The Cold War Zombie Law That Uses Jews as an Excuse

January 7, 2022 Tablet

Vladislav Davidzon, a Russian-American writer and a Non-Resident Fellow at the Atlantic Council writes:

“A more relevant obstacle that remains in the way of Kazakhstan’s quest for trade normalization is an unresolved investment dispute. Though the country positions itself internationally as a safe haven for business, Kazakhstan has a lingering repetitional issue over its ongoing treatment of international bondholders, including the American fund manager Argentem Creek Partners. Argentem had invested in the country’s oil and gas industry in the mid-2000s, and saw those investments forcibly taken over by the Kazakh authorities in what an international tribunal later ruled was a coordinated campaign of harassment by various Kazakh officials and police. Argentem’s managers had a track record of investing in emerging economies and turning around troubled companies in countries like Ukraine.

For several years since, Argentem and the original owners of the seized energy assets have been pursuing compensation in international courts. In 2013, a Swedish arbitrator awarded the owners of the nationalized assets $500 million in damages. The Kazakhs can no longer appeal that ruling, but having lost their case, they have so far declined to compensate bondholders, including Argentem. Taking a calculated diplomatic risk, the government escalated last year by filing a countersuit in a New York court, which has so far only created more doubt about its approach to the rule of law. Until the investment dispute is settled, American supporters of trade normalization with Kazakhstan will remain in a relatively weak position, and Jackson-Vanik probably isn’t going anywhere.

When I asked Ambassador Ashikbayev whether the Americans have tried to link Kazakhstan’s trade status to the ongoing court drama, he denied “any linkage between these issues.” But a senior member of the U.S. government who is familiar with the particulars of the Kazakhstan portfolio told me on background, and quite bluntly, that normal trade relations will not be established until all outstanding accounts are settled. This seems to be a clear-cut case of the way that U.S. diplomats still use Jackson-Vanik to gain leverage in negotiations over issues that have nothing to do with the people the law was designed to help.”