Monthly Archives: April 2007

07ASTANA1143, KAZAKHSTAN: INFORMATION ON BAKER HUGHES’ FCPA CASE

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Reference ID Created Released Classification Origin
07ASTANA1143 2007-04-30 08:43 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Astana

VZCZCXYZ0000
PP RUEHWEB

DE RUEHTA #1143 1200843
ZNY CCCCC ZZH
P 300843Z APR 07
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC PRIORITY 9296

C O N F I D E N T I A L ASTANA 001143 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
DEPT FOR SCA/CEN (M. O'MARA) 
 
E.O. 12958: DECL: 04/29/2017 
TAGS: ENRG EINV KZ
SUBJECT: KAZAKHSTAN: INFORMATION ON BAKER HUGHES' FCPA CASE 
SHARED WITH GOVERNMENT 
 
REF: STATE 54102 
 
Classified By: Ambassador John Ordway; reasons 1.4 (b) and (d). 
 
1. (C) Following receipt of reftel, Ambassador telephoned 
Prime Minister Masimov to inform him of the impending final 
court action and to ask how best to provide the GOK with the 
relevant court documents when they came available.  Masimov 
told the Ambassador to deliver them directly to him. 
 
2. (C) On April 26, after a larger meeting on a different 
issue, Ambassador had a brief one-on-one chat with the Prime 
Minister.  The Ambassador told Masimov that there was a 
question of how the USG would refer to the Kazakhstani 
persons who received the illegal payments.  Masimov said that 
he had no objection to the USG naming the principal official 
involved, and added that this approach would be far better 
than simply saying "Kazakhstani officials."  He said that 
noting that the illegal payments went to officials of 
specific state-owned enterprises would also be preferable to 
simply saying "Kazakhstani officials" which could provoke 
unwarranted speculation about the involvement of officials of 
the government itself. 
 
3. (C) On April 27, Ambassador delivered to Prime Minister 
Masimov copies of the SEC and DOJ press releases, along with 
a number of court documents provided to post by e-mail from 
SCA/CEN.  In the one-on-one meeting, Masimov expressed 
gratitude for the specificity in the two press releases, and 
for the information that had been provided.  Ambassador said 
that he was confident that the USG would cooperate with the 
GOK if the GOK wished to follow-up with its own investigation 
of the alleged Kazakhstani recipients of the illegal 
payments.  Masimov expressed his gratitude for the offer, but 
did not venture an opinion as to whether the GOK would in 
fact pursue the case. 
 
4. (C) Comment:  We understand that the principal figure in 
the case, Zhakyr Marabayev, has left his last job at 
KazMunaiGaz, the state-owned oil and gas company, and has 
essentially disappeared from the local scene.  Masimov, who 
knew exactly who Marabayev is, was totally dismissive about 
any negative consequences to his being named -- which 
strongly suggests that the GOK has no particular interest in 
defending him or his conduct.  There is some press 
speculation already that the GOK may in fact conduct an 
investigation, but we have no basis to confirm that at this 
stage.  End comment. 
ORDWAY

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07ASTANA1129, KAZAKHSTAN: ALMATY NOTES, APRIL 2007

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Reference ID Created Released Classification Origin
07ASTANA1129 2007-04-27 10:32 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9340
RR RUEHAST RUEHDBU
DE RUEHTA #1129/01 1171032
ZNR UUUUU ZZH
R 271032Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9282
INFO RUEHVEN/USMISSION USOSCE 1723
RUEHEK/AMEMBASSY BISHKEK 7971
RUEHNT/AMEMBASSY TASHKENT 7891
RUEHAH/AMEMBASSY ASHGABAT 7154
RUEHDBU/AMEMBASSY DUSHANBE 2104
RUEHMO/AMEMBASSY MOSCOW 1403
RUEHAST/USOFFICE ALMATY
RUEHNO/USMISSION USNATO 2199

UNCLAS SECTION 01 OF 02 ASTANA 001129 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KZ
SUBJECT: KAZAKHSTAN: ALMATY NOTES, APRIL 2007 
 
Ref: A. Astana 1033, B. Astana 834, C. Astana 691 
 
1. The "Almaty Notes" series is intended to maintain focus on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital" following the move of the Embassy to 
Astana. 
 
Journalist Still Missing 
------------------------ 
 
2. Journalist Oralgaysha Zhabagtaykyzy, last seen March 30 in Almaty 
(Ref A), remains missing.  Zhabagtaykyzy's relatives believe that 
her disappearance is related to her articles for the "Zakon I 
Pravosudiye" (Law and Justice) independent weekly.  The two 
articles, entitled "What are the Links between the Murder of an 
Invalid and the Embezzlement in KazakhMys Corporation?" and "Bloody 
Arbitrariness, or Who is Behind the 'Makhnovtsy' Brothers" were 
published on March 7 and March 26 respectively.  In her first 
article, the journalist wrote about a resident of Dzhezkazgan City, 
Sagit Shakputov, who reportedly was killed by a hit man, Vita 
Makhmakhanov.  Someone allegedly hired the killer to conceal 
embezzlement in the KazakhMys Corporation.  The second article was 
about the Kazatkom conflict.  Zhabagtaykyzy and her colleague Mukhit 
Iskakov traveled to Almaty from Astana on March 29 to collect 
additional information about the Kazatkom conflict for another 
article. 
 
3. On April 18 a group of Mazhilis deputies sent a request to the 
Procurator General, National Security Committee and Interior 
Ministry asking them to ensure special control over the 
investigation into the case of the missing journalist.  (Interfax, 
April 18) 
 
Aliyev Versus Nurbank Managers 
------------------------------ 
 
4. The case of former Nurbank chairman Abilmazhin Gilimov (Refs B 
and C) has been passed to the Medeu district court in Almaty, the 
Vremya weekly reported on April 12.  Gilimov has reportedly been 
accused of inciting and organizing the March 31 attack on Nurbank's 
office.  The officers of the special police squad who participated 
in the attack have been charged with abuse of power.  President 
Nazarbayev's son-in-law Rakhat Aliyev is the main shareholder of the 
bank. 
 
