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In 2022 and 2023, the Kazakhstani authorities have repeatedly convinced the international community of their alleged commitment to “preventing the use of the Kazakhstani territory to bypass sanctions”. “Appropriate measures” have been adopted (such as the creation of a “list of sanctioned goods”, the signing of a law “on the control of specific goods” and “strengthened control over parallel imports”). However, data presented in this report, which are based on official Kazakhstani foreign trade statistics, show extensive and appalling assistance from the Kazakhstani authorities to Russia in circumventing sanctions.
It is important to emphasize that data on re-exports of sanctioned goods from Kazakhstan to Russia is based on official statistics, i.e., shipments of sanctioned goods are made through customs checkpoints and are approved by the authorities. Kazakhstan’s State Revenue Committee, which acts as a customs control body, controls imports and exports of goods, including to countries that are members of the Eurasian Economic Union. Kazakhstan’s banks, which are under the supervision of the National Bank of the Republic of Kazakhstan and the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market, provide financial services to companies that re-export sanctioned goods to Russia without any restrictions. Therefore, it is the Kazakhstani authorities who are directly responsible for helping Russia in the war against Ukraine.
The export structure of Kazakhstan to Russia underwent significant changes in 2022. Exports of goods subject to sanctions, such as “machinery, equipment, apparatus” increased fivefold, while exports of chemical products increased twofold. After studying foreign trade statistics in detail, the authors of this report draw attention to an abnormal surge in exports from Kazakhstan to Russia of goods used for military purposes:
- In 2022, Kazakhstan exported 11.5 tonnes of gunpowder worth USD 437,000 to Russia, although it did not make any shipments in 2021. At the same time, in 2022, Kazakhstan imported 17.8 tonnes of gunpowder from France, worth USD 381,200. There is reason to believe that Kazakhstani authorities re-exported French gunpowder to Russia.
- Kazakhstan also exported over USD 2.5 million worth of telescopic sights (for weapons) to Russia, which is two and a half times more than in 2021.
- Exports of lasers exceeded USD 52,000. Despite the seemingly insignificant figure for laser exports in 2022, the volume of lasers supplied was over 177 thousand lasers, although in 2021 Kazakhstan supplied 50 lasers to Russia.
- Kazakhstan exported more than USD 2.1 million worth of radar, radio-navigation systems and remote control military equipment to Russia, a 22-fold increase from 2021.
- Deliveries of bearings used in the production of armoured vehicles in 2022 exceeded USD 111 million, almost twice the amount in 2021.
An unusual increase in exports from Kazakhstan to Russia also included dual-use goods:
- Shipments of semiconductor devices from Kazakhstan to Russia reached USD 13.2 million in 2022, 4 times the 2021 figure.
- The sum of exports of integrated circuits from Kazakhstan to Russia exceeded USD 18 million, 74 times the amount of exports for 2021.
As European politicians reported in autumn of 2022, Russia uses electronic components derived from the dismantling of home electronics. Apparently, to this end, the Kazakhstani authorities have boosted shipments of consumer electronics to Russia.
- In 2022, Kazakhstan exported USD 16.1 million worth of cooling and freezing equipment to Russia, 23 times more than in 2021.
- Exports of dishwashers exceeded USD 4 million, 45 times more than in 2021.
- Kazakhstan exported USD 30.9 million worth of washing machines to Russia, 51,600 times more than in 2021.
- The sum of hoover exports from Kazakhstan to Russia was USD 28.8 million. This is 1,386 times more than in 2021.
- Kazakhstan exported USD 193.4 million worth of telephones to Russia in 2022, a 90-fold increase in exports.
The Kazakhstani authorities’ support for Russia goes beyond the supply of sanctioned goods. Due to sanctions against a number of Russian banks, Russians have lost access to international payment systems. Kazakhstan’s Freedom Bank, owned by Russian oligarch Timur Turlov, has enabled Russians to open Mastercard accounts remotely, including through an intermediary represented by the sub-sanctioned Russian bank Tinkoff.
In order to avoid secondary sanctions, the Kazakhstani authorities misinform Ukraine and the West by creating an image of a “potential victim of Russian aggression” by spreading messages about “separatists from Northern Kazakhstan”. Like in 2022, the authorities create the appearance of an imaginary “conflict” between Putin and Tokayev, leading to occasional “blockage of Kazakhstani oil exports through Russian territory”. Such disinformation actions by Kazakhstan’s leadership allow them to deceive democratic countries and avoid secondary sanctions. At the same time, Kazakhstan’s military conducts exercises with Russia, and the authorities allow Russia to test weapons on Kazakhstani territory.
In addition, Tokayev is trying to preventively shift the responsibility for re-exporting sanctioned goods to Russia to private companies. In attempts to justify themselves, the authorities also refer to the “long border” between Kazakhstan and Russia, which is 7,000 km long, and the “lack of customs posts”. The propagandistic rhetoric of Tokayev and his representatives contrasts with practical measures aimed at creating a resilient infrastructure to ensure uninterrupted supplies of sanctioned goods to Russia. These measures include the creation of new large logistics centres in Kazakhstan and the abolition of accompanying consignment notes for goods within Kazakhstan, which makes it impossible to track the movement of goods and their real end-users.
Tokayev’s real, rather than declared, position is reflected in statements by Imangali Tasmagambetov, the Secretary General of the Collective Security Treaty Organization (CSTO) and former Deputy Prime Minister of the Republic of Kazakhstan and Minister of Defense. In February 2023, on behalf of the Kazakhstani authorities, Imangali Tasmagambetov proposed to Russian Minister of Trade and Industry Denis Manturov to start joint arms production and repair within the CSTO member states due to “the geopolitical situation and increasing tensions,” and in March 2023, Imangali Tasmagambetov accused the West of supplying arms to Ukraine, which “negates the prospects to end the conflict through negotiations“. On 11 April 2023, the Russian Ministry of Foreign Affairs actually confirmed the Kazakhstani authorities’ assistance in circumventing sanctions, stating that cooperation between Russia and Kazakhstan was “a guarantee” that the “unprecedented sanctions war” would suffer an “imminent collapse”.
The Kazakhstani authorities continued to supply sanctioned goods to Russia in January-February 2023 (statistics for this period were available at the time of publication). If the current volume of supplies is maintained, the annual export figure for a number of goods, including semiconductors, integrated circuits, washing machines, dishwashers and bearings for armoured vehicles, could surpass the figures for 2022, creating a dangerous trend that forms a resource base for Russia’s military-industrial complex. The Kazakhstani authorities stated that they would allegedly stop parallel imports from 1 April 2023. However, as of 1 April 2023, as from 2022 until the end of March 2023, the Kazakhstani authorities continue re-exporting sanctioned goods to Russia. According to sources of the Open Dialogue Foundation, the Kazakhstani authorities will stop reflecting the export of sanctioned goods to Russia in official foreign trade statistics. This will be done in order to misinform the West and Ukraine and to conceal the facts of the continued supply of banned goods to Russia.
Even on the basis of the above facts, it is clear that attempts by democratic countries to persuade the Kazakhstani authorities to comply with the sanctions through diplomatic negotiations are futile.
Planned or potential trade restrictions or sanctions imposed by the democracies on dummy companies and their nominal owners from Kazakhstan will not have the expected effect, as it is easy to establish new companies and continue supplying sanctioned goods to Russia. The countries from which the Kazakhstani authorities import sanctioned goods for subsequent re-export to Russia include those of the “Global South”, so export restrictions against Kazakhstan will not work.
An illustrative example of the ineffectiveness of sanctions restrictions on dummy companies and their nominee owners is Uzbekistan. On 12 April 2023, the U.S. Department of Commerce imposed sanctions on two Uzbekistan-based dummy corporations, Alfa Beta Creative and GFK Logistic Asia. The U.S. imposed sanctions for “attempting to evade export controls” and “purchasing or attempting to purchase goods of U.S. origin in support of the Russian military and/or defense industrial base”. Alfa Beta Creative is owned by Oleg Grablin and is involved in logistics. In June 2022, another of Oleg Grablin’s companies, Promcomplektlogistic, came under US sanctions for supplying Russia with microchips. Two companies of the same nominal owner fell under US sanctions, but this did not stop the re-export of sanctioned goods to Russia. In dictatorial countries such as Kazakhstan and Uzbekistan, sanctions are required against the beneficiaries of shipments of banned goods. Such beneficiaries are representatives of the authorities and their entourage.
Therefore, instead of counterproductive sanctions against dummy corporations from around the world, secondary sanctions should be imposed on the country’s authorities and their member beneficiaries of sanctions circumvention. It is they who generate additional demand for sanctioned goods for subsequent re-export to Russia.
