KAZAKHSTAN'S CUSTOMS SHUTDOWN DRAGS ON AMID HOPES FOR

UNCLAS SECTION 01 OF 02 ASTANA 002823

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR SCA/CEN - O'MARA
DEPT PLEASE PASS TO USTR, COMMERCE, DHS

E.O. 12958: N/A
TAGS: ECON ETRD EINV EIND ENRG PGOV CASC KTDB KZ
SUBJECT: KAZAKHSTAN'S CUSTOMS SHUTDOWN DRAGS ON AMID HOPES FOR
RESOLUTION

Ref: Astana 2716

ASTANA 00002823 001.2 OF 002



1. (SBU) Summary. The Kazakhstani customs shutdown, precipitated by
the late-August enactment of a law with severe unintended
consequences (reftel),continues. The Government of Kazakhstan
(GOK) is pursuing a potential resolution on two different tracks:
enactment of a law designed to relax the current requirement for
submission of customs export declarations; and finding a legal basis
to allow the import of goods currently stuck in customs warehouses.
Post is continuing to aggressively push for a temporary solution and
looking to ensure that the new draft law currently considered by
Parliament is adequate in allowing the import of U.S. goods into
Kazakhstan. Please see action request in paragraph 6. End
summary.

The Root of the Problem
--------------


2. (SBU) The late-August enactment of the law requiring submission
of customs export declarations for goods entering Kazakhstan, the
culprit behind the ongoing shutdown, was apparently driven by the
authorities' desire to introduce a mechanism for more accurate
valuation of goods imported into Kazakhstan, particularly from
China. The only exemption provided in the law is for goods
originating "from countries that do not produce" export declaration
forms. According to Kazakhstani customs officials, the U.S., which
"produces" (even though it does not allow "sharing" of) customs
declarations, does not qualify for the exemption. GOK officials
have repeatedly stated to us that they have no choice but to enforce
the law strictly as written or face the possibility of being
personally prosecuted by the General Procuracy, a special body that
answers directly -- and only -- to the country's president.

A Short-Term Solution?
--------------


3. (SBU) Following extensive communication with Post and apparent
wrangling between the Customs Committee and the Finance Ministry
(under the umbrella of which the Customs Committee operates),a
possible short-term solution began to take shape. On October 11,
Deputy Chairman of Customs Committee Dusebayev informed DTRO Chief
that he was authorizing release of all diplomatic shipments
(pursuant to the Vienna Convention) and outlined a framework for
resolving the stoppage of U.S. imports into Kazakhstan. Given that
the enactment of the new draft law is expected soon (various Finance
Ministry and Customs officials currently estimate that the law will
be enacted within two weeks to a month),Dusebayev told DTRO Chief
that he is willing to start enforcing the new law now. He stated
that he is issuing an order to allow U.S. goods to pass through
customs upon submission of an invoice with a U.S. notary stamp.
Considering a large backlog of U.S. goods currently stuck in
Kazakhstani customs warehouses, Post expects that this solution --
assuming it holds -- will lead to a high short-term demand for
notary services of Post's Consular Section.

The New Law: Will It Work for the U.S.?
--------------


4. (SBU) The requirement for a notarization stamp raises serious
questions about the acceptability to the U.S. of the GOK's new
approach. While the new draft law is still under consideration by
Parliament (and is, therefore, subject to change),its original text
(provided to the Parliament by the Government) raises concerns.
According to Customs Committee sources, this text requires: "a copy
of a customs declaration or a substitute document certified by the
customs agency of the country of origin." "Certification," Customs
officials have explained, implies a stamp.


5. (SBU) Finding a short-term solution may be gaining additional
urgency. Some companies trying to import U.S. goods into Kazakhstan
have contacted Post with concerns that their goods, currently stuck
in Kazakhstani customs warehouses, may soon be declared 'contraband'
on the basis of a statutory deadline. However, head of the Customs
Committee's Legal Department Kasymbekov assured Econoff on October
12 that this threat is non-existent. Goods can be declared
'contraband,' Kasymbekov stated, only if they remain unclaimed for a
specified period of time. This, he stressed, is not the case with
goods currently held in customs warehouses due to the shutdown.

Action Request
--------------


6. (SBU) Post requests guidance on two issues. 1. Is it acceptable
for Post's Consular Section to notarize invoices in order to assist
passage of commercial U.S. goods through Kazakhstani customs? 2.
Post requests a joint consultation by DOS, DOC, DHS, and USTR to

ASTANA 00002823 002.2 OF 002


provide analysis of the new draft law as stated in paragraph 4. If
the new requirement is unacceptable, Post requests talking points
for raising U.S.G. concerns with the GOK.

MILAS