Europe Again Reminded Kazakhstan About Sanctions

Europe has noticed an increase in sanctioned products making their way from Kazakhstan to Russia. This was stated in Astana by the EU Special Envoy for sanctions David O'Sullivan.

At the same time, he thanked the Kazakh authorities for reducing the level of re-export to Russia.

On the other hand, we are seeing an increase in the re-export of certain goods, so we still have a lot to do and work out. For example, the volume of goods that fall under the 45 codes of the harmonized system occupies a small share in the turnover of Kazakhstan, is only 200 million euros per year,  David O'Sullivan said.

According to O'Sullivan, the main issue is that high-tech goods can be used for military purposes, which the EU does not want to allow.

That is why we insist on stopping the re-export of these products. Essentially, these products are high-tech: here we are talking about integrated circuits, RAM, equipment that has an optical sight, O'Sullivan explained.

In August of this year, the Kazakhstani company Defense Engineering, along with a Russian and Slovak company, was included in the sanctions list of the US Treasury. The founder and director of the company, Ashot Mkrtychev, was accused of facilitating the conclusion of arms sales transactions.

Defense Engineering LLP was set up in November 2018. Initially, the company was engaged in organizing funerals and providing other ceremonial services. The director of the company at that time was Irina Matveeva, the founder - Ashot Mkrtychev.

Re-export

Russia's supposed bypassing of European sanctions through Kazakhstan was trumpeted by the British media a year ago. Research presented statistics on Kazakhstan's exports for the previous two years. Household appliances, smartphones and other electronics were mostly imported.

The scheme worked like this:

• Payment for goods in Europe was made through a Kazakhstani legal entity
• Payment for goods with shipment from a European warehouse to the border with Belarus
• After crossing the border, the cargo was picked up by Russian or Belarusian trucks
• After that, the goods should make there way to Kazakhstan but went to Russia

Given Kazakhstan’s membership in the Eurasian Economic Union (EAEU), this method is plausible.

Goods for which the duty has been paid at the rates of he EAEU's unified tariff, when imported into the Republic of Kazakhstan, can freely move between member countries of the Union without repeated customs clearance.

The export of electronic integrated circuits has also increased 45 times — from 100 thousand to 4.5 million dollars.

Russia is an important trading partner for Kazakhstan. In his article for The National Interest, President of Kazakhstan Qasym-Jomart Toqayev wrote that Kazakhstan and Russia have special relations of mutual cooperation. But at the same time, the republic respects the territorial integrity of Ukraine.

Experts suggest that Akorda will not enter into a confrontation with the Kremlin and after a while will abandon its principles for the sake of preserving the country’s welfare.

Western leaders have already issued several warnings to Kazakhstan. David O’Sullivan is among them. In May 2023, he said that the EU had discovered a significant increase in exports from Europe to Kazakhstan with the alleged subsequent re-export of these goods to Russia. This notably concerns sensitive products that can be directly or indirectly used for military purposes by Russia against Ukraine.

That's why we are meeting with our British and American colleagues today and tomorrow. In order to start a dialogue with the government of Kazakhstan in order to examine the commodity flows in more detail, to determine if there is a problem, and, if there is one, to discuss how we could solve it, O'Sullivan said at the time.

He also added that Kazakhstan is constantly consulting with the European Union on individual transactions. And the export control of Europe checks Kazakhstani companies for certain transactions’ legality.

However, he did not specify which companies have caught their attention, adding only that Europe would in no case trade with Russian oligarchs who are under sanctions, no matter how hard they try to circumvent them.

Kazakhstan EU Relations

At the same time, O'Sullivan stressed that the EU wants to further develop relations with Kazakhstan. The European Union remains Kazakhstan's main trade and investment partner.

And we want to further promote our relations with Kazakhstan in a constructive and positive way, establish closer cooperation. I would like to note once again that we do not want sanctions to become an obstacle to our closer and deeper cooperation, he said.

Meanwhile, the Government of the Republic of Kazakhstan consistently highlights close cooperation with the European Union.

For example, on November 29, the Ministry of Science spoke about cooperation in the field of innovation and technology. Recently, the Kazakh delegation of the Science Foundation took part in the annual NCP meeting of Horizon Europe and also held talks with representatives of the Ministries of Science and Innovation of the EU.

NCP Coordinator, Deputy Chairman of the Board of the Science Foundation Aliya Sembayeva participated in trainings and focus groups on key areas: intellectual property, partnership, commercialization and support of small and medium-sized businesses within the framework of the EU program on science and innovation,  the ministry said on November 29.

The parties discussed the introduction of tools, including intellectual property and evaluation methods, in order to harmonize the R&D system with EU programs. The ministry noted that Kazakhstan may even receive the status of an associated country within Horizon Europe.

Original Author: Ilya Astakhov

DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original article in Russian for accuracy.