Kazakhstan, being the second-largest economy of the Eurasian Economic Union (EAEU) and a member of the CSTO, is a major exporter of sanctioned goods to Russia. Kazakhstan’s economy is larger than the combined size of the other Central Asian economies. With multi-billion-dollar financial resources, transport and logistics capabilities and a banking system that is integrated into the international banking system, Kazakhstan is a key enabler for Russia in circumventing sanctions within Central Asia and the EAEU.
The introduction of secondary sanctions against persons who control political power and key financial assets in Kazakhstan would (1) deprive the Kazakhstani authorities of the ability to ship sanctioned goods to Russia; (2) send a clear signal to all countries not only in Central Asia, but also in other regions which re-export banned goods to Russia.
A list of persons recommended for inclusion in the list of personal sanctions:
- TOKAYEV Kassym-Zhomart Kemelevich: born on 17 May 1953, a Kazakhstani politician and diplomat, President of Kazakhstan since 20 March 2019.
- TASMAGAMBETOV Imangali Nurgaliyevich: born on 9 December 1956, a Kazakhstani politician and diplomat, Secretary General of the Collective Security Treaty Organisation (CSTO) since 1 January 2023, as the representative of the Republic of Kazakhstan.
- KULIBAYEV Timur Askarovich: born on 10 September 1966, a Kazakhstani oligarch, son-in-law of former Kazakhstani president Nursultan Nazarbayev.
- VASILENKO Roman Yurievich: born on 14 August 1972, a Kazakhstani diplomat, Deputy Minister of Foreign Affairs of the Republic of Kazakhstan since January 2022.
- Collective Security Treaty Organisation (CSTO): an interstate military alliance in Eurasia consisting of six post-Soviet states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
The reasons for including the above-mentioned persons in the list of personal sanctions are set out in Annex 2.
The report is based on public data, official Kazakhstani foreign trade statistics, insider information and expert assessments. This is the fourth report in a series , ,  on how Tokayev is helping Putin circumvent sanctions.
The Open Dialogue Foundation would like to thank the experts and insiders for their help in writing this report. We also thank Mukhtar Ablyazov, former Minister of Energy, Industry and Trade of Kazakhstan (1998-1999) for his advice.
1. The disinformation rhetoric of the Kazakhstani authorities
Since March 2022, the Kazakhstani authorities have repeatedly assured the international community of their commitment to “comply with sanctions” , . In 2023, the Kazakhstani authorities continued this propaganda rhetoric:
1) On 6 March 2023, Aibek Smadiyarov, an official representative of the Ministry of Foreign Affairs of the Republic of Kazakhstan, said: “As we said before, we have specialists, experts who study all contracts in advance, and Kazakhstan does not intend to give its platform to circumvent sanctions. To date, no Kazakhstani company is subject to secondary sanctions“.
2) On 10 March 2023, Deputy Ministry of Foreign Affairs of the Republic of Kazakhstan Roman Vasilenko said: “We stated a year ago that, on the one hand, Kazakhstan will not support sanctions as an instrument of international policy, but, on the other hand, will not assist in circumventing these sanctions by the use of our territories. At the same time, we have not received any complaints against Kazakhstan from our Western partners on this issue“.
“Kazakhstan has begun to receive goods not only from Europe, but also from countries such as China, India, Vietnam, directly. In addition, there has been an increase in exports from Kazakhstan to Russia, but these are goods that are largely produced in countries that are not part of the sanctions imposed on the Russian Federation by the West”.
Roman Vasylenko added that the authorities allegedly monitor the movement of goods to the end user in order to prevent their use for military purposes.
However, these claims are untrue. Below, in the “Parallel imports” section of the report, there are facts that reflect official statistics and indicate that Kazakhstani authorities re-export goods to Russia, including those produced in countries or by companies from countries that have joined the sanctions.
3) On 13 March 2023, a spokesman for the Kazakhstani Ministry of Foreign Affairs, Aibek Smadiarov, said: “There is a special commission coordinated by the trade ministries of both countries. For example, if a Kazakhstani company plans to negotiate with a Russian company or sign a contract, the same commission will provide preliminary information about the company. Therefore, to date, no company in Kazakhstan has been subjected to sanctions. This is because we are working diligently on this issue. At the moment there is no official communication about sanctions from Europe or the USA“.
4) In his interview with DW and Al Jazeera in early April 2023, Kazakh Deputy Foreign Minister Roman Vasilenko said: 1) that the Kazakhstani authorities have allegedly made clear their respect for Ukraine’s territorial integrity; 2) the authorities are allegedly taking measures to prevent Kazakhstan’s territory from being used to circumvent sanctions; and 3) Kazakhstan and Ukraine have close economic ties.
However, since the beginning of Russia’s large-scale invasion of Ukraine, the Kazakhstani authorities have never voted in favour of Ukraine at the UN. In December 2022, the Kazakhstani authorities voted against a UN resolution demanding the withdrawal of Russian troops from Ukraine. In March 2023, Tokayev signed a law enshrining Crimea as a Russian free economic zone at the state level.
Ukraine needs to deprive the Kazakhstani authorities of the political, logistical and financial tools to help Russia circumvent sanctions. Ukraine has no economic or political obstacles to respond decisively to the destructive actions of the Kazakhstani authorities. The thesis of “close economic ties” between Kazakhstan and Ukraine is refuted by the trade data of the two countries. In 2022, Ukraine’s share in Kazakhstan’s foreign trade was 0.4%, while in 2021 it was 1%.
“Compliance with sanctions“
Since March 2022, the Kazakhstani authorities have taken a series of measures ostensibly aimed at combating the circumvention of sanctions:
- In March 2022, Kazakhstan’s Minister of Trade and Integration Bakhyt Sultanov announced that the authorities had created a unified list of sanctioned goods banned for export to Russia and Belarus.
- In July 2022, Kazakhstan’s Ministry of Finance published a draft order imposing restrictions on the supply of sanctioned goods to Russia.
- In August 2022, the Defence Industry Commission announced a one-year suspension of military exports.
- In December 2022, Tokayev signed a law on the control (import, transit, re-export) of specific (sanctioned) goods.
An example of flattening international criticism for Kazakhstan’s large-scale re-export of sanctioned goods was a March 2023 Financial Times article in which an anonymous Kazakhstani official reported that Kazakhstan would allegedly strengthen controls on the movement of goods from 1 April to prevent it from circumventing sanctions against Russia.
Kazakhstan’s official foreign trade data for 2022 and the first two months of 2023 (January-February 2023 data is available at the time of the report’s publication) refute the Kazakhstani authorities’ “actions” to allegedly comply with the sanctions (the “Parallel Import” section of the report). All these actions are merely a cover for large-scale re-export to Russia of sanctioned goods, including dual-use Western-made goods. Similarly, the deliberate misleading of influential independent Western media should be considered.
According to our sources, from 1 April 2023, as in 2022 and the first months of 2023, Kazakhstani authorities continue to re-export sanctioned goods to Russia. The Kazakhstani authorities plan, following the example of Uzbekistan, to remove this data from the public domain in order to avoid international personal and secondary sanctions.
2. A course for the long-term circumvention of sanctions
In contrast to the empty declarations of the Kazakhstani authorities, they have taken practical measures aimed at creating a long-term infrastructure to ensure the sustainability of the parallel import system.
- On 6 March 2023, Putin had a telephone conversation with Tokayev, during which they discussed “expanding transit and transport routes as well as trade and economic relations”.
- On 15 March 2023, Kazakhstan’s Minister of Trade and Integration and the Akim (Mayor) of Astana officially opened a major logistics centre of Russian online retailer Ozon in Astana, Kazakhstan. The investment amounted to about USD 85 million. Kazakhstan’s Ministry of Trade and Ministry of Finance are preparing amendments to the Customs Regulation Code that would allow foreign retailers (like Russia’s Ozon and Wildberries) to locate goods in customs warehouses and then deliver them throughout Kazakhstan and to other countries, like Russia. An innovation would be the ability to declare goods post-facto.
- On 15 March 2023, it became publicly known that the authorities had abolished accompanying consignment notes for goods due to the fact that this allegedly created a burden on business. In practice, such a measure allows some goods (e.g., microchips) to be imported into Kazakhstan, passed through Kazakhstani customs, and then sent to the end user in Russia without tracking them down. In other words, it will become impossible to trace the actual end user of the imported goods, since the accompanying waybills have been abolished. Thus, the Kazakhstani authorities are trying to mislead the democracies about allegedly stopping parallel imports from 1 April 2023, by in fact abolishing the documents that allow tracking parallel imports.
- In March 2023, the Eurasian Economic Commission (the executive body of the EAEU) extended the increased duty-free threshold for citizens. Until 18 March 2022, the threshold was EUR 200. On 18 March 2022, following the introduction of Western sanctions against Russia, the Eurasian Economic Commission increased the threshold to EUR 1,000 (5 times and up to 31 kg) in order to facilitate parallel imports.