5. The Medeu district court also continues to examine the libel 
lawsuits filed by Rakhat Aliyev against the wives of the Nurbank 
former managers, Armangul Kapasheva and Nadira Bazarbayeva.  In 
early February, Kapasheva and Bazarbayeva accused Aliyev of 
"depriving their husbands of freedom."  In response, Aliyev filed 
libel lawsuits against them.  Recently there have been rumors about 
possible reconciliation between the parties.  However, Mrs. 
Kapasheva has not confirmed the reconciliation.  The last court 
hearing on April 18 did not take place because witnesses from both 
parties failed to appear in the court.  (www.zonakz.net, April 19) 
 
Alga Party's Problems with Registration 
--------------------------------------- 
 
6. In an attempt to attract public attention to its problems with 
registration, in late March in every region of the country the Alga 
party filed applications to demonstrate on April 12 in front of the 
local offices of the Ministry of Justice.  Out of 17 applications, 
10 were denied and seven received no response.  Alga then decided to 
organize public events on April 12 to hand over petitions instead. 
However, on the eve of the event in some regions, including 
Shymkent, Kzylorda, Taraz, Aktobe and Petropavlovsk, local 
procurators visited the Alga offices to serve the party with 
warnings against the actions.  Alga nevertheless went through with 
the planned events   In Almaty and Astana cities the events went 
peacefully, but in other regions they were disrupted by the local 
authorities.  In the cities of Petropavlovsk, Kostanay and Rudniy 
nine Alga activists in all were fined for organizing the 
unsanctioned actions.  (Alga party press releases, April 12 and 18) 
 
7. Alga filed its most recent application for registration on 
November 9, 2006.  According to the Law on Political Parties, the 
Ministry of Justice was supposed to make a decision within one 
month.  On March 8, the MOJ's Registration Committee suspended the 
registration process in order to check the submitted documents. 
Since then the registration has remained suspended.  (Alga party 
press release, April 12) 
 
Almaty Residents Protest Intensive Construction 
--------------------------------------------- -- 
 
ASTANA 00001129  002 OF 002 
 
 
 
8. The city administration has denied Almaty city residents' request 
to hold a rally in the center of the city, the head of the 
committee, "Let's Defend Our City", Dametken Alenova, told a press 
conference in Almaty on April 10.  The city administration offered 
the outskirts of the city for the rally, but the organizers of the 
rally rejected the offer and have filed a new request for a rally in 
the center of the city on April 29.  The Let's Defend Our City 
Committee opposes the demolition c
ampaign and what they perceive as 
overly intensive construction in Almaty.  (Kazakhstan Today news 
agency, April 10) 
 
Women Object to Eviction from Dormitory 
--------------------------------------- 
 
9. On April 11 about 30 women, tenants of the Architecture Academy 
dormitory in Almaty, picketed the city administration office.  They 
were protesting against the eviction of their families from the 
dormitory.  The deputy city akim received the women, but denied 
their right to stay in the dormitory.  The women threatened to 
picket the Eurasia Media Forum and to seek asylum in other 
countries. 
 
10. A month ago, court bailiffs attempted to evict forty families 
from the dormitory belonging to the academy.  The tenants opposed 
the eviction and on April 4 announced a hunger strike.  The tenants 
maintained they had been living in the building for many years and 
had the right to privatize their living quarters.  (Channel-31, 
April 11) 
 
Draft Bill on Opposition Activities 
----------------------------------- 
 
11. The National Social Democratic Party of Kazakhstan organized on 
April 12 in Almaty a round table discussion of its draft bill on 
opposition activities.  The draft bill provides for guarantees that 
opposition parties will have representatives on election commissions 
and that opposition factions' representatives in Parliament shall 
chair at least a third of parliamentary committees.  According to 
the bill, if there is a block of opposition parties in Parliament, 
it will be allowed to nominate the deputy speaker of each house. 
Some participants expressed doubts that Parliament would accept the 
bill for consideration and support it.  (Press release, April 12) 
 
Self-Mutilation in Corrective Facility 
-------------------------------------- 
 
12. On April 15 in the high security facility in Zarechnaya, Almaty 
Oblast, 70 inmates slashed their stomachs and wrists to protest 
conditions in the facility.  Twelve inmates were hospitalized. 
Criminal cases have been filed against the participants of the 
action, a representative of the oblast prosecutor's office reported. 
 Recent amendments to the Criminal Code provide for 7 to 10 years 
imprisonment for those who participate in self-mutilation and 
disobedience actions.  (Interfax news agency, April 15 and 20) 
 
Police Officers Involved in Brawl Arrested 
------------------------------------------ 
 
13. In Almaty three former policemen who participated in a fight 
with local residents in the Bodrym caf have been arrested, the 
deputy head of the Almaty police told the Kazakhstan news agency on 
April 14.  During the March 25 conflict in the caf the former 
policemen killed a visitor and harshly beat two others.  A probe 
into the case is underway. 
 
ORDWAY

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07ASTANA1126, KAZAKHSTAN CONTACT FOR ILEA BUDAPEST

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Reference ID Created Released Classification Origin
07ASTANA1126 2007-04-27 09:20 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9263
PP RUEHAST
DE RUEHTA #1126 1170920
ZNR UUUUU ZZH
P 270920Z APR 07
FM AMEMBASSY ASTANA
TO RUEHUP/AMEMBASSY BUDAPEST PRIORITY 0120
INFO RUEHC/SECSTATE WASHDC 9280
RUEHAST/USOFFICE ALMATY
RUEHC/SECSTATE WASHDC//SCA COLLECTIVE/ 9281

UNCLAS ASTANA 001126 
 
SIPDIS 
 
BUDAPEST FOR ILEA, STATE FOR INL/C (KENNEDY), SCA/CEN (OMARA), 
INL/AAE (ALTON) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR KCRM ASEC HU KZ
SUBJECT: KAZAKHSTAN CONTACT FOR ILEA BUDAPEST 
 
Effective May 1, International Narcotics and Law Enforcement Program 
Manager Elena Be{kovnaya will be the point of contact for the 
International Law Enforcement Academy (ILEA) programs at post.  Ms 
Beskrovnaya's contact information is as follows: office phone 
(+7-3172) 70-23-14, fax (+7 3172) 70-22-87, cell (+7-777-270-6055). 
E-mail: BeskrovnayaE "at" state.gov. 
 
