The authorities of Kazakhstan demand to strengthen the control of goods re-exported to the final destination, transmits Financial Times (FT), quoting “officials” of the republic. This measure, the publication explains, is necessary in the context of the West’s desire to prevent companies and individuals from helping Russia to circumvent sanctions.
Kazakhstan has the longest land border with Russia among Central Asian countries, FT recalls. In 2022, the republic faced a sharp increase in exports to the Russian market, which is experiencing problems with the supply of many imported goods (eg household appliances) due to sanctions.
“Kazakhstan, which is one of Russia’s closest partners due to its historical and cultural ties, has not imposed any sanctions or restrictions on trade with it. But it also maintains close trade relations with the EU”, writes the Financial Times, noting that after the start of the military operation in Ukraine, Kazakhstan is forced to “balance on the diplomatic tightrope” in order to maintaining ties with Russia and not damaging its relations with the European Union.
Kazakh officials say the “explosions” in export volumes are due not only to increased re-export of goods to Russia, but also to other reasons. They also point to the measures taken by the authorities of the republic to comply with the sanctions restrictions, such as the introduction of a new customs control system.
By data According to Eurasianet, from April 1, 2023, the Kazakhstan Customs Service will use a new online tool that will allow it to monitor the entire chain of movement of re-exported goods “from border to border” in real time.
“We all understand the risks of secondary sanctions, so we are closely monitoring our mutual trade with all our partners,” a senior Kazakh official told the FT, adding that the country is “constantly working to reduce the risks associated with re-exports.”
Data from the National Bureau of Statistics of Kazakhstan shows a 25% increase in exports to Russia in 2022 compared to 2021. For example:
in 2021, washing machines were not exported from Kazakhstan to Russia at all; in 2022, their export volume has reached nearly 100,000 pieces.
In addition, explains the FT, citing Kazakh officials, a large part of the goods re-exported by the republic to Russia, although they come from Europe, initially come from Turkey and China, which did not impose any restrictions on the trade with the Russian side.
The FT clarifies what “re-exports” mean as deliveries of imported goods, which the Russian authorities refer to as “parallel imports”, and that these alternative supply chains, which theoretically could be considered by the West as a violation of sanctions-related restrictions, include members of the Customs Union – for example, Kazakhstan and Armenia.
“Companies owned by local residents or established by Russian citizens buy goods from Western companies that left the Russian market after the start of the military operation in Ukraine or stopped exporting their products due to the sanctions” , explains the FT.
According to the publication, most often “parallel import” (re-export) is used for the supply of consumer goods – for example, mobile phones, which are re-exported to Russia from “third countries” through the countries of the ‘Customs Union .
“Parallel imports” have been introduced by the Russian authorities for certain categories (or brands) of goods that cannot be legally supplied to the country due to Western imposed sanctions. So, a week ago, the Russian Ministry of Industry and Trade allowed the import of products from the Swedish company IKEA, cosmetics brands Lancôme, Giorgio Armani and Yves Saint Laurent, as well as some brands of clothes and other products in the country.
At the beginning of March, it became known that Turkish customs had started blocking the re-export of sanctioned goods to Russia. Logistics companies explained that officials refused to process the goods without backing up their actions with official documents, but there is no need to demand justifications in this case, because the authorities would have recognized the work as part of the parallel import of goods into Russia. to document re-export issues.