“Extending the measure will help support citizens under sanctions pressure and avoid shortages of essential and critical imports,” the Eurasian Economic Commission said in September 2022.
- On 11 April 2023, Kazakhstani Foreign Minister Murat Nurtleu made his first official foreign visit to Moscow, where he met with Russian Foreign Minister Sergei Lavrov and Yuri Ushakov, presidential aide on international affairs. Following the meeting, Murat Nurtleu said: “Russia is our reliable ally and a key economic partner in the Eurasian region, so it was very important for me to make my first foreign visit specifically to Moscow as Kazakhstan’s foreign minister. We agreed that there is great potential and groundwork for the further development of Kazakhstan-Russia cooperation. In a constructive manner, we also checked notes on most items on the regional and international agenda”.
The statement of the Minister of Foreign Affairs of the Republic of Kazakhstan is not mere formal rhetoric but is backed up by practical measures taken by the Kazakhstani authorities to support Russia.
- Even before the meeting of the two countries’ foreign ministers, the Russian Foreign Ministry made a statement in which it confirmed the course for the formation of a basis for long-term circumvention of sanctions through Kazakhstan: “Russia appreciates the level of interaction with Kazakhstan within the EAEU. The Russian-Kazakhstani strategic partnership and alliance are one of the main “engines” of Eurasian integration. They are a pledge that the unprecedented sanctions war unleashed by the “collective West” against Russia and Belarus, the attempts of Westerners to hinder cooperation between the countries of our Union, will fail inevitably. Moscow counts on Astana’s active participation in the work of the association during the Russian presidency”.
Russia openly demonstrates that in the face of sanctions, Kazakhstan plays and will continue to play a key role as the “locomotive” of the Eurasian Economic Union to circumvent sanctions against Russia in order to achieve the “imminent collapse” of democratic countries’ sanctions policies.
3. Parallel import
Since the start of Russia’s full-scale military invasion of Ukraine, Kazakhstan has become a key transport and logistics hub for circumventing sanctions in the EAEU. As the second largest economy in the EAEU and by successfully avoiding secondary sanctions through disinformation operations in the West and Ukraine, Kazakhstan under the Nazarbayev-Tokayev regime has created a solid rear base for the Russian economy and military machine. By controlling the banking sector, customs authorities, railways and freight transport, the Kazakhstani authorities actively assist Russia in circumventing international sanctions. Such actions by the regime reduce the effectiveness of sanctions against Russia and allow it to wage a prolonged war of aggression against Ukraine. Exports of goods from Kazakhstan to Russia have undergone significant changes in 2022. The abnormal growth in the export of goods affected the category of goods used for military purposes.
Exports of goods falling into the category of “machinery, equipment, vehicles, instruments and apparatus,” which include sanctioned goods such as semiconductors, microchips and others, increased fivefold in 2022 compared to 2021, reaching USD 2.1 billion. For January-February 2023, exports of this category of goods were USD 419 million, slightly lower than the entire 2021 figure (USD 471 million).
Russia especially needs this category of goods because it is essential for the functioning of the Russian military-industrial complex, in particular for the production and repair of various types of weapons.
Abnormal growth in exports is also recorded in the category of chemical and related products, including rubbers and plastics – goods under EU embargo. Exports of chemicals and related industries doubled from USD 935 million in 2021 to USD 1.95 billion in 2022. For January-February 2023, exports of this category of goods amounted to USD 451 million, only half as much as for the whole of 2021.
In 2022, Kazakhstan exported 11.5 tonnes of gunpowder worth USD 437,000 to Russia, although it did not make any shipments in 2021. At the same time, in 2022, Kazakhstan imported 17.8 tonnes of gunpowder from France, worth USD 381,200. There is reason to believe that Kazakhstani authorities re-exported French gunpowder to Russia.
Exports of telescopic sights (for weapons)
In 2022, Kazakhstan also exported more than USD 2.5 million worth of telescopic sights to Russia, two and a half times higher than in 2021. In turn, Kazakhstan imported telescopic sights from China, the United States, Austria, Japan, Israel, Bulgaria, the Philippines and Sweden in 2022 (Annex 3: Table 1).
What draws particular attention is the abnormal growth of sights imports from Sweden (+ 18,125%), Austria (+ 1,518%), USA (+ 937%), Israel (+ 591%) and Japan (+ 232%). Sight exports from Kazakhstan to Russia in January-February 2023 amounted to $310 thousand.
Exports of lasers
Exports of lasers from Kazakhstan to Russia in 2022 exceeded USD 52,000. Despite the seemingly insignificant amount of laser exports in 2022, the volume of lasers supplied was more than 177,000 lasers.
By comparison, Kazakhstan supplied 50 lasers to Russia in 2021, 0 in 2020, and 5,880 lasers in 2019. In the first two months of 2023 alone, the number of lasers exported was 9,003, which is more than the total number of lasers exported for 2019-2021.
In 2022, Kazakhstan imported lasers from Germany, Turkey, USA, UK and China. Imports of lasers from Germany (+ 621%) showed the largest increase compared to 2021.
Exports of radar, radio-navigation systems and remote control military equipment
In 2022, Kazakhstan exported radar, radio-navigation systems and remote control military equipment to Russia for more than USD 2.1 million, 22 times more than in 2021. In January-February 2023 alone, the amount of products in this category was more than USD 320,000, or three times more than in 2021.
Radar, radio-navigation systems and remote control military equipment is used for military purposes in air defence systems, combat aircraft and ships.
The geography of imports includes EU countries (France, Germany, Denmark, Italy, Lithuania), USA, Australia, China, Taiwan, Mexico and South Africa (Annex 3, Table 2). The largest growth compared to 2021 was in imports from Denmark (from USD 0 to USD 3 million), Lithuania (+ 2,070%), Germany (+ 458%), Taiwan (+ 448%), Australia (+ 432%), USA (+ 243%) and China (+ 210%).
In early April 2023, residents in at least two regions of Kazakhstan noticed the movement of military equipment through Kazakhstan:
- On 6 April 2023, a convoy of trucks drove military equipment along the Karaganda (Kazakhstan) – Kemerovo (Russia) route.
- A second convoy of trucks carrying military equipment was traveling along the road towards the city of Pavlodar, Kazakhstan, towards the city of Omsk, Russia , .
The Kazakhstani authorities tried to deny information about deliveries of military equipment to Russia. The Kazakhstani Ministry of Defense said that in the first case, the military equipment was sent “from routine combat training,” and in the second case, the military equipment was transported for “routine repairs” , . The Ministry of Defense recalled that since 27 August 2022, Kazakhstan has banned the export of military weapons and equipment. The Kazakhstani authorities also make statements about “compliance with sanctions” and allegedly “stopping parallel imports,” while openly supplying Russia with gunpowder, lasers, telescopic sights, radar, radio-navigation systems and remote control military equipment used by Russia for military purposes against Ukraine.
Therefore, there is every reason to believe that the Kazakhstani authorities are also supplying Russia with military equipment. The U.S. and other democracies can verify the movement of military equipment (including in disassembled condition and in the form of spare parts) through Kazakhstan at Russia’s direction.
4. Consumer electronics re-export
In addition to shipments of dual-use goods, Kazakhstan has dramatically increased re-exports to Russia of telephones and consumer electronics, including washing machines, dishwashers, hoovers, refrigerators and freezers. In October 2022, European politicians expressed concern over Russia’s use of components and semiconductors from the dismantling of consumer electronics, including refrigerators, dishwashers and washing machines. The EU has noted an increase in exports of dual-use goods to Russia’s neighbouring countries following the imposition of sanctions on Russia. Statistics from Kazakhstan show an unusual increase in re-exports of this category of goods to Russia, indicating a state-established supply chain of consumer electronics to Russia.
Exports of cooling and freezing equipment
Kazakhstan exported USD 16.1 million worth of cooling and freezing equipment to Russia in 2022, 23 times more than in 2021 (USD 697,000). In the first two months of 2023, exports amounted to USD 2.6 million, which is 3 times more than the total amount for 2019-2021.
In 2022, Kazakhstan imported cooling and freezing equipment from Lithuania (+ 17,900% compared to 2021), the Netherlands (+ 3,615%), Germany (+ 223%) and Turkey (+ 216%). A more complete list is presented in Table 3 (Annex 3).
Exports of dishwashers
Kazakhstan supplied USD 4.2 million worth of dishwashers to Russia in 2022, 45 times more than in 2021 (USD 92,700). In January-February 2023, exports amounted to USD 2.4 million.
The largest increase in imports of dishwashers to Kazakhstan in 2022 compared to 2021 came from Sweden (+ 52,171%), South Korea (+ 7,911%), USA (+ 969%) and Poland (+ 340%).
