Chapter Three — Trade Facilitation 31
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Chapter Three — Trade Facilitation 31 Chapter Three Trade Facilitation ● North-South corridor, which links the Northern Europe countries to the Persian With its common borders with China to the east, Gulf through Russia and Iran via Diny Nur- the Russian Federation to the north, the Caspian peisovoi – Oazis section (806 km), Iletsk – Sea to the west, and Kyrgyzstan, Turkmenistan and Aktau section (1,389 km), Kirgilda – Aktau Uzbekistan to the south, Kazakhstan is strategi- section (1,313 km). cally located on the transit route between Europe ● Transport Corridor Europe Caucasus Asia and Asia. Indeed, all of the transport corridors con- (TRACECA), which links Europe and Asia necting Central Asia to Europe pass through Ka- across the Black Sea, the countries of the zakhstan, including the: South Caucasus, the Caspian Sea and the ● Northern Corridor of the Trans-Asian Railway Central Asian countries via the Aktau – (TAR), which links Western Europe to China, Dostyk section (3,836 km). Korean Peninsula and Japan through Russia ● Trade facilitation has been high on the and Kazakhstan via Dostyk – Petropavlovsk government’s agenda since the country’s section (covering 1,910 km), and Dostyk – independence, as a critical element for Aksu section (covering 2,188 km). achieving regional and global integra- ● Southern Corridor of TAR, which links tion. Kazakhstan participates in 13 of the South-Eastern Europe with China and international conventions on infrastruc- Southeast Asia through Turkey, Iran, and ture, transport, border crossing facilitation Kazakhstan via Dostyk – Sary-Agach rail- maintained under UNECE (Table 3.1), and road section (1,831 km). the government has been deregulating international transport services to attract ● Central Asian corridor, which links Central Asia via Russia with the EU countries (Sary- private operators. Agach – Semiglavy Mar railroad section However, the country’s remoteness from inter- (2,134 km). national markets and land-locked status creates Table 3.1 - Kazakhstan’s participation UNECE Transport Agreements and Conventions191 Area Convention Infrastructure ● Agreement on Main International Traffic Arteries of 1975 ● Agreement on Important International Combined Transport Lines and Related Installations of 1991 Road traffic and road safety ● Road Traffic of 1968 ● Road Signs & Signals of 1968 Vehicles ● Vehicles Regulations of 1958 Other Legal Instruments ● Work of Crews International Road Transport of 1970 Related to Road Transport ● Contract for the International Carriage of Goods by Road of 1956 Border crossing facilitation ● TIR Convention of 1975 ● Customs Container Convention of 1972 ● Harmonization of Frontier Controls of Goods of 1982 Dangerous goods and special cargo ● Dangerous Goods by Road of 1957 ● Perishable Foodstuffs of 1970 19 The conventions listed in the table have been ratified by Kazakhstan. 32 Regulatory and procedural barriers to trade in Kazakhstan Needs Assessment additional costs, which are difficult to reduce. stan (2010), and the 1998 Law of the Republic of According to the 2012 World Bank Doing Business Kazakhstan on Measures for Protection of Domes- Survey, Kazakhstan ranks 176th in the world (out tic Market from Imports of Goods. of 183 countries) when it comes to trading across The government has also introduced amendments borders. Yet, this low ranking is also the result of to a number of laws in 2009 and 2010, as part of a heavy trade-related procedural and documentary broader effort to comply with the requirements of requirements. The World Bank Business Survey the CU. These amendments have resulted in: shows that it takes up to 76 days to export goods from Kazakhstan at an average cost of USD 3,310 ● Cancelling the requirement for examining per container. Importing goods into the country the origin of goods completely manufac- is also a costly undertaking, which can take up to tured in Kazakhstan;20 62 days at a total cost of $3,290 per container. This ● Limiting the period for issuing a phytosani- compares to an average of 11 days and USD 1,085 tary certificate to 5 working days;21 and, per container in the Organization for Economic ● Excluding the veterinary certificate require- Cooperation and Development region. ment from the list of permits;22 Based on the results emerging from the joint UN- ● Establishing a list of goods subject to vet- ECE business process analysis and the face-to-face erinary and sanitary-epidemiological in- interviews with traders state agencies, transport spection, as per the terms of the Customs operators and logistics service providers, this chap- Union Code. ter highlights key bottlenecks to trade facilitation in In addition, the government is in the process of Kazakhstan and