ORDWAY

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07ASTANA1122, KAZAKHSTANIS TELL HOLBROOKE OF PLANS TO IMPROVE

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Reference ID Created Released Classification Origin
07ASTANA1122 2007-04-27 08:55 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO9223
PP RUEHDBU
DE RUEHTA #1122/01 1170855
ZNY CCCCC ZZH
P 270855Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9273
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0146
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0001
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEBAAA/DEPT OF ENERGY WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001122 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR SCA/CEN (M. O'MARA) 
 
E.O. 12958: DECL: 04/27/2017 
TAGS: ECON PREL EINV IQ KZ
SUBJECT: KAZAKHSTANIS TELL HOLBROOKE OF PLANS TO IMPROVE 
COMPETITIVENESS 
 
REF: A. 06 ALMATY 1153 
 
     B. 06 ALMATY 256 
     C. 06 ASTANA 573 
 
Classified By: Amb. John Ordway, reasons 1.4 (B) and (D). 
 
 1. (C) Summary:  In a wide ranging conversation with the 
Ambassador and Richard Holbrooke, young Kazakhstani leaders 
discussed President Nazarbayev's efforts to empower 
Kazakhstani business to address the problems facing the 
country, including corruption.  One part of the plan is a new 
state holding company designed in part to break the 
telecommunications monopoly that is strangling the country's 
competitiveness.  Holbrooke also relayed to the Ambassador a 
warning from President Nazarbayev that the U.S. must not 
withdraw from Iraq before the situation is stabilized.  End 
summary. 
 
2.  (SBU) The Ambassador hosted a lunch in honor of Amb. 
Richard Holbrooke on April 21 in Astana.  Attendees included 
Nurlan Kapparov of KazInvest Bank and the Lancaster Group, 
Azamat Abdymomunov of the newly-created Samgau Holding 
Company, and Pol-Econ Chief (notetaker). 
 
------------------------------------- 
Nazarbayev Tasks Kazakhstani Business 
------------------------------------- 
 
3. (SBU) Kapparov reported that President Nazarbayev held a 
"groundbreaking discussion" on April 20 in Almaty with 
leading Kazakhstani businesses.  According to Kapparov, 
during the two and a half hour meeting Nazarbayev told the 
Kazakhstani business elite that it was time for them to help 
"build the nation that had brought them up."  Nazarbayev also 
said that it was time to address the problem of corruption 
that is hindering Kazakhstan's development.  Prime Minister 
Masimov is to implement the new program of public-private 
partnership, which will involve identifying 30 national 
champions and helping them succeed.  Kapparov described the 
initiative as an entirely new, "collaborative" approach on 
the part of the GOK, which used to simply lecture to business. 
 
4. (C) "Masimov will be the best Prime Minister in 
Kazakhstan's history," Kapparov predicted, due to his 
impressive management skills and proactive approach. 
Holbrooke observed that while Masimov is clearly talented and 
dynamic, the incompetence of the Kazakhstani bureaucracy 
forces him to "micromanage" issues that would be handled well 
below his level in a more mature government.  Kapparov 
concurred but predicted that the administrative reform 
project that Masimov has launched will improve the situation, 
and also give him grounds to change the current team of 
ministers.  Abdymomunov commented that the current cabinet is 
the "weakest" in recent memory. 
 
5. (SBU) Kapparov said that he is working on a project to 
clean up the Khorgos customs post on the border with China, 
infamous for its corruption (Ref A).  Kazakhstan had never 
done anything to construct the planned free trade area, he 
noted, while China had built an impressive complex of 
warehouses on its side.  Kapparov said that he was in 
discussions with major international logistics firms to get 
them to take over freight handling at the border.  Major 
multinational manufacturers such as Proctor and Gamble had 
expressed interest in sending goods from China to Moscow via 
Kazakhstan if rapid delivery times could be guaranteed. 
 
--------------------------------------------- ---- 
New Holding Company to Improve Telecommunications 
--------------------------------------------- ---- 
 
6. (C) Abdymomunov, who had been Deputy Minister of Education 
and Science until the previous week, explained that the 
Kazakhstani government had established the Samgau ("To Soar") 
Holding Company to manage and modernize the 
telecommunications sector.  The organization is so new that 
it does not yet have a charter or operating capital.  The 
original intent was for Samgau to take KazTelecom from Samruk 
Holding, but Samruk was strenuously resisting the change 
because KazTelecom is its most profitable firm by far.  "It 
brings in more profit than KazMunayGas," according to 
Abdymomunov, due to its monopolistic status and the fact that 
many of KMG's oil fields are decades old and suffer from 
falling production. 
 
7. (C) Abdymomunov said that if Samgau cannot wrest control 
of KazTelecom from Samruk, it will create a second national 
 
ASTANA 00001122  002 OF 002 
 
 
telecommunications firm to break the monopoly and spur 
competition.  Samgau will also control the GOK's shares in 
KazTransCom, KaTelCo, KazTeleRadio, and KazPost.  The GOK 
created the new holding company in order to address the 
telecommunications issues that are hindering Kazakhstan's 
competitiveness and diversification, Abdymomunov said. 
Deputy Head of the Presidential Administration Serik 
Burkitbayev will be chairman of the Samgau board of 
dire
ctors, an arrangement that Abdymomunov described as 
"possibly not quite legal" since the chair should be a member 
of government.  (Comment: Bending the rules is nothing new 
for Burkitbayev, perhaps best known to the USG for his 
involvement in the Byelkamit scandal, Ref B.  According to 
subsequent press reports Burkitbayev is also angling to have 
KazAeroNavigatsiya folded into Samgau.  End comment.) 
 