Exports of washing machines
Kazakhstan exported USD 30.9 million worth of washing machines to Russia in 2022, 51,600 times more than in 2021 (USD 600). In January-February 2023, exports amounted to USD 7.7 million.
The countries that have shown the highest growth in washing machine exports to Kazakhstan compared to 2021 are Uzbekistan (from USD 0 to USD 5.6m), China (+ 398%), Germany (+ 277%) and Turkey (+ 217%).
Exports of hoovers
In 2022, the amount of hoover exports from Kazakhstan to Russia was USD 28.8 million. This is 1,386 times more than in 2021 (20,800 dollars). The anomalous export of hoovers continued in 2023. In January-February 2023, exports totalled USD 3.4 million. The largest imports of hoovers to Kazakhstan in 2022 came from Poland (+ 177%), USA (+ 173%), Turkey (+ 147%) and Germany (+ 139%).
Exports of smartphones
Kazakhstan exported USD 193.4 million worth of telephones to Russia in 2022, increasing exports by 9,020% (90 times) compared to 2021. In January-February 2023 alone, exports of smartphones to Russia amounted to USD 19.1 million, a 71% increase over exports for all of 2019-2021.
The largest exporters of telephones to Kazakhstan in 2022 were China, India and Vietnam. However, the largest increase in smartphones exports to Kazakhstan in 2022 compared to 2021 was from South Korea (+ 1,593%), Estonia (+ 1,355%), Finland (+ 371%), Latvia (+ 358%), Germany (+ 336%) and the USA (+ 196%).
5. Export of dual-use goods
Exports of printed circuit diagrams
In 2022 Kazakhstan re-exported USD 795,000 worth of printed circuits to Russia, which is 2 times more than the amount for 2021 (USD 383,000).
The largest growth in exports of printed circuits to Kazakhstan in 2022 was shown by: China (+ 236%), UK (+ 172%) and Italy (+ 140%). Kazakhstan also imported printed circuits from Germany, USA, South Korea and Japan (Table 8 in Annex 3).
Exports of semiconductor devices
Semiconductor shipments from Kazakhstan to Russia reached USD 13.2 million in 2022, four times higher than in 2021 (USD 3.4 million). For January-February 2023 semiconductor exports to Russia reached USD 3.3 million, which is similar to the entire exports for 2021. If the current trend continues, exports for 2023 could exceed those for 2022.
The largest semiconductor supplier to Kazakhstan in 2022 was China. However, the largest growth in supplies to Kazakhstan in 2022 was shown by: Taiwan (+ 2,795%), Philippines (+ 2,236%), Mexico (+ 1,461%), Malaysia (+ 1,375%), Germany (+ 765%), Japan (+ 752%) and USA (+ 371%).
Exports of integrated circuits
The amount of exports of integrated circuits from Kazakhstan to Russia exceeded USD 18 million, which is 74 times more than the amount of exports for 2021 (USD 246,000). In the first two months of 2023, exports amounted to USD 4.6 million, which is 6 times higher than the total for 2019-2021. If the current trend continues, the figure for 2023 could exceed exports for 2022.
The largest exporters of integrated circuits to Kazakhstan in 2022 were China, Vietnam, South Korea, Taiwan, USA and Malaysia (Table 9 in Annex 3). The countries that showed the largest growth in exports of integrated circuits to Kazakhstan in 2022 are: South Korea (+ 1,349%), Japan (+ 1,993%), Thailand (+ 729%), Malaysia (+ 476%) and China (+ 401%).
The United Arab Emirates, which did not supply integrated circuits in 2021, exported USD 360,000 worth of integrated circuits to Kazakhstan in 2022, indicating their subsequent re-export from Kazakhstan to Russia.
According to an August 2022 report by the Royal United Services Institute (RUSI), Russia uses electronic components manufactured by US, EU and Asian companies for military purposes to produce cruise missiles, operational tactical missile systems, air and missile defence systems, tanks, digital radios, unmanned aerial vehicles, etc , .
As one of the authors of the report, namely Dr. Jack Watling, commented to Reuters: “Russian weapons that are critically dependent upon Western electronics have resulted in the deaths of thousands of Ukrainians”.
Data on re-exports of dual-use goods and consumer electronics suggest the following conclusions:
- The Kazakhstani authorities are purposefully re-exporting electronic components needed for Russia’s military-industrial complex to Russia, helping to circumvent sanctions. The sharp increase and continued unimpeded supply of dual-use goods to Russia indicate the systemic nature of parallel imports – Kazakhstani regulators, banks, transporters, and oligarchs act with the approval and coordination of Kazakhstani authorities.
- Despite numerous statements by the Kazakhstani authorities about “complying with sanctions”, all through 2022 and even into 2023, they continue to supply foreign-made electronic components to Russia in circumvention of sanctions, confirming calls by civil society and the Kazakhstani opposition for secondary sanctions to be imposed on Kazakhstani individuals and entities who share responsibility, along with Russian officials and military personnel, for seizing Ukrainian territories, destroying civil infrastructure and killing thousands of Ukrainians.
- Planned or potential trade restrictions or sanctions by democratic countries against shell companies and their nominal owners from Kazakhstan will not have the expected effect.
– The countries from which the Kazakhstani authorities import sanctioned goods and then re-export them to Russia include those of the “Global South”, so export restrictions on Kazakhstan will not work.
– Nor will sanctions against shell companies be successful, as the authorities are free to create new companies and continue supplying sanctioned goods to Russia. An illustrative example of the ineffectiveness of sanctions restrictions against shell companies and their nominal owners is Uzbekistan.
– On 12 April 2023, the U.S. Department of Commerce imposed sanctions on two Uzbekistan-based shell companies, Alfa Beta Creative and GFK Logistic Asia. The U.S. imposed sanctions for “attempting to evade export controls” and “purchasing or attempting to purchase goods of U.S. origin in support of the Russian military and/or defense industrial base. Alfa Beta Creative is owned by Oleg Grablin and is engaged in logistics. In June 2022, another of Oleg Grablin’s companies, Promcomplektlogistic, came under U.S. sanctions for supplying Russia with microchips. Two companies of the same nominal owner fell under US sanctions, but this did not stop the re-export of sanctioned goods to Russia. In dictatorial countries such as Kazakhstan and Uzbekistan, sanctions are required against the beneficiaries of shipments of banned goods. Such beneficiaries are representatives of the authorities and their entourage.
Since it is the authorities who have organised and encouraged the re-export of sanctioned goods, sanctions should be imposed on key individuals within Kazakhstan’s political and business elite to paralyse the entire sanctions circumvention infrastructure in Kazakhstan
6. Components for armoured vehicles
Shipments of bearings from Kazakhstan to Russia exceeded USD 111 million in 2022, almost double the 2021 figure (USD 57 million). In January-February 2023, exports of bearings to Russia amounted to USD 22.7 million. If the current volume of shipments is maintained, the export figure for 2023 may exceed the export amount for 2022.
The largest suppliers of bearings to Kazakhstan in 2022 were China, USA, Germany and Malaysia. Sharp increases in bearing imports to Kazakhstan in 2022 came from: Estonia (from USD 0 to USD 3.4 million), Malaysia (+ 753%), Japan (+ 467%), Italy (+ 389%), China (+ 312%), Germany (+ 184%) and USA (+ 162%).
According to a report by the Washington-based Center for Strategic and International Studies, “Bearings are critical to producing any type of moving vehicle”, including tanks, aircraft, submarines and trains. Until 2022, Russia purchased most of its high-quality bearings from Western manufacturers. The report suggests that Russia could maintain its level of armaments production by replacing Western bearings with their Asian equivalents. Statistics from Kazakhstan indicate that Kazakhstani authorities have sharply increased imports of bearings from the West and Asia and re-exported to Russia to support Russia’s military-industrial complex.
7. Vehicles and vehicle spare parts
Passenger car exports from Kazakhstan to Russia amounted to USD 61.6 million, an increase of 23% compared to 2021. Despite the seemingly insignificant increase, it is important to note the January-February 2023 shipments, which exceeded USD 26 million.
At the current rate of supply, passenger car exports in 2023 may exceed the 2022 figure by one and a half to two times. The largest passenger car exporters to Kazakhstan in 2022 were Japan, Germany, China, South Korea and Thailand (Table 11 in Annex 3). The largest increases in exports to Kazakhstan in 2022 were shown by: Italy (+ 5,929%), China (+ 4,254 %), Great Britain (+ 2,203 %), Thailand (+ 1,366 %), Indonesia (+ 1,141 %), Germany (+ 575 %) and Slovakia (+ 487 %).
Exports of motor vehicle parts and accessories from Kazakhstan to Russia showed an almost four-fold increase in 2022, from USD 9.8 million in 2021 to USD 37.6 million in 2022. In the first two months of 2023, the figure was USD 10.6 million, slightly more than for all of 2021.