proposes action-oriented recom- implementing a comprehensive customs mod- mendations for the Government’s consideration. ernization effort to ensure compliance with the These bottlenecks stem from the country’s over- Revised Kyoto Convention recommendations for land transport infrastructure (section 3.1), the lo- simplifying and harmonizing customs procedures. gistics sector (section 3.2), customs clearance and Spearheaded by the Customs Control Committee documentary requirements (section 3.3), border (CCC), this effort has involved the introduction of: control (section 3.4) and the existing arrange- ments underpinning the CU between Belarus, ● A modern management information sys- Kazakhstan, and the Russian Federation (section 3.5). tem for generating information on the ar- rival of goods and transit shipments; The analysis brings forward both the potential ● Customs Automated Information System complexity of the clearance process and its doc- (CAIS) for tracking revenues from customs umentation. It also demonstrates that customs fees and trade taxes, monitoring non-tariff clearance is not the only factor undermining trade regulations, and managing declarations; facilitation. The transport of goods, handling, de- ● An automated customs system to enable livery, and processing of payments for releasing traders to download and generate (free of goods are also challenging. charge) electronic customs documents23, 3.1 Customs clearance and documentary 20 The Law “On introducing amendments and addenda to requirements some legislative acts of the Republic of Kazakhstan on the activities of Chambers of Commerce”. The Kazakh customs regime has been the subject 21 The Law “On introducing amendments and addenda to of comprehensive reforms aimed at the consoli- some legislative acts of the Republic of Kazakhstan on dation of a modern system that provides traders issues of phytosanitary security” with transparent, predictable, and speedy clear- 22 The Law “On introducing amendments and addenda to some legislative acts of the Republic of Kazakhstan on ance of goods. All the laws that form the basis of issues of animal health”. Customs regulations have been amended, includ- 23 The term electronic document refers to information ing: the Customs Code of the Republic of Kazakh- structured in electronic formats such as the United Chapter Three — Trade Facilitation 33 including the customs and transit decla- Traders also complained about what they de- rations, which were introduced in 1997 scribed as constantly changing procedures, noted and recently modified to comply with the that procedures are often implemented in a selec- requirements for establishing a Common tive and arbitrary manner, and singled out certain Economic Space with Belarus and the Rus- procedures for being time-consuming. The diffi- sian Federation.24 culties associated with the shifting procedures are ● Risk management system for customs compounded by the lack of reliable up-to-date in- clearance formation on export-import procedures and regu- ● Post-entry point clearance (i.e., after the re- lations. This comes across clearly from the sources lease of the goods). of information reported by the survey respond- ents. While all of the respondents stated that they ● An automated system for generating trade- related statistics. rely heavily on customs, the majority said that they only obtain information upon written requests. ● Linkages with the e-Government portal. They also stated that the published information on At the time of writing this report, preparations the Customs website is sub-optimal both in terms were underway to establish a single window facil- of clarity and level of detail. Customs aside, the ma- ity, with a view to fostering coordination between jority reported heavy reliance on buyers and sup- the different government agencies, cutting down pliers along with freight forwarders, noting that further on red tape and achieving migration to a these sources provide up-to-date information re- paperless environment. garding procedures and regulations in Kazakhstan The results of the UNECE needs assessment sug- and in partner countries. Trade associations and gests that there remains room for further improve- trade promotion agencies, usually a key source ment. Most of the traders reported having to of trade-related information, did not figure in the submit several documents, the number of which respondents’ list of information sources. Moreover, varies depending on the nature of the product several traders noted their dissatisfaction with the and, in some cases, is aggravated by discrepancies services provided by customs brokers, explain- between the Kazakh regulations and those im- ing that these services are expensive and of low plemented in partner countries. Indeed, some re- quality. spondents