--------------------------------------------- ----- 
Nazarbayev to Holbrooke:  "U.S. Must Stay in Iraq" 
--------------------------------------------- ----- 
 
8.  (C) In a one-on-one conversation following the lunch, 
Holbrooke told the Ambassador that during their meeting in 
Almaty President Nazarbayev had stressed the importance of 
the U.S. remaining in Iraq.  Nazarbayev is convinced that a 
premature U.S. withdrawal would lead to widespread civil war 
in Iraq and chaos throughout the region, according to 
Holbrooke.  (Note:  Nazarbayev made the same point to the 
Ambassador in November; Ref C.) 
ORDWAY

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07ASTANA1121, KAZAKHSTAN: PRESIDENT SIGNALS SUPPORT FOR INVESTMENT IN

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Reference ID Created Released Classification Origin
07ASTANA1121 2007-04-27 07:01 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9066
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1121 1170701
ZNR UUUUU ZZH
P 270701Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9272
INFO RUCNCIS/CIS COLLECTIVE 0145
RUEHVEN/USMISSION USOSCE 1722
RUEHAST/USOFFICE ALMATY
RUEHBUL/AMEMBASSY KABUL 0319

UNCLAS ASTANA 001121 
 
SIPDIS 
 
DEPARTMENT FOR SCA/CEN (M. O'MARA) 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL AF XD KZ
SUBJECT: KAZAKHSTAN: PRESIDENT SIGNALS SUPPORT FOR INVESTMENT IN 
AFGHANISTAN 
 
1. (U) In an April 19 speech before the 6th Annual Eurasia Media 
Forum in Almaty, President Nursultan Nazarbayev declared that 
Kazakhstan and its Central Asian neighbors must take some 
responsibility for reconstructing Afghanistan, in part to help 
create a "belt of economic well-being" that would serve as a 
reliable barrier to international terrorists, religious extremists, 
drug traffickers, and illegal migration.  Nazarbayev noted that 
Kazakhstan has already shipped 3,000 tons of wheat to Afghanistan, 
as well as 85,000 tons of grain through the UN Global Food Program. 
The president also said that Kazakhstan is currently developing a 
"Special Action Program" to increase humanitarian and economic 
cooperation with Afghanistan and invest in the Afghan economy.  He 
announced that Kazakhstan plans to construct a school in the 
Samangan region and a hospital in the Bamian region, and will 
encourage Kazakhstani companies to enter the Afghan market. 
 
2. (SBU) On April 26, Talgat Shaldanbai, the desk officer at the 
Ministry of Foreign Affairs responsible for Afghan issues, confirmed 
to Poloff the ongoing development of a "Special Program to Support 
the Islamic Republic of Afghanistan."  Shaldanbai explained that the 
program is in the early drafting stage, but will eventually include 
cultural, humanitarian, investment, and economic support components, 
as well as plans for providing training and expertise to Afghan 
institutions.  Shaldanbai said that Kazakhstan was "80%" certain 
that it would build a school in Samangan, and was still working with 
the Government of Afghanistan on the possibility of building a 
hospital in the Bamian region. 
 
3. (SBU) Comment:  Although Kazakhstan's Special Action Program for 
Afghanistan remains in its very early stages, President Nazarbayev's 
public call for investment in Afghanistan signals a growing 
recognition that Central Asia's fate is linked to Afghanistan's 
fate.  Post will continue to encourage and support Kazakhstan's 
investment and reconstruction initiatives in Afghanistan.  End 
comment. 
 
ORDWAY

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07ASTANA1117, KAZAKHSTAN: PAVLODAR CHEMICAL PLANT SOLD

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Reference ID Created Released Classification Origin
07ASTANA1117 2007-04-26 10:53 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXYZ0016
RR RUEHWEB

DE RUEHTA #1117 1161053
ZNR UUUUU ZZH
R 261053Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9268
INFO RUEHMO/AMEMBASSY MOSCOW 1401

UNCLAS ASTANA 001117 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/CEN (M. O'MARA) AND ISN/CTR (E. CAMERON) 
 
E.O. 12958: N/A 
TAGS: PARM PREL CBW CWC KZ
SUBJECT: KAZAKHSTAN: PAVLODAR CHEMICAL PLANT SOLD 
 
1. The Pavlodar Chemical Plant was sold at auction on March 
26 to Bazalt PV for 1.5 billion tenge ($13 million).  All of 
the plants assets - the buildings on the plant's territory, 
equipment and transport, and the Bylkyldak retention lake - 
were sold as one lot.  Little is known about Bazalt PV.  In 
response to press inquiries, neither the bankruptcy 
administrator nor the Pavlodar Oblast Department for Industry 
were able to provide any information about Bazalt's 
activities.  The company has not yet announced whether it 
will resume chemical production at the plant. 
 
2.  The auction marked a third attempt to sell the Pavlodar 
Chemical Plant after it declared bankruptcy in 2005.  Each of 
the first two auctions attracted only one bidder because of a 
requirement that all bidders possess a phosphorus 
pentasulphide handling license.  Three bidders participated 
in the third auction after the handling license requirement 
was dropped. The two losing bidders challenged the legality 
of the auction, claiming that Bazalt submitted its tender 
documents after the deadline for auction registration.  On 
April 19, a Pavlodar Oblast court dismissed the claim of the 
losing bidders. 
ORDWAY

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07ASTANA1116, KAZAKHSTAN COMMITTED TO NPT

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Reference ID Created Released Classification Origin
07ASTANA1116 2007-04-26 10:52 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7947
RR RUEHAST
DE RUEHTA #1116 1161052
ZNR UUUUU ZZH
R 261052Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9267
INFO RUEBAAA/DEPT OF ENERGY WASHDC
RUEHAST/USOFFICE ALMATY

UNCLAS ASTANA 001116 
 
SIPDIS 
 
NPT COLLECTIVE 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN (O'MARA) 
 