The key suppliers of motor vehicle parts and accessories to Kazakhstan in 2022 were South Korea and China (Table 12 in Annex 3).
A number of countries showed significant growth in exports to Kazakhstan, including the Czech Republic (+ 1,090%), Canada (+ 460%), Turkey (+ 191%) and Japan (+ 191%).
8. Supplies of sanctioned goods to Belarus
In addition to re-exporting sanctioned goods to Russia, Kazakhstani authorities sharply increased supplies of sanctioned goods to Belarus in 2022. Belarus has undertaken repairs of Russian military equipment damaged in the war, as well as equipment removed from storage in Russia , . There is reason to believe that the sharp rise in the export of sanctioned goods from Kazakhstan to Belarus is related to the need to repair Russian military equipment. According to Kazakhstan’s official statistics, in 2022, exports of semiconductors increased fivefold, exports of integrated circuits increased by 6,460 times, exports of radar, radio-navigation systems and remote control military equipment increased 22 times, and exports of lasers rose from zero to USD 30,000.
This indicates that EAEU and CSTO members such as Russia, Belarus and Kazakhstan are mutually supportive: Russia helped the regimes of Belarus and Kazakhstan to retain power during recent mass protests, Belarus provides its territory for attacks against Ukraine and repairs Russian military equipment, and the Nazarbayev-Tokayev regime in Kazakhstan provides large-scale supplies of sanctioned goods with impunity. But unlike the Russian and Belarusian authorities, the Kazakhstani authorities have so far avoided being hit by sanctions. That said, the destructive role of the Kazakhstani authorities in Russia’s war against Ukraine is no less significant than that of Belarus.
|Exports from Kazakhstan to Belarus (2021–2022)||2021||2022|
|Lasers||0||USD 30,000 (50 pieces)|
|Cooling and freezing equipment||0||USD 1.6 million|
|Washing machines||0||USD 2.2 million|
|Smartphones||USD 253 000||USD 47 million|
|Radar, radio-navigation systems and remote control military equipment||USD 17 000||USD 371,000|
|Semiconductor devices||USD 511 000||USD 2.6 million|
|Integrated circuits||USD 100||USD 646,000|
9. Help within the banking sector
Russia’s Mir payment system in Kazakhstan
On 13 March 2023, VTB, a subsidiary of Russia’s VTBBank in Kazakhstan, announced that it had begun issuing plastic cards with the Russian Mir payment system. In fact, VTB Bank is a state-owned bank. The bank is 60% owned by the Russian Federal Agency for State Property Management. In February and April 2022, VTB Bank came under US and EU sanctions respectively , .
In September 2022, the US Treasury Department warned countries continuing to work with Russia’s Mir payment system of potential sanctions, as such actions expand the use of the national payment system Mir outside of Russia. Thanks to the lobbying efforts of the Kazakhstani authorities, in December 2022, the US eased restrictions on the use of Russia’s Mir payment system in Kazakhstan, allowing Kazakhstani banks to use the Mir system. Although the Mir system was only authorised for Russian citizens in Kazakhstan, Russian citizens were given free access to international financial transactions through banks in Kazakhstan.
Russian oligarch Timur Turlov tries to have his name removed from Ukraine’s sanctions list
Russian oligarch Timur Turlov, who fell under Ukrainian sanctions in October 2022, is trying to have his name removed from Ukraine’s sanctions list while continuing his activities aimed at helping Russia circumvent sanctions. Timur Turlov is the founder and majority shareholder of investment company Freedom Holding. In February 2023, the Central Bank of Russia allowed Timur Turlov to sell his Russian assets to Maxim Povalishin, a member of Freedom Finance’s board of directors, for USD 49 million. In fact, Timur Turlov has transferred his assets to a nominee.
Timur Turlov’s Freedom Bank is assisting Russia’s sub-sanctioned Tinkoff Bank in opening Mastercard accounts remotely for Russians. Freedom Bank quickly denied this, saying that opening accounts for non-residents of Kazakhstan is only possible if they are present in person at the bank’s branches in Kazakhstan. On 15 March 2023, the deputy head of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market stated that the authorities could not prohibit Freedom Bank from providing such services without denying or confirming the information on remote issuance of bank cards to Russians at Freedom Bank. In fact, the Kazakhstani authorities have shifted responsibility to Freedom Bank, although the National Bank and the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market are under Tokayev’s control. Accordingly, Freedom Bank carried out such activities with the consent and support of the Kazakhstani authorities.
10. Help for Russia is Tokayev’s direct responsibility
Aware of the risk of secondary sanctions, the Kazakhstani authorities have pursued a preventive disinformation campaign aimed at shifting the responsibility for circumventing the sanctions to private businesses. In March 2023, the Kazakhstani publication LS published a report referring to the Kazakhstani Ministry of Trade “warning” private companies about the risks of secondary sanctions for re-exporting sanctioned goods to Russia. By doing so, the authorities publicly shift the responsibility for circumventing sanctions to private businesses, even though it is the authorities who are responsible for the supply of sanctioned goods.
Following a meeting with the US Secretary of State on 28 February 2023, Kazakhstan’s foreign minister said it was “difficult for Kazakhstan to manage free trade processes” because Kazakhstan is a member of the EAEU and “has no customs borders” with Russia and other EAEU countries.
On 1 April 2023, Kazakhstani Prime Minister Alikhan Smailov instructed “authorised state bodies to keep the situation under control, respond promptly to violations, and conduct extensive outreach to business representatives”, demonstrating that the Kazakhstani authorities were allegedly working with private businesses to “comply with sanctions“.
Such rhetoric by the Kazakhstani authorities does not correspond to reality, as:
- Despite its membership in the EAEU, the State Revenue Committee of Kazakhstan controls import and export of goods, including from and to EAEU countries. According to Kazakhstan’s tax legislation, a zero value-added tax (VAT) rate applies when exporting goods from Kazakhstan to another EAEU member state [Article 446 of the Tax Code of Kazakhstan – edit. note]. For example, a company registered in Kazakhstan purchased microchips and semiconductors in South Korea or the US, imported them to Kazakhstan and then re-exported to Russia. In order to avoid paying VAT in Kazakhstan, such a company must provide documents confirming the export of a particular product (e.g. microchips) – a contract or copies of shipping documents confirming the export of goods from Kazakhstan to Russia or another EAEU member country [Article 447 of the Tax Code of Kazakhstan – edit. note]. Only then will companies be refunded the amount of value added tax previously paid.
- The Kazakhstani banks service contracts of companies re-exporting sanctioned goods to Russia. The National Bank of Kazakhstan and the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market supervise the activities of second-tier banks. When entering into transactions for sanctioned goods, banks should have rejected these types of transactions, but this is not the case. Accordingly, the circumvention of the sanctions is carried out with the consent of the Kazakhstani authorities.
- Shipments of sanctioned goods are made through customs checkpoints and are officially reflected in Kazakhstan’s foreign trade statistics. As a state body subordinate to the government of Kazakhstan, the State Revenue Committee allows the re-export of sanctioned goods to Russia.
11. Tokayev recognised Crimea as Russian territory
On 15 March 2023 Tokayev signed a law ratifying a protocol amending the Eurasian Economic Union treaty, which allows for equal terms of levying of value-added tax in Russia’s free economic zones (FEZ) for goods from Kazakhstan and other Eurasian Economic Union countries, as well as from third countries. On 2 March 2023, Kazakhstan’s Minister of Finance explained that these free economic zones in Russia include Crimea, Magadan and Kaliningrad.
With his signature, Tokayev legally recognised Crimea’s annexation and its functioning as a free economic zone of Russia, as well as the conduct of economic activities in Crimea in accordance with Russian laws and the rules of the Eurasian Economic Union.
In March 2023, the authors of this report discovered on the website of Kazakhstan’s Bureau of National Statistics, in the foreign trade section, a directory of EAEU territories, published on 1 September 2015. The directory of EAEU territories lists Russia’s territories according to OKATO (Russian Classification on Objects of Administrative Division). Paragraphs 12 and 20 specify annexed Crimea and Sevastopol as Russian territories. Accordingly, the Kazakhstani authorities identified Kazakhstan’s trade with Crimea and Sevastopol as Russian territory.
12. Kazakhstani authorities are financing the war against Ukraine
On 3 April 2023, Tokayev ratified an agreement with Russia to buy part of Russia’s stake in the Eurasian Development Bank. The Kazakhstani authorities will pay USD 65 million to Russia’s budget, which finances the war against Ukraine. This will also preventively save the key investment bank of the Eurasian Economic Union from potential sanctions, as formally the Russian share will be reduced from 66% to 45%, but Russia will retain control of the bank as the largest shareholder.
