VZCZCXRO0370
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #2716/01 2710203
ZNR UUUUU ZZH
R 280203Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0827
INFO RUEHAST/USOFFICE ALMATY
RUCNCIS/CIS COLLECTIVE 0262
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 002716 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN - SUMAR 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV EIND ENRG PGOV KTDB KZ
SUBJECT: GOVERNMENT OF KAZAKHSTAN PROPOSES RESOLUTION OF CUSTOMS 
SHUTDOWN 
 
Ref: A) Astana 2511 
 
ASTANA 00002716  001.2 OF 002 
 
 
¶1. (SBU) Summary.  A new amendment to the Customs Code, enacted by 
the Government of Kazakhstan (GOK) on July 26, mandates submission 
of export declaration forms when bringing goods into the country 
"for free circulation."  When the new statute came into force on 
August 21, it immediately stopped the entry into Kazakhstan of goods 
originating from countries, which do not allow sharing of such 
export declarations, particularly the U.S. and the European Union. 
Embassy Astana has also been unable to bring in some shipments.  In 
response to repeated appeals by the Ambassador, Prime Minister 
Masimov acknowledged the government's "mistake" but stated that 
correcting it will require enactment of new legislation, which will 
take time.  In a meeting with Charge today, Vice Minister of Finance 
outlined a short-term solution.  End summary. 
 
USG Aggressively Pushes for Resolution of Customs Shutdown 
--------------------------- ------------------------------ 
 
¶2. (SBU) Post first became aware of the stoppage of U.S. goods at 
the Kazakhstani customs due to difficulties in clearing diplomatic 
shipments and raised the issue with the Customs Committee.  Calls to 
Post from U.S. companies soon followed.  On September 5, Special 
Representative for Commercial and Business Affairs J. Frank Mermoud 
brought up the issue with Prime Minister Masimov, who described the 
matter as being "within his competence" and stated that it should 
soon be resolved. (ref A)  The Ambassador has discussed the customs 
shutdown with Masimov on three different occasions.  On September 
10, the Ambassador also sent a letter to Finance Minister Korzhova 
(note: the Customs Committee operates under the aegis of the 
Ministry of Finance.  End note.), which stated that U.S. law 
prevents sharing of customs declarations and asked for immediate 
release of the goods held at the border. 
 
¶3. (SBU) Speaking to the Ambassador, Masimov acknowledged that the 
new law, initially "aimed at the Chinese," was a "mistake" and now 
needs to be corrected with another legislative change.  Masimov told 
the Ambassador on September 23 that a government session this week 
will draft a law for Parliament's consideration.  However, Masimov 
did not hazard a guess as to how long the process would take. 
Chevron executives have told the Ambassador that the company's CEO 
has raised the issue with Nazarbayev as a very urgent matter. 
Nazarbayev, Chevron representatives added, appeared surprised. 
 
¶4. (SBU) Post has also been working to resolve the non-release of 
goods headed for the Embassy, a problem shared by many diplomatic 
missions accredited in Kazakhstan.  With Management Counselor's 
active involvement, a letter was drafted and sent on behalf of 
Astana's diplomatic corps by Deputy Foreign Minister Zhoshybayev. 
 
Solution in Sight? 
------------------ 
 
¶5. (SBU) On September 27, Charge met with Vice Minister of Finance 
Daulet Yergozhin.  Yergozhin told Charge that draft legislation to 
"fix" the problem caused by "a badly drafted law" is in the works 
but may take "a couple of months" to enact.  (Note: According to 
other sources, draft legislation has now been given by the 
government to Parliament.  End note.)  Yergozhin also said that the 
problem can, in the meantime, be resolved by having the U.S. qualify 
for an exemption.  What is needed, Yergozhin stated, is for the U.S. 
customs authorities to provide a letter, addressed to the Chairman 
of the Kazakhstani Customs Committee and notarized by the 
Kazakhstani Embassy in Washington, stating that it is illegal under 
U.S. law to share export declaration forms.  Yergozhin noted that 
communication on this subject needs to occur between two customs 
authorities due to the International Customs Union's requirements. 
A copy of this letter, followed by the original, would be 
acceptable.  Yergozhin stated that U.S. goods would then be exempted 
from the export declaration submission requirement "within 24 
hours."  Yergozhin also told Charge that the head of the Customs 
Committee has now ordered Atyrau customs authorities to permit 
Chevron's shipments to enter Kazakhstan.  (Note: Chevron executives 
had earlier told Charge that the company's slowdown of production 
due to delays in receiving shipments is costing the GOK $6 million a 
day in lost tax revenues.  End note.) 
 
Comment 
------- 
 
¶6. (SBU) Comment.  Post has pushed hard for an end to the customs 
shutdown.  The Prime Minister is clearly aware of the problem and is 
working to resolve it.  He is seeking to enact legislation lifting 
or limiting the export declaration requirement, but this will take 
time.  As that process takes place, we are seeking a short-term 
solution to ensure that U.S. goods are permitted to enter 
Kazakhstan.  Charge's meeting today with Vice Minister of Finance 
 
ASTANA 00002716  002.2 OF 002 
 
 
provides hope that such a solution is possible.  End comment. 
 
MILAS