E.O. 12958: N/A 
TAGS: ENRG KNNP MNUC PARM PREL NPT KZ
SUBJECT: KAZAKHSTAN COMMITTED TO NPT 
 
REF: STATE 54147 
 
1. (SBU) Poloff delivered reftel points to Kayrat Sarzhanov, 
MFA International Security Department Advisor, who welcomed 
the information and emphasized Kazakhstan's commitment to the 
Treaty on the Non-Proliferation of Nuclear Weapons (NPT). 
Sarzhanov noted that Kazakhstan condemned North Korea's 
violations of its NPT obligation and has strongly supported 
the UN resolutions aimed at North Korea.  Kazakhstan has also 
pushed for greater transparency from Iran, according to 
Sarzhanov.  Last week, he said, President Nazarbayev stated 
in a speech at the Eurasian Media Forum that Iran must prove 
to the world that it only seeks to develop a peaceful nuclear 
program.  (Note: In the same speech, Nazarbayev called the 
NPT "inefficient."  In some parts of the world, he claimed, 
the Treaty is considered "unfair" and as establishing 
obligations only for non-nuclear states.  His criticism of 
the NPT was part of a larger condemnation of "elite 
approaches to international policy-making." End note) 
 
2. (SBU) Sarzhanov expressed interest in U.S. support for 
expanded use of nuclear power as an energy source. 
Kazakhstan has already signed nuclear cooperation agreements 
with EU and Russia, he said.  Sarzhanov added that Kazakhstan 
would like to further strengthen its cooperative relationship 
with Russia and will look to do so during President Putin's 
visit in May. 
ORDWAY

Wikileaks

07ASTANA1115, KAZAKHSTAN: TRAFFICKING IN PERSONS SOLICITATION FOR

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Reference ID Created Released Classification Origin
07ASTANA1115 2007-04-26 10:38 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO7935
PP RUEHAST
DE RUEHTA #1115 1161038
ZNR UUUUU ZZH
P 261038Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9266
INFO RUEHAST/USOFFICE ALMATY

UNCLAS ASTANA 001115 
 
SIPDIS 
 
SCA COLLECTIVE 
 
DEPT FOR SCA/CEN, INL/AAE (ALTON), SCA/CEN (OMARA), G/TIP 
(LEMAR-MEREDITH) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ASEC ELAB KCRM PHUM PREL SMIG
SUBJECT: KAZAKHSTAN: TRAFFICKING IN PERSONS SOLICITATION FOR 
G/TIP-MANAGED FY 2007 ESF AND INCLE FUNDS 
 
REF: STATE 28150 
 
1.  Summary: In response to the Solicitation for Proposals by the 
Office to Monitor and Combat Trafficking (G/TIP), Embassy Astana has 
reviewed and vetted three proposals addressing human trafficking in 
Kazakhstan.  Post has selected one proposal for review and would 
welcome the opportunity to discuss and supply additional information 
concerning this proposal.  The remaining information requested in 
reftel is being emailed to G/TIP Program Coordinator for NEA and 
SCA, Amy LeMar-Meredith separately. 
 
2.  Proposal Summary Information: 
Name of Applicant: International Organization for Migration in 
Kazakhstan (IOM) 
Requested Funding Amount: $548,175 
Project Title: Shelter for victims of human trafficking in 
Kazakhstan 
Project Duration: Two years 
Proposal Abstract: The applicant's proposal includes assessment and 
establishment of a shelter in one of three cities of Northern 
Kazakhstan, conducting two workshops for GOK officials to advocate 
NGO grants to sustain the shelter, and development of TIP 
information/training materials to educate law enforcement officers 
and university faculty and administrators. 
 
3.  The three part project will result in significant increase of 
victims' assistance, rehabilitation and reintegration programs, and 
coordinate and sustain the victim's assistance services with 
appropriate government agencies, thereby increasing government's 
involvement in this critical area (a shortcoming noted in G/TIP 
analysis of anti-TIP activities of the GOK). It will also develop 
the capacity of law enforcement involved in the prevention and 
prosecution of trafficking crimes and the TIP knowledge base of 
civil institutions that educate the population. 
 
ORDWAY

Wikileaks

07ASTANA1113, KAZAKHSTAN: INL FIRST QUARTER 2007 MEETINGS

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Reference ID Created Released Classification Origin
07ASTANA1113 2007-04-26 10:38 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO7932
PP RUEHAST
DE RUEHTA #1113/01 1161038
ZNR UUUUU ZZH
P 261038Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9264
INFO RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 001113 
 
SIPDIS 
 
SCA COLLECTIVE 
 
DEPT FOR INL/AAE (ALTON), SCA/CEN (OMARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR PGOV KCRM KZ
SUBJECT: KAZAKHSTAN: INL FIRST QUARTER 2007 MEETINGS 
 
REF: A) Astana 827, B) Astana 1104 
 
1.  Summary: Highlights of the INL Officer's quarterly meetings 
(accompanied by visiting INL/AAE desk officer) with GOK officials 
include a positive initial meeting with the new head of the MVD Drug 
Control Committee; agreement on scheduling of the opening of the MVD 
Anti-TIP Center; assurances of continued cooperation with the 
temporary head of the Financial Policy Academy; a request for 
continued engagement to improve the collection and analysis of crime 
statistics from the PGO; and agreement on the upcoming visit of 
Border Guards to the U.S.  Visits to INL program sites throughout 
Kazakhstan will be reported septel. End summary. 
 
 
----------- 
BACKGROUND: 
----------- 
 
2.  In conjunction with the visit of INL/AAE desk officer to 
Kazakhstan, on March 26 post held the first quarter 2007 meetings 
with representatives from the Committee on Combating Narcotics of 
the Ministry of Internal Affairs, the Legal Institute of the 
Ministry of Internal Affairs, the Committee on Statistics of the 
Procurator General's Office, the Financial Police Academy of the 
Agency on Combating Economic Crimes and Corruption, the Military 
Institute of the Committee for National Security, the Border Guard 
Service of the Committee for National Security. 
 
2.  Under the terms of the Amended Letter of Agreement, INL 
implements six programs in Kazakhstan: Counter-Narcotics, Anti-Money 
Laundering, Anti-Trafficking in Persons, Border Security, Collection 
of Criminal Statistics, and Improvement of Narcotics Forensics. 
Currently under development is a program to reduce drug demand. 
 