It is therefore Tokayev, not private business, who is directly responsible for complicity in the war against Ukraine on Russia’s side, helping to supply Russia with sanctioned goods to bypass sanctions, financing the war and securing at state level Crimea’s status as a Russian free economic zone.
13. Military cooperation
Kazakhstan is a member of the CSTO together with Russia, Belarus, Kyrgyzstan, Armenia and Tajikistan. Imangali Tasmagambetov, Kazakhstan’s former prime minister and defence minister, is the secretary general of the CSTO. On 31 March 2023, Imangali Tasmagambetov said the fact that the West supplies weapons to Ukraine “nullifies the prospects of ending the conflict through negotiations,” effectively accusing the democratic countries of “prolonging the war” through supporting Ukraine’s efforts to defend its independence, sovereignty and territorial integrity. Supporting Russian military propaganda on behalf of Kazakhstani authorities, Tasmagambetov added that “there is an unprecedented build-up of NATO military capabilities in the Baltic States, Poland and the Black Sea region”, thus advancing the Kremlin’s rhetoric of “threats” from NATO , , . Such statements by Imangali Tasmagambetov reflect the real position of the Kazakhstani authorities, who assist Russia in circumventing sanctions despite its declared support for Ukraine’s territorial integrity.
On 28 February 2023, on the day of the U.S. Secretary of State’s visit to Kazakhstan, Imangali Tasmagambetov met with Russian Deputy Prime Minister and Minister of Trade and Industry and Chairman of the CSTO Interstate Commission on Military-Economic Cooperation Denis Manturov. On behalf of the Kazakhstani authorities, Imangali Tasmagambetov proposed “to implement practical measures for cooperation between military-industrial complex enterprises of CSTO member states for joint development and production of weapons and military equipment, establishment of maintenance and repair service centres in connection with the geopolitical situation and increasing tensions”. On 5 April 2023, Tokayev met with Imangali Tasmagambetov, but did not voice his disagreement with Tasmagambetov’s statements, nor did representatives of the Kazakhstani Ministry of Foreign Affairs do so. Accordingly, Imangali Tasmagambetov’s statements reflect the real, rather than the declared, position of the Kazakhstani authorities.
Kazakhstan conducts military exercises with Russia on a bilateral basis, within the framework of the CSTO and the Commonwealth of Independent States (CIS). On 12 April 2023, the defence ministries of the Commonwealth of Independent States (CIS), including Kazakhstan and Russia, discussed plans to conduct military exercises within the CIS aimed at training joint air defence system troops.
A set of CSTO exercises are planned for 2023 “in the form of the joint operational and strategic exercise ‘Combat Brotherhood’, which is the highest form of joint training in the format of the Organisation”.
On 11 April 2023, Russia conducted a test launch of an intercontinental ballistic missile from the Kapustin Yar test site in Russia. The Kazakh Ministry of Defence stated that “the launch was carried out as planned in coordination with the Kazakhstani side. The missile is solid-propellant in content and does not carry a warhead. The purpose of the launch was to assess the missile’s trajectory. In the course of the work, safety precautions were observed. There is no threat to the population of Kazakhstan or the environment”.
The missile struck a simulated target at the Sary Shagan test site in Kazakhstan. Although the missile could be launched at a conditional target on Russian territory, the missile was launched at a conditional target at a test site in Kazakhstan. Thus, the Russian authorities openly demonstrated that the Kazakhstani authorities are in vassal dependence on Russia. The Kazakhstani authorities help Russia in testing new types of weapons, which can later be used in a war against Ukraine.
14. Reaction from the West and Ukraine
The Kazakhstani authorities have abused the trust of democracies to avoid public criticism and secondary sanctions, and to continue supporting Russia. It is regrettable that only a year after Russia’s full-scale invasion of Ukraine, democratic countries have only just started paying active attention to the actions of the Kazakhstani authorities which undermine the sanctions regime against Russia. However, the ongoing and planned actions by the US and the European Union against Kazakhstan are, in the opinion of our experts and insiders, counterproductive. It can be stated that attempts by democratic countries to persuade the authorities of Kazakhstan to comply with the sanctions through diplomatic negotiations will not be successful.
In March 2023, the British newspaper The Telegraph reported that “European capitals are discussing plans to impose trade sanctions on Russia’s neighbours to help it circumvent punitive measures”. According to the plan, the EU will first try to resolve the issue with the Central Asian states through diplomatic negotiations. The EU’s approach is supported by the words of the EU ambassador to Kazakhstan: “We hope that countries, including Kazakhstan, will solve potential problems with circumventing sanctions through cooperation. In the event that this cooperation does not yield the expected results, we will be forced to look for other ways to limit the export of sanctioned goods to countries from which they enter the markets of Russia and Belarus unhindered.“
In April 2023, the EU ambassador to Kazakhstan announced a visit to Kazakhstan by the EU special representative for sanctions on 24-25 April 2023. The EU special representative visited Kyrgyzstan in March 2023, where he called on countries that did not support sanctions against Russia not to be a tool for sanctions circumvention.
The US is taking a similar approach. From 23-28 April 2023, the US Assistant Secretary of the Treasury will visit Kazakhstan and Kyrgyzstan to meet with government and business representatives. The message that the US Treasury Department official is going to present during her trip to Central Asia is that countries should decide whether to continue providing material support to Russia or to continue doing business with countries representing 50% of the global economy. Commenting on the visit of U.S. government representatives to Kazakhstan, Aibek Smadiyar, official representative of the Kazakhstani Ministry of Foreign Affairs, said: “We have constant consultations on sanctions, both with the U.S. and with EU countries. American experts, specialists advise our companies so that they do not fall under sanctions”.
During his visit to Kazakhstan on 18 March 2023, the British Foreign Secretary said that the UK “appreciates Kazakhstan’s continued and principled support for the territorial integrity of Ukraine”. On 20 March 2023 the UK Foreign, Commonwealth and Development Office said in its response to the Open Dialogue Foundation: “The UK is committed to ensuring that third countries are not used by Russia to evade sanctions. We regularly underline our support for Kazakhstan’s compliance with international sanctions and welcome remarks made by Kazakh Government officials regarding their stance against circumvention” [Open Dialogue Foundation’s communication with the UK Foreign Office – edit. note].
However, the figures in this report, as in previous ones, show that the Kazakhstani authorities are openly helping Russia to circumvent sanctions , , . On 30 March 2023 Professor Lord Alton wrote to the UK Foreign, Commonwealth and Development Office to enquire about their position on the facts set out in previous Open Dialogue Foundation reports. On 13 April 2023 the UK Secretary of State for European Affairs at the Foreign, Commonwealth and Development Office wrote back to Lord Alton to say that the evidence in the Open Dialogue Foundation’s report had been passed to the Central Asian Department. It is regrettable that the authorities in the democratic countries and Ukraine are leaving the Kazakhstani authorities’ provision of large-scale support for Russia’s war against Ukraine without a strong response. We expect the UK authorities to reconsider their position based on the facts and recommendations presented in this report.
Some representatives of the Ukrainian authorities, like deputies Serhiy Nagornyak and Oleksiy Honcharenko, thank Kazakhstan and commend the Kazakhstani authorities’ statements “on compliance with sanctions“. In mid-April 2023, the Kazakhstani embassy in Kyiv organised a round table entitled “The New Kazakhstan – on the Road to Reforms“. The round table was attended by members of the Ukrainian parliament, Serhiy Nagornyak and Andriy Gerus, as well as Viktor Korol, vice-president of the Ukrainian Chamber of Commerce and Industry, and Ukrainian political scientists.
At the end of the meeting the Embassy of Kazakhstan in Ukraine noted that, “Ukrainian experts praised the political transformations in Kazakhstan, in particular the efforts of President Kassym-Jomart Tokayev to develop political and socio-economic processes in the country. People’s deputies of the Verkhovna Rada expressed gratitude for the humanitarian aid provided and called on Kazakh business to take an active part in the reconstruction of Ukraine“.
Ukraine needs to deprive the Kazakhstani authorities of the political, logistical and financial tools to help Russia circumvent sanctions. Ukraine has no economic or political obstacles to respond decisively to the destructive actions of the Kazakhstani authorities. The thesis of “close economic ties” between Kazakhstan and Ukraine is refuted by the trade data of the two countries. In 2022, Ukraine’s share in Kazakhstan’s foreign trade was 0.4%, while in 2021 it was 1%.
Apart from the fact that Tokayev’s “political reforms” are only aimed at maintaining an authoritarian regime and suppressing rights and freedoms, the destruction of Ukrainian cities and the deaths of citizens is due to the Kazakhstani authorities supplying components for missiles and other weapons. Questions arise for Ukrainian MPs like Serhiy Nagornyak and Oleksiy Honcharenko, who thank the Kazakhstani authorities, which in fact help Russia take over Ukraine.
