Kazakhstan • 06 March, 2020

Kazakhstan responds to Kyrgyzstan’s claims to WTO

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On 3 March, 2020, during the meeting of the General Council of the World Trade Organization (WTO), in accordance with the request of the Kyrgyz Republic to the WTO, the situation on the Kazakh-Kyrgyz border was discussed. The delegation of the Republic of Kazakhstan was represented by the Permanent Representative of Kazakhstan to the UN and other International Organizations in Geneva Ms. Zhanar Aitzhanova and Chairman of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan Mr. Marat Sultangaziyev, MFA reports.

The delegation of the Kyrgyz Republic stated that the Republic of Kazakhstan violates certain provisions of the WTO General Agreement on Tariffs and Trade and the WTO Agreement on Trade Facilitation. It was also noted that the economic performance of Kyrgyzstan has deteriorated due to measures taken by the Republic of Kazakhstan at the border.

In response, the Permanent Representative of Kazakhstan to the UN and other International Organizations in Geneva Ms. Zh.Aitzhanova noted that according to the Treaty on the Eurasian Economic Union, free movement of goods between the territories of the Member States are ensured without the use of customs declarations and without application of state control, including customs, transport, sanitary and veterinary-sanitary control. Consequently, all the goods which enter Kazakhstan from the Kyrgyz Republic as well as transiting through the territory of our country are exempt from customs control procedures. In this regard, the issues raised by the Kyrgyz Republic are purely related to enforcement of the EAEU legislation and should be discussed at the site of this Organization.

The Kazakhstan side emphasized that the EAEU member states have a Common Customs Territory, therefore, Kyrgyzstan’s complaint about Kazakhstan’s violation of the provisions of the WTO General Agreement on Tariffs and Trade (GATT 1994) and the WTO Trade Facilitation Agreement (CTA) is unjustified.

Further, were given examples of numerous violations by Kyrgyz cargo vehicles, in particular, during only 2019, the authorized state body of the Republic of Kazakhstan revealed more than 2600 cases of entry of goods from the Kyrgyz Republic to fictitious residents within Kazakhstan were identified. During the same period of time, 4800 cases were identified as false transits which were documented as goods destined to third countries, but actually were sold on the territory of Kazakhstan, from which VAT remained unpaid.

In this regard, the measures taken by the Government of Kazakhstan are aimed at ensuring tax administration and the completeness of VAT revenues to the country's budget. Moreover, these measures are applied equally to both domestic cargo vehicles and to cargo vehicles of the EAEU member States and third countries.

Kazakhstan also noted the need to use the full potential of bilateral consultations to resolve these issues, as well as the institutional mechanisms existing in the EAEU. 

In conclusion, the Permanent Representative of Kazakhstan called on the Kyrgyz Republic implement the commitments undertaken be the Kyrgyz Republic upon joining the Eurasian Economic Union, as well as to comply with the national legislation of its partners.

In response to the statement delivered by the Kazakh delegation, the representative of Kyrgyzstan stated that due to the impossibility of a bilateral settlement and within the framework of the EAEU, this issue will be submitted to the WTO Dispute Settlement Body.

The Permanent Representative of Kazakhstan noted that the Kazakh side is ready to defend its interests and legal measures in the framework of a dispute at the WTO. 

In addition, Kazakhstan drew the attention of WTO members to serious violations of the norms of this Organization by the Kyrgyz Republic related to the application of the minimum level of control prices for goods imported from other EAEU member States; exemption from VAT on agricultural machinery produced at enterprises of the Kyrgyz Republic; and the development of a draft Resolution of the Government of the Kyrgyz Republic providing for a ban on the import of goods in respect of which Kazakhstan applies exemptions from the CET EAEU.

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