of the court of the international financial center, Lord Wolfe. Personality in world jurisprudence is significant, however, like the composition of the entire court. Lord Harry Kenneth Woolf is one of the most influential figures in British legal history. He is the Supreme Court Judge of England and Wales, the first President of the Court of the Qatar International Financial Center, ex-judge of the Court of Appeal of the Hong Kong Court, ex-Chairman of the Legal Committee of the Bank of England’s Financial Market.

Lord Wolfe in Kazakhstan will work with 8 other British lawyers and judges, all of them are real stars of international law, for example, the IFC advisory council was headed by the royal lawyer Michael Blair, and among the judges, in addition to Mr. Wolfe, the ex-minister Justice of Great Britain Edward Folks, Sir Jack Beatson and Sir Rupert Matthew Jackson – authors of textbooks in the field of law. And English law, as a fundamental one in the IFC, was not chosen by chance in Kazakhstan. The system of English justice is known far beyond England, official London is not only a financial but also an international legal center. That is, we can safely say that even the authority of the chairman of the court of the financial center is a guarantee of a qualitative and truly fair judicial system. And the authorities of Kazakhstan do this in every possible way: the decision of the lawyers of the AIFC is a priority, and in its work the court of the center is absolutely autonomous.

As strategic partners of Astana International Exchange, Kazakhstan side managed to attract the Shanghai Stock Exchange and the American NASDAQ. At the same time, Chinese experts, as the main shareholders, will assist in strategic and business planning, technology consulting, developing a strategy for expanding the market. And NASDAQ will help in the development of technologies for easy access of investors to financial instruments using its Nasdaq Matching Engine system. According to AIFC Governor Kairat Kelimbetov, a well-known Kazakhstan economist, the former head of the national bank of the country, the international center already cooperates with major financial institutions – the World Bank, the IMF, the EBRD, ADB, the Asian Bank for Infrastructure Investments, the new Development Bank of the SCO countries.

The country’s leadership sets ambitious targets for AIFC: assistance in attracting investments in the economy, creating a special environment for investing in financial services, developing the securities market of the Republic of Kazakhstan, insurance, banking services, and the Islamic finance market. By the way, AIFC intends to provide a full line of products. And preferences the Kazakh government provides unprecedented, for example, exemption from taxes for 50 years.

It is already known that Kazakhstan intends to place shares of national companies on the exchange: Air Astana, Kazatomprom, Kazakhtelecom, Kazmunaigaz, Samruk-Energo, Kazpost, Tau-Ken Samruk, Qazaq Air.

In one of the interviews devoted to the opening of the AIFC in Kazakhstan, a representative of the international consulting company Control Risks, specializing in strategic research of global risks, Timothy Stanley announced his forecasts. In his opinion, the work of the financial center will positively affect not only the economy of the country, but also the political image of this Central Asian state. Now Kazakhstan, especially against the background of neighboring countries in the region, carries in itself minimal political risks. The country has a relatively low sovereign debt with the possibility of servicing it. Of course, the raw material dependence of the economy is still relevant, but at the same time, the state creates conditions both for its diversification and for the development of large business. American economist and Pulitzer Prize winner Daniel Yergin has very accurately described the mission of the international financial center “Astana” during the presentation of the Center to investors – a place where the money and its owners feel comfortable. More precisely, perhaps, you will not describe. The world has a new financial bridge between Europe and Asia. According to preliminary forecasts of the Kazakh authorities, the AIFC will be able to attract about 2 billion US dollars to the economy of the country. Plans for the Kazakh authorities are grandiose and quite feasible, Competition for investors is becoming increasingly tough and only the product that meets the requirements of modern realities will be able to get investments.

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