15. Kazakhstani civil society supports Ukraine
Despite political persecution, independent civil activists regularly express their solidarity with Ukraine, expose the Kazakhstani authorities for helping Russia circumvent sanctions, and call on the US, EU, UK and Canada to impose sanctions on the Kazakhstani authorities for helping Russia in its war against Ukraine , .
The Kazakhstani authorities politically persecute civil society activists for supporting Ukraine. On 16 March 2023, a police officer came to the home of human rights activist Nurgul Kaluova and demanded that she accompany him to the Police Department in connection with reposting a publication in support of Ukraine. Nurgul Kaluova was arrested for five days.
Disinformation operations to evade personal and secondary sanctions
Alleged tension between Russia and Kazakhstan
As in 2022, Putin and Tokayev are imitating “tension” in order to divert international attention from the facts of Kazakhstan’s assistance to Russia in circumventing sanctions. On 7 March 2023, it became publicly known that Kazakhstan had “seized” the property of the Russian state corporation Roskosmos in Kazakhstan under a court order dating back to late November 2022. “Seizure” of Roskosmos assets followed a few days after the publication in Bloomberg of 4 March 2023 of an increase in supplies of microchips and semiconductors from Kazakhstan to Russia in 2022.
On 13 April 2023, Kazakhstani pro-governmental media reported that the transportation of Kazakhstani oil through the Caspian Pipeline Consortium (CPC) marine terminal in Novorossiysk was stopped allegedly due to reports from the 10-12 April in Novorossiysk media “about the unfavourable environmental situation related to the appearance of bad smells (oil, oil products, gas, mercaptans and so on)” and “complaints of residents in social networks“. The Kazakhstani Ministry of Energy stated that “the Caspian Pipeline Consortium (CPC) marine terminal has been shut down for 72 hours for scheduled repairs. The shutdown is done according to a pre-announced schedule“. Although a few hours before the Energy Ministry’s comment, Kazakhstan’s government-controlled media reported that Kazakhstan’s oil transportation was stopped allegedly due to “complaints” from residents of Novorossiysk. On 14 April 2023, the Caspian Pipeline Consortium resumed shipments of Kazakhstani oil.
The authorities spread similar disinformation about allegedly “stopping the transportation of Kazakhstani oil through Russian territory” in July 2022, amid an “imaginary conflict” between Tokayev and Putin over Tokayev’s statements about alleged “non-recognition” of Donetsk and Luhansk regions.
Creating the appearance of combating parallel imports
On 16 March 2023, Kazakhstan’s pro-government media reported that the Kazakhstani border service had detained people who were allegedly trying to smuggle helmets and tactical backpacks into Russia. On 20 March 2023, the media reported that Kazakhstan’s border service allegedly prevented Russians from exporting equipment for a mass distribution of messages and 600 SIM cards from Kazakhstan to Russia. The Kazakhstani authorities create the appearance that they are taking measures to prevent the supply of banned goods to Russia from Kazakhstan.
Kazakhstan as alleged “victim of potential Russian aggression”
Another method of disinformation is the portrayal of Kazakhstan as allegedly “a victim of potential Russian aggression”. This allows the Kazakhstani authorities to promote propaganda about a “forced balance” on the issue of Russia’s war against Ukraine. As evidence, the Kazakhstani authorities show “attacks” from Russian propagandists and deputies, as well as “separatists” who want the secession of the northern regions of Kazakhstan and their annexation to Russia , . By positioning themselves as “victims of potential aggression”, the authorities manage to avoid secondary sanctions.
On 30 March 2023, various media circulated a video in which a group of people from the North Kazakhstan region announced the establishment of a so-called “people’s council” and declared their alleged “independence”. On 31 March, the North Kazakhstan region Police Department announced that criminal proceedings had been initiated against this group of people. However, this group of people declared their “independence” as early as 19 March, and began posting on their Instagram page as early as 18 February 2023. For more than a month, the Kazakhstani authorities did not react in any way to their activities. In addition, a statement by this group of people was printed in the newspaper Inform-Vest on 23 March 2023. Since all newspapers are de-facto controlled by the authorities, the article in the newspaper means that this is a campaign organised by the authorities to misinform the West and Ukraine that Russia allegedly wants to take over the northern regions of Kazakhstan.
Recommendations on personal sanctions against individuals and entities who facilitate the circumvention of sanctions against the Russian Federation
Individuals to be included in the sanctions list:
1. Kassym-Jomart Tokayev (Kazakh: Қасым-Жомарт Кемелұлы Тоқаев), (Cyrillic: Касым-Жомарт Кемелевич Токаев): born 17 May 1953, a Kazakh politician and diplomat who is currently serving as the President of Kazakhstan since 20 March 2019.
The President of Kazakhstan is responsible for helping Putin to circumvent Western sanctions due to a number of reasons. Despite claims of democratic reforms and improvement in human rights, the reality is that under the governance of Tokayev, Kazakhstan has remained authoritarian with human rights abuses.
The mass shootings and deployment of the CSTO troops to suppress protesters during the January 2022 protests in Kazakhstan are a clear indication of the government’s disregard for human rights and democracy. Over 10,000 people were arrested, and hundreds were severely tortured, indicating a blatant disregard for the basic rights of citizens. Moreover, the Kazakhstani authorities have failed to conduct an objective and transparent investigation into the shootings and torture of peaceful citizens, indicating a lack of accountability. Tokayev remained in power only due to employment of the Russia-led CSTO troops, called to Kazakhstan on a false pretext.
Kazakhstan’s strategic alliance with Russia and its conduct of large-scale disinformation operations in Ukraine and the West about the alleged “conflict” between Tokayev and Putin, “strict implementation of sanctions”, the “threat of a Russian attack on Kazakhstan” and, accordingly, “forced support for Russia” indicates an active effort to help Russia circumvent international sanctions.
As Head of State, Tokayev controls all branches of government. All the actions of the customs service, the state railroad company, the country’s financial regulator (controlling the second-tier banks that secure transactions) are subordinated to the President of Kazakhstan. Therefore, export operations to circumvent sanctions cannot take place without his direct instruction and coordination.
2. Imangali Tasmagambetov (Kazakh: Иманғали Нұрғалиұлы Тасмағамбетов), (Cyrillic: Имангали Нургалиевич Тасмагамбетов): born 9 December 1956, is a Kazakh politician and diplomat, since 1 January 2023 the current Secretary-General of the Collective Security Treaty Organization (the CSTO) for a period of three years (he was appointed on 23 November 2022) as representative of Kazakhstan.
Tasmagambetov has close ties to the Kremlin’s regime and has been a member of the board of directors of KAMAZ, Russia’s largest truck manufacturer, since 2021. KAMAZ is a supplier of armored vehicles to Russia’s military and has been sanctioned by the US and the EU. From 2017 to 2019, he served as the Kazakh Ambassador to Russia.
Tasmagambetov has held several high-profile government positions in Kazakhstan. From 2016 to 2017, he was Deputy Prime Minister of Kazakhstan. Prior to that, Tasmagambetov was the Minister of Defense of Kazakhstan from 2014 to 2016. He also served as the mayor (akim) of Astana from 2008 to 2014 and as the mayor of Almaty from 2004 to 2008. Tasmagambetov served as Minister of Defense of Kazakhstan in 2014-2016. Tasmagambetov was the Prime Minister of Kazakhstan from 2002 to 2003 and held various government positions before that.
On 28 February 2023, there was a meeting between Secretary-General of the CSTO Tasmagambetov and the Russian Minister of Trade and Industry and concurrently Chairman of the CSTO Interstate Commission on Military-Economic Co-operation Denis Manturov.
Tasmagambetov and Manturov, on behalf of Kazakhstan and Russia respectively, publicly stated that “military-economic cooperation is the most sought-after area of cooperation in the CSTO format“. Tasmagambetov proposed to the Russian minister “to implement practical measures for cooperation among military-industrial complex enterprises of the CSTO member states for joint development and production of weapons and military equipment, and creation of service centres for maintenance and repair in connection with the geopolitical situation and increasing tension.“
On 31 March 2023, during an expanded meeting of the leadership of the CSTO’s working bodies, Secretary General Imangali Tasmagambetov was a keynote speaker. During his speech, he criticized the West’s supply of weapons to Ukraine which, according to him, nullifies the prospects of negotiations between Putin’s Russia and Ukraine: “The line of further escalation of the situation in Ukraine continues. Massive deliveries of increasingly lethal weapons to the war zone practically nullify the prospects of ending the confrontation through negotiations.“
3. Kulibayev, Timur Askaruly (Kazakh: Құлыбаев, Тимур Асқарұлы), (Cyrillic: Кулибаев, Тимур Аскарович): born 10 September 1966, a Kazakh business oligarch and son-in-law of former Kazakh president Nursultan Nazarbayev.