 
--------------------------------------- 
NEW DRUG CZAR...COLLABORATION CONTINUES 
--------------------------------------- 
 
5.  On March 26, INL representatives met with the new Chairman of 
the Committee for Combating Drug Trafficking, Maratkali Nukenov, to 
discuss future plans for implementation of the INL project on 
strengthening seven internal anti-narcotics "Rubezh" checkpoints 
located on north-south traffic arteries in Kazakhstan.  The 
Committee has assigned 171 officers to work at these posts.  Nukenov 
expressed continued support for the Rubezh project and said he 
looked forward to continued collaboration with the INL office.  On 
March 21, 2007 Major-General Maratkali Ordabayevich Nukenov was 
appointed the Head of the Kazakhstani Committee on Combating Drug 
Trafficking and of the Ministry of Internal Affairs.  The new 
Chairman replaces 49-year old Major-General Anatoly Vyborov, who 
submitted his resignation to the Minister of Internal Affairs on 
March 16, 2007 (Ref A). 
 
 
--------------- 
ANTI-TIP CENTER 
--------------- 
 
6.  Based on the request of the Vice-Minister of Internal Affairs in 
November 2005, INL conducts joint project to support the Anti-TIP 
Center at the Karaganda Legal Institute of the Ministry of Internal 
Affairs.  The GOK provided $114,000 from the federal budget for the 
development of the Institute and the other aspects of the the 
Institute.  The Director of the Institute, Dzhan Kenzhetayev, 
expressed his satisfaction of cooperation with the Embassy over the 
past year and a half.  He confirmed his interest in providing joint 
training on improving professional anti-trafficking detection and 
investigation skills and approved training plan for 2007. 
 
7.  The Director also agreed to conduct the official opening of the 
Anti-TIP Center in June.  He said he viewed the opening as a 
statement that Kazakhstan is ready to host international Anti-TIP 
training but had no specific plans yet for inviting officers from 
neighboring countries. 
 
 
------------ 
BEING HONEST 
------------ 
 
8.  INL representatives met with the representatives of Procurator 
General's Office including Alexander Ogai, Head of the Section of 
Legal Oversight of State Bodies.  He briefed INL on the reasons for 
delay of the Law on Anti-Money Laundering, saying that the delay 
provided more time for citizens to legalize their property (Ref B). 
Initially legalization action lasted until December 31, 2006, then 
was extended the first time until March 31, and a second time until 
August 1, 2007.  Ogai said he expected the Law on Anti-Money 
 
ASTANA 00001113  002 OF 002 
 
 
Laundering to be adopted by the end of the year.  In response to INL 
Officer's question about the volume of property legalization claims, 
Ogai said that in the beginning, people were afraid of being fined 
or prosecuted but now the situation had changed and more and more 
people were coming forward to register property.  However, he said 
that the registration centers did not have enough personnel to 
process such a large volume of claims, another reason for extending 
the property legalization law. 
 
 
--------------------------------- 
BORDER GUARDS AGREE TO VISIT U.S. 
--------------------------------- 
 
8.  Bauyrzhan Yelubayev, Head of the Military
Institute, agreed to 
represent the Border Guards during the upcoming May visit to U.S. on 
May 17-26.  The main aim of this trip is to establish a professional 
relationship between the Military Institute of Kazakhstan and the 
U.S. Border Patrol Academy in Artesia, New Mexico.  Yelubayev said 
the Border Guards hopes to transition the training of the Border 
Guards from a military service to that of a law enforcement 
organization that can respond to multiple missions including 
counter-narcotics, trafficking, WMD, and terrorism. 
 
9.  Note: Originally, Turzyn Uazhanov, Deputy Head of the Border 
Guard Service of the Committee for National Security, agreed to join 
the delegation for the visit to the U.S. but later excused himself 
because of increased staffing turnover among the Deputy Heads of the 
Border Guards.  He agreed to visit at a later date.  However, during 
the quarterly meeting, he expressed interest in continuing 
cooperation with INL to strengthen the southern border of Kazakhstan 
since it is the most vulnerable and active area.  INL Officer agreed 
to continue to include assistance to the Southern border when 
conducting the next phase of the border assess and equip program on 
the Kazakhstani-Chinese border.  End note. 
 
 
--------------------------------------------- ------ 
GOK SHARES COSTS TO DEVELOP BETTER CRIME STATISTICS 
--------------------------------------------- ------ 
 
10.  INL representatives noted the success of the joint project with 
the PGO Statistics Committee which arranged a meeting in Washington, 
DC, on February 4-9 with their colleagues in the Statistics Bureau 
of the Department of Justice.  The goal of the visit was to improve 
the professional knowledge of statistics managers so that the 
government could make defensible human and financial resource 
allocations.  The GOK-financed trip showed that INL programs could 
leverage other contributions to improving statisticians' skills, 
knowledge, and ability. 
 
11. INL Officer also discussed the delivery of the final tranche of 
computers purchased for the Statistics Committee of the Procurator 
General's Office (PGO).  INL purchased the computers in order to 
increase the efficiency of the collection of crime statistics.   INL 
implements the joint project with the PGO and provides computers to 
subdivisions throughout Kazakhstan.  In addition, INL assistance 
supports interagency seminars on revising and improving the joint 
collection of statistics on all types of crime. 
 
 
------- 
COMMENT 
------- 
 
12.  Post was heartened to see the GOK devoting its own money to 
complement an INL-funded project.  The establishment of a 
professional relationship between the statisticians in the PGO and 
in DOJ is a healthy sign of GOK interest in raising its crime 
statistics capability to international standards.  Post also views 
this as a very positive outcome of an INL project and will try to 
replicate it. 
 
ORDWAY

Wikileaks

07ASTANA1112, KAZAKHSTAN: INL DESK OFFICER CHECKS OUT CAMELS, KAZAKHSTANI

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Reference ID Created Released Classification Origin
07ASTANA1112 2007-04-26 10:38 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO7930
RR RUEHAST
DE RUEHTA #1112/01 1161038
ZNR UUUUU ZZH
R 261038Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9262
INFO RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 001112 
 
SIPDIS 
 
SCA COLLECTIVE 
 
DEPT FOR SCA/CEN, INL/AAE (ALTON), SCA/CEN (OMARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR PGOV KCRM KZ
SUBJECT: KAZAKHSTAN: INL DESK OFFICER CHECKS OUT CAMELS, KAZAKHSTANI 
CUISINE, KUMYS, AND OF COURSE, INL PROGRAMS 
 
 
1.  Summary: In addition to attending the quarterly meetings 
reported septel, INL desk officer viewed border intercepts at the 
Tazhen border post in Western Kazakhstan; visited the Anti-TIP 
Center in Karaganda; shared a Nauryz meal at the Financial Police 
Academy in Koschi; learned of the increased drug seizures resulting 
from the establishment of the Regional Border Guard Training Center 
in Saryagash; and visited the Military Institute Border Guard 
Training Center and the CARICC building. End summary. 
 
