VZCZCXRO4247
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1220/01 2040156
ZNR UUUUU ZZH
O 230156Z JUL 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5842
INFO RUCNCIS/CIS COLLECTIVE 1783
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1150
RUEHKO/AMEMBASSY TOKYO 1852
RUEHUL/AMEMBASSY SEOUL 0811
RUCNDT/USMISSION USUN NEW YORK 2403
RUEHNO/USMISSION USNATO 2721
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1335
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1247
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 001220 
 
SENSITIVE 
SIPDIS 
 
STATE FIR SCA/CEN, ISN, EUR/RUS 
PLEASE PASS TO USTR 
 
E.O. 12958:  DECL: N/A 
TAGS: PREL PGOV ECON ETRD KNNP WTRO AF RS KZ
SUBJECT:  KAZAKHSTAN:  AMBASSADOR RAISES BN-350 PROGRAM, WTO 
ACCESSION WITH PM MASIMOV 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  The Ambassador asked Prime Minister Karim Masimov 
on July 22 to ensure Kazakhstan meets its funding commitment for the 
BN-350 spent fuel program and to sign a decree facilitating transfer 
of the program's fuel transport casks and railcars to Kazakhstani 
entities.  Masimov promised to take action and issue instructions to 
the appropriate ministries.  He told the Ambassador that Kazakhstan 
is proceeding with the Russia-Belarus-Kazakhstan Customs Union in 
accordance with the June 9 Moscow announcement, though a final 
decision will be made on how to reconcile the customs union with the 
countries' WTO aspirations at a November heads-of-state summit in 
Minsk.  Masimov said that Under Secretary Burns's July 10 meeting 
with President Nazarbayev was very important for Kazakhstan, and 
reported that he had invited Special Representative Holbrooke to 
visit Astana in August.  He stressed the importance of continuing to 
move forward on the Public-Private Economic Partnership Initiative 
(PPEPI, see septel).  END SUMMARY. 
 
BN-350 PROGRAM 
 
¶3. (SBU) During a July 22 meeting, the Ambassador asked Prime 
Minister Karim Masimov to take action to ensure that Kazakhstan meets 
its commitment to provide $5 million in 2009 for our bilateral 
program to transport and store the spent fuel from Kazakhstan's 
decommissioned BN-350 plutonium breeder reactor.  He also asked 
Masimov to sign a decree, already prepared by the Ministry of Energy 
and Mineral Resources, which will permit Kazakhstani entities to take 
ownership of program's fuel transport casks and railcars without 
incurring negative financial and tax consequences.  The Ambassador 
further suggested that the Kazakhstani government consider issuing a 
general decree that would resolve this problem for all future 
property transfer cases under our assistance programs. 
 
¶4. (SBU) Masimov responded that he was already aware of these issues 
to an extent.  He promised to take action to resolve them, including 
giving the necessary instructions to the Ministry of Economy and 
Budget Planning and Ministry of Energy and Mineral Resources. 
 
WTO ACCESSION AND THE CUSTOMS UNION 
 
¶5. (SBU) The Ambassador noted that at the G-8 summit in L'Aquila, 
Italy, Russian President Medvedev appeared to have partially walked 
back the June 9 announcement in Moscow that Russia, Belarus, and 
Kazakhstan, would suspend their individual efforts to join the WTO in 
favor of acceding together as a customs union.  He asked Masimov 
about the impact of Medvedev's statement.  Masimov responded that 
Kazakhstan is still operating in accordance with the June 9 
announcement, since it had not received any official notification 
from the Russians that they have adopted a new approach.  Regular 
consultations with Moscow are ongoing, and a final decision on how to 
proceed will be taken by heads of state at a November summit in 
Minsk, he explained. 
 
¶6. (SBU) Masimov said that in any event, Kazakhstan remains intent on 
acceding to the WTO.  He explained, "I feel that we can find a 
mutually acceptable solution that will also be good for the WTO and 
the United States."  He stressed that Kazakhstan nevertheless needs 
open access to the Russian market, and argued that the customs union 
will help attract significant investment to Kazakhstan, because it 
has a better investment climate and more liberal tax regime than both 
Russia and Belarus.  Perhaps also admitting there are other factors 
motivating the customs union, Masimov quoted an excerpt from a book 
by former Indian Prime Minister Vajpayee that he had recently read: 
"We can change history, but we can not change geography; we can 
change our friends, but we can not change our neighbors." 
 
BURNS VISIT, PPEPI 
 
¶7. (SBU) Masimov then turned to the bilateral relationship, noting 
 
ASTANA 00001220  002 OF 002 
 
 
that Under Secretary Bill Burns's July 10 meeting in Astana with 
President Nazarbayev was Kazakhstan's first high-level meeting with 
the Obama Administration.  "This was very important, and we valued it 
very highly," he explained.  Masimov said it is essential that we 
continue moving forward on the Public-Private Economic Partnership 
Initiative (PPEPI).  "At some point, the global economic crisis will 
be over, and there will be new investment opportunities in 
Kazakhstan," he added. 
 
INVITATION TO SPECIAL REPRESENTATIVE HOLBROOKE 
 
¶8. (SBU) Masimov said he had recently spoken by telephone with 
Special Representative Richard Holbrooke, and had invited him to 
visit Kazakhstan in August to discuss bilateral cooperation on 
Afghanistan. 
 
¶9. (SBU) Masimov informed the Ambassador that former EUR DAS David 
Merkel had accepted an invitation to join the international advisory 
board of Astana's new showcase university, and would occasionally be 
visiting Kazakhstan in this capacity.  He added that he had received 
word that former Secretary of State Rice might be interested in 
making a private trip to Kazakhstan at some point in the future. 
 
HOAGLAND