Kulibayev has held several positions in important state-owned enterprises that manage Kazakhstan’s natural resources, and still, through networks of onshore and offshore companies, has immense influence over Kazakhstan’s oil and gas industry. He is the former Chairman of the Management Board of Samruk-Kazyna National Welfare Fund and a member of the Board of Directors of the currently sanctioned Russian Gazprom company from 2011 to 2022. Kulibayev is the Chairman of the Kazakh Association of Oil, Gas and Energy Sector Organizations (Kazenergy). Kazenergy is a union of 59 companies operating in the oil and gas industry, power generation, and the nuclear industry in Kazakhstan.
In 2020, a Financial Times investigative report revealed that Kulibayev was involved in schemes to skim profits from state contracts for pipeline construction between Russia and Kazakhstan. Kulibayev has been called “the most important business figure in the resource-rich Republic of Kazakhstan” by The Daily Telegraph.
As of July 2022, Forbes magazine estimated the net worth of Timur Kulibayev and his wife Dinara Kulibayeva (Nazarbayeva) to be USD 7.6 billion, and that by 2023, it had increased to USD 8.6 billion. Together with his wife Dinara, Kulibayev owns the largest bank in Kazakhstan – Halyk Bank.
After the Russian invasion, on 6 April 2022, Sberbank Kazakhstan, which was owned by Russian shareholders came, under US blocking sanctions. As of the end of 2021, Sberbank Kazakhstan was the second-largest bank in Kazakhstan by asset size. The only shareholder of Sberbank Kazakhstan at the time of the sanctions list was the Russian Joint Stock Company Sberbank of Russia. Its ultimate shareholder is the Central Bank of the Russian Federation.
On 13 April 2022, Timur Kulibayev through his Halyk Bank purchased from Sberbank Kazakhstan part of its loan portfolio that consisted of 7500 corporate borrowers (25% of the loan portfolio of Sberbank Kazakhstan). Kulibayev paid a purchase price of over USD 730 million for that loan portfolio, thereby providing much needed liquidity to the sanctioned Russian subsidiary bank. On 30 May 2022, the shareholder of Sberbank Kazakhstan, Sberbank Russia, decided to pay a shareholder dividend of 99.99% of Sberbank Kazakhstan’s net profit, which was approximately USD 300 million.
Vasilenko Roman Yurievich (Cyrillic: Василенко, Роман Юрьевич): born on August 14, 1972, since January 2022, Deputy Minister of Foreign Affairs of the Republic of Kazakhstan.
Vasilenko began his career as a senior specialist and translator in the International Department of the Presidential Administration of the Republic of Kazakhstan from 1994 to 1996. He then worked as a third secretary and second secretary at the Embassy of the Republic of Kazakhstan in the United Kingdom from 1996 to 1999. Vasilenko also served as an assistant to the Head of the Prime Minister’s Office of the Republic of Kazakhstan in 1999-2000, and as the first secretary and counselor at the Embassy of the Republic of Kazakhstan in the United States from 2000 to 2007.
From 2007 to 2009, Vasilenko worked as the Chief Inspector of the Secretary’s Office of the State Secretary of the Republic of Kazakhstan and as a consultant to the Presidential Administration of the Republic of Kazakhstan. He was also the Deputy Head of the Secretary’s Office of the State Secretary of the Republic of Kazakhstan during this time. In 2009-2012, Vasilenko served as the Chairman of the International Information Committee of the Ministry of Foreign Affairs of the Republic of Kazakhstan, and from 2012 to 2013, he was the Deputy Director of the State Institution “Nazarbayev Center.”
From 2013 to 2014, Vasilenko worked as the Ambassador at Large for the Ministry of Foreign Affairs of the Republic of Kazakhstan, and from 2014 to 2016, he was the Chairman of the International Information Committee of the Ministry of Foreign Affairs of the Republic of Kazakhstan. From 2016 to 2019, Vasilenko served as the Deputy Minister of Foreign Affairs of the Republic of Kazakhstan, and from 2019 to 2022, he was the Extraordinary and Plenipotentiary Ambassador of the Republic of Kazakhstan to the Slovak Republic.
Deputy Minister Vasilenko is responsible for disinforming Ukraine and Western countries about Kazakhstan’s alleged compliance with sanctions. However, official statistics on Kazakhstan’s foreign trade indicate massive shipments of sanctioned goods from Kazakhstan to Russia. Deliberate disinformation allows the regime in Kazakhstan to avoid secondary sanctions and enjoy impunity, while helping Russia to continue its aggressive war against Ukraine.
During the press briefing on 10 March 2023, Deputy Minister Roman Vasilenko stated: “We stated a year ago that, on the one hand, while we do not support sanctions as an instrument of international policy, Kazakhstan will not assist in circumventing these sanctions by the use of our territories. At the same time, we did not receive any complaints on this matter from our Western partners.”
In his interview to Al Jazeera on 6 April 2023, Deputy Minister Vasilenko reiterated his earlier statement: “But from the first day of the conflict, we said that while we are not imposing sanctions on Russia, we will also not allow our territory to be used for the circumvention of sanctions.”
Entity to be included in the sanctions list:
1. The Collective Security Treaty Organization (CSTO) (Cyrillic: Организация Договора о коллективной безопасности (ОДКБ)): an intergovernmental military alliance in Eurasia consisting of six post-Soviet states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The organization’s primary purpose is to ensure the collective defense of its member states, but it has increasingly been used by Russia to exert its influence in the region.
The Collective Security Treaty has its origins in the Soviet Armed Forces, which was replaced in 1992 by the United Armed Forces of the Commonwealth of Independent States, and was then itself replaced by the successor armed forces of the respective independent states. Similar to Article 5 of the North Atlantic Treaty and the Inter-American Treaty of Reciprocal Assistance, Article 4 of the Collective Security Treaty (CST) establishes that an aggression against one signatory would be perceived as an aggression against all. The CSTO charter reaffirmed the desire of all participating states to abstain from the use or threat of force. Signatories are prohibited from joining other military alliances.
Despite the fact that Russia, with the support of Belarus, its closest ally and another member of the CSTO, launched a full-blown war in February 2022, Kazakhstan continues to regularly conduct military exercises and joint training with Russia and Belarus within the framework of the CSTO.
Recent training sessions of the CSTO have focused on enhancing the organization’s special forces management, air defense, and collective response capabilities. These exercises serve as a cover for Russia to train its troops and prepare for its military aggression against Ukraine.
On October 7, 2022, the coordinated actions of the Collective Rapid Reaction Forces of the CSTO were demonstrated during the command and staff exercise “Interaction.” This exercise included special exercises with reconnaissance forces “Search” and logistical support units “Echelon.”
From October 3 to 7, 2022, the active phase of the exercise was conducted at the Kazakhstani training ground “Matybulak.” The purpose of the exercise was to improve the ability of the CSTO’s Rapid Reaction Forces to work together in crisis situations, including the use of reconnaissance and logistical support units.
From 27 to 30 March 2023, the Management Academy of the Russian Ministry of Internal Affairs conducted a training session for the leadership of law enforcement agencies and special services of CSTO member states. The training focused on the management of units forming part of the CSTO Special Forces during conduct of special operations. The training aimed to improve the coordination and algorithms for the management of law enforcement agencies and special services when conducting any special operations.
Moreover, there is a particular concern for the planned joint operational and strategic exercise named “Combat Brotherhood,“ which is scheduled for 2023. The exercise is aimed at enhancing the CSTO’s collective defense capabilities and promoting interoperability among member states. This exercise poses a significant threat to Ukrainian and Western security interests and could be used as a cover for training Russian, and, potentially, Belarusian, troops to be used in the military aggression against Ukraine.
On 13 February 2023, Lukashenko, illegitimate President of Belarus, during his meeting with the Secretary General of the CSTO Imangali Tasmagambetov, stated that the CSTO member states should unite and act together: “If anyone thinks that the conflict between Ukraine and Russia is not our conflict, that we will sit quietly somewhere – nothing of the sort, it will not be like that. The time will come (it is not far away, literally tomorrow) – it will require us to define ourselves, to take a certain position. I am not saying that it will be against national interests and so on. But with all our allied disadvantages we will have to clearly define our policy, our line in order to act together. It is always easier and simpler to act together.”
- Report ‘Russia’s Accomplices in the War Against Ukraine: Kazakhstan and Kyrgyzstan, the Russian Army’s Reliable Rear’, May 2023
- Report ‘Everything for the Front. Everything for Victory. How Tokayev Helps Putin while Fooling Ukraine and the West’, March 2023
- Report ‘The Secret of Tokayev and Putin: How to Circumvent the Oil Embargo’, December 2022
- Report, ‘Kremlin’s Secret Ally. How Tokayev is Helping Putin Circumvent Sanctions’, December 2022