 
--------------------------------------------- ------ 
BORDER? SAY WHAT? WHERE THE CAMELS AND HORSES ROAM 
--------------------------------------------- ------ 
 
2.  Two border posts in Western Kazakhstan provided visiting INL 
desk officer an excellent view of the challenges of securing some of 
the 13,000 kilometers of borders in the ninth largest country in the 
world.  Tazhen and Beineu are located in the desert of the far west 
in Kazakhstan and provide passport control and customs services on a 
quasi-road and rail line crossing into Uzbekistan. 
 
3.  In conjunction with an INL-funded project titled "Enhancing 
Immigration Inspection and Border Control on the Land Border of 
Kazakhstan with Uzbekistan," implemented by the International 
Organization for Migration (IOM) to assess and lightly equip 
selected border posts on the border with Uzbekistan and 
Turkmenistan, the INL delegation visited the posts to deliver 
vehicles and inspection equipment. 
 
4.  After a three-hour one-stop plane ride from Astana, an 
eight-hour overnight train ride to Beineu and a two-and-a-half hour 
4WD slog through the spring mud south to Tazhen, INL Officer and 
staff were able to conduct the handover ceremony just in time for 
the binoculars to prove their utility.  Testing the binoculars, a 
border guard saw a herder crossing the wide open border from 
Kazakhstan to Uzbekistan who had almost been caught by the Uzbek 
border guards.  The Kazakhstani border guards used a 4WD vehicle to 
respond to the apparent border violation.  It turned out that the 
shepherd was not crossing the border intentionally but wanted to 
catch up with a member of his herd of grazing camels and horses that 
was not respecting the boundary.  (Note: In the last year several 
cases have been reported where Uzbekistani border guards "capture" 
Kazakhstani citizens who inadvertently wander across the unfenced, 
unmarked border.  The Kazakhstani border guards' quick action likely 
avoided another messy border incident and saved an innocent shepherd 
boy significant difficulties. End note.) 
 
5.  Aside from the overall aim of enhancing the security of 
Kazakhstan's borders, INL's program provides an ancillary benefit to 
under-funded, under-equipped, and under-staffed posts such as 
Tazhen.  Some of the biggest challenges for border guards serving in 
this area are climate and geography.  The post is located in a scrub 
desert which is impassable when the winter and spring rains arrive. 
During summer months the temperature reaches 50 degrees Centigrade. 
In addition to the 4WD vehicle and binoculars, inspection equipment, 
communications equipment, INL sometimes provides air conditioning 
units just to make office space at the border posts tolerable. 
 
6.  Staffing these difficult posts will continue to be a problem for 
the foreseeable future.  Salaries would have to be substantially 
increased to make service in the remote desert region attractive. 
Currently, officers and staff work a week of 12 hour shifts living 
in barracks and then travel two and a half hours back to Beineu for 
time off.  In addition, living in Mangystauskaya oblast is expensive 
because the difficulties of importing products and the oil and gas 
development has driven prices up beyond the reach of border guard 
salaries. 
 
7.  More effective technology is necessary to monitor the vast open 
territory on the border with Uzbekistan.  The possibility of 
providing such equipment is being considered within the framework of 
the CENTCOM-funded Counter-Narcotics Project implemented by the 
Embassy's Office of Military Cooperation. 
 
 
----------------------- 
SOUTH, ALONG THE BORDER 
----------------------- 
 
8.  From the empty, desert west of Kazakhstan the INL desk officer 
traveled to the urban, riverine south where INL funded a Regional 
Border Guard Training Center in Saryagash.  The Border Guards 
provided the building, located on a base they share with the 
military, and INL renovated and equipped a large classroom and 
offices to provide a central location where officers and staff of 
nearby posts could receive instruction without having to travel to 
Almaty - a one day trip one way. 
 
 
ASTANA 00001112  002 OF 002 
 
 
9.  The Head of the Border Guard Sector, Duman Yelemessov, informed 
the delegation how he is effectively using the classroom.  In just 
four months, Yelemessov h
as welcomed international trainers to teach 
his troops once and conducted six sessions of GOK-funded training. 
The officers of the Kazakh-Uzbek border sector develop training 
material and conduct training for locally hired staff who examine 
the passports of those crossing the border. 
 
10.  Yelemessov announced that after providing the training seminars 
to the border guard inspectors and controllers the number of 
contraband seizures for the first three months of the year exceeded 
the number of seizures for last two years.  Within the framework of 
projects based on the ALOA INL will continue to create regional 
training centers at other locations on Kazakhstan's borders. 
 
 
---------------------------------- 
TO KARAGANDA TO COMBAT TRAFFICKING 
---------------------------------- 
 
11.  In an effort to improve Kazakhstan's capacity to combat 
trafficking in persons, Deputy Minister of Internal Affairs, Alik 
Shpekbayev, initiated the opening of the Study Center for Combating 
Illegal Migration and Trafficking in Persons (Anti-TIP Center) and 
requested U.S. assistance.  For their part, the Government of 
Kazakhstan provided around $114,000 for the improvement of the Legal 
Institute, including construction of dormitories for the Anti-TIP 
Center.  The GOK also assigned three positions to staff the Anti-TIP 
Center.  In addition, the GOK provided two classrooms and office 
space for the Anti-TIP Center.  INL provided $50,000 to furnish, 
equip and renovate Anti-TIP Center and furnish a dormitory for the 
participants who will be trained at the Center. 
 
