Kazakhstan is implicated in violating Western sanctions by facilitating Russia's access to prohibited goods, risking secondary sanctions from the West. President Tokayev's stance reflects this contradiction, as increased trade activities in 2022 suggest Kazakhstan's significant role in bypassing sanctions against Russia.
Source: https://www.dw.com. The border between Russia and Kazakhstan remains very busy
Kazakhstan finds itself in a complex geopolitical situation, endeavouring to balance its economic relations with Russia against its commitments to Western sanctions. President Kassym-Jomart Tokayev's recent statements during a visit to Germany on the 29th of September have brought this dilemma into sharp focus. He emphasized Kazakhstan's intention to maintain robust cooperation with Russia while adhering to Western sanctions. This stance presents an inherent contradiction, as strict compliance with sanctions is practically incompatible with extensive economic collaboration with a sanctioned nation.
The customs union and free currency exchange between Kazakhstan and Russia facilitate trade and complicate the enforcement of sanctions. In 2022, Kazakhstan's export figures surged to $84.4 billion, a significant increase from its consistent $60 billion annual exports over the previous seven years. This increase cannot be entirely attributed to oil exports, Kazakhstan's primary commodity, even though oil prices were favourable.
The anomaly in Kazakhstan's trade figures is further underscored by the parallel increase in imports, which rose unprecedentedly in 2022. This disparity suggests the involvement of "parallel imports" — goods and services imported into Kazakhstan and then rapidly re-exported. This phenomenon is likely used to help Russia circumvent Western sanctions.
Corruption within Kazakhstan's customs administration and police force exacerbates the situation. Irregular payments and bribes are commonplace in cross-border trade, and customs regulations are complex and lack transparency. Some customs clearing companies, allegedly affiliated with local business clans, operate with minimal government oversight, potentially facilitating the passage of goods across the border. This lack of control complicates Kazakhstan's ability to block parallel imports to Russia effectively.
The risk of secondary sanctions for Kazakhstan is not just hypothetical. The growing tensions between Washington and Moscow and intensified attacks in Ukraine have raised questions over the role of Russia’s neighbours, particularly Kazakhstan. EU lawmakers have passed legislation for an 11th sanctions package that targets entities in third countries assisting Russia in circumventing sanctions, with Kazakhstan being named as a potential target. In the upcoming 12th EU sanctions package, there will be a focus on tightening measures against the possibility of overriding sanctions through parallel imports using countries like Kazakhstan.
Investigations have revealed Kazakhstan's role as a transit point for electronic components and other dual-use goods to Russia. These items are often used by the Russian military and defence enterprises, thereby undermining the effectiveness of the sanctions.
Despite Tokayev's assurances of neutrality and responsible conduct, practices such as the continued issuance of individual identification numbers (IINs) to Russian nationals and indirect support of Russia through parallel imports suggest otherwise. The United States and the EU are increasingly focusing on secondary sanctions, which could significantly impact Kazakhstan's economy and its business relations with the West.
The article was prepared for publication by volunteers from the Res Publica - The Center for Civil Resistance.