12.  As a result of the meeting with the Director of the Legal 
Institute in Karaganda during the visit of the INL Desk Officer, it 
was agreed to conduct the official opening of the Anti TIP Center in 
June.  Opening the Anti-TIP Center is the first step in what 
Shpekbayev said is a plan to create an International Anti-TIP 
Training center where officers of neighboring countries could be 
trained as well. 
 
 
--------------------------------------------- ------- 
TEAMWORK (AND HOSPITALITY) TO FIGHT MONEY LAUNDERING 
--------------------------------------------- ------- 
 
13.  The INL desk officer's visit to the Financial Police Academy 
provided an opportunity to meet the Acting Academy Director, Nurseit 
Baizhanov.  He vowed to continue the established professional 
relationship between the Embassy and the Academy, where INL trains 
Financial Police officers on how to combat money laundering. 
Therefore, INL will continue supporting training for in-service 
officers on detection and investigation of money laundering.  New 
courses for operational financial crimes officers are planned for 
September and November 2007.  Baizhanov also graciously provided the 
INL delegation with a Nauryz eve meal of traditional Kazakh cuisine 
including kumys (fermented mare's milk), kurt (dried milk balls), 
horse meat and nauryz kozhe soup. 
 
14.  Baizhanov pointed out the utility of the INL-provided English 
Language Laboratory, noting that for more effective AML training in 
the longer term it is necessary to focus on development of English 
language skills since this will allow Kazakhstani cadets to enroll 
in more international institutions and in future will allow to 
establish the working relationship FIU in U.S. 
 
 
--------------------------------- 
AND THERE WAS SO MUCH MORE TO SEE 
--------------------------------- 
 
15.  Wrapping up the visit, the INL desk officer observed border 
crossing activities at the Kaplanbek Southern border post with 
Uzbekistan; breakfasted in the Border Guard barracks in Beineu, 
viewed progress on the INL rehabilitation project at the Military 
Institute in Almaty; and was briefed by UNODC on the Central Asia 
Regional Information Coordination Center (CARICC) in Almaty. 
 
ORDWAY

Wikileaks

07ASTANA1110, KAZAKHSTAN: CHEVRON MANAGER DISCUSSES ORENBURG

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Reference ID Created Released Classification Origin
07ASTANA1110 2007-04-26 09:38 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Astana

VZCZCXRO7861
PP RUEHDBU
DE RUEHTA #1110/01 1160938
ZNY CCCCC ZZH
P 260938Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9259
INFO RUCNCIS/CIS COLLECTIVE 0142
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUEBAAA/DEPT OF ENERGY WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001110 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
DEPT FOR EB/ESC; SCA/CEN (O'MARA) 
 
E.O. 12958: DECL: 04/25/2017 
TAGS: ENRG EPET KZ
SUBJECT: KAZAKHSTAN: CHEVRON MANAGER DISCUSSES ORENBURG 
DEAL, KCTS 
 
REF: A. ASTANA 563 
 
     B. 06 ALMATY 2273 
     C. 05 ALMATY 4264 
 
Classified By: Pol-Econ Chief Deborah Mennuti; reasons 1.5 (b) 
and (d). 
 
1. (C) Summary: Luis Coimbra, Marketing and Transportation 
Manager of Chevron's Eurasia Business Unit, briefed Energy 
Officer on April 24 on Chevron's vision for the Kazakhstan 
Caspian Transportation System (KCTS) and the status of the 
Gazprom-KazMunaiGaz (KMG) joint venture to expand the 
Orenburg Gas Processing Plant.  Coimbra contested the 
conventional wisdom that shipping more than 500,000 
barrels/day (b/d) of oil across the Caspian by tanker would 
create congestion and pose safety risks; with the planned 
40-60,000 dead-weight ton (DWT) vessels and state-of-the-art 
mooring technology, he said, the KCTS system could easily 
transport 1.5 million b/d.  On the Orenburg deal, Coimbra 
reported that the Karachaganak Petroleum Operating Company 
(KPO) had finally agreed on a price for the sale of its gas, 
but that the broader negotiations between Gazprom and KMG to 
expand the plant were "falling apart."  Coimbra said that the 
Kazakhstanis were increasingly interested in building a $1.5 
billion gas processing plant near Karachaganak in Kazakhstan. 
 This plant would not only serve Kazakhstan's domestic needs, 
Coimbra said, but potentially feed gas into the 
Central-Asia-Center (CAC) pipeline in a "swap" arrangement, 
freeing Turkmen gas to be exported via a proposed pipeline to 
China.  Coimbra confirmed that TengizChevrOil (TCO) had 
recently concluded a package of agreements for shipping 
second-generation Tengiz oil, including a two-year deal to 
ship approximately 90,000 b/d through the Baku-Tblisi-Ceyhan 
(BTC) pipeline. End Summary. 
 
 
Chevron's KCTS Vision 
--------------------- 
 
2. (C)  Coimbra, TCO's lead negotiator in the KCTS 
discussions,  described the process as "moving very slowly." 
TCO's entry into the negotiations, he said, had "saved a 
dying process," but there were still significant impediments 
to progress, including the Kazakhstanis' desire to consult 
with the Azeris "on every step," and Total's lack of 
efficiency in conducting assigned technical studies. 
Kazakhstan's failure to date to ratify the IGA (Ref A), he 
added, was an additional, looming problem. Among the 
substantive issues to be resolved, the maritime segment 
appeared to be the most complex, with the Azeris promoting 
the use of 12,000 DWT vessels (which the Azeris already 
owned), and the oil companies and the Kazakhstanis favoring 
larger, 40-60,000 DWT tankers.  TCO, Coimbra said, was 
advocating the following compromise: in the initial stages of 
the project, when only Tengiz oil was available, the 12,000 
DWT ships would be used, and would call exclusively at the 
Aktau port, which would be supplied by a spur of the main 
Eskene-Kuryk pipeline.  (This pipeline would initially be 
built to carry one million b/d, expandable to 1.5 million.) 
Later, in anticipation of Kashagan oil production, a second, 
deep-water terminal would be built at Kuryk to accommodate 
the larger vessels. (Coimbra noted that it appeared as though 
the Kazakhstanis were intent on shipping their share of the 
oil -- which would increase when the "cost recovery" phase of 
Tengiz production ended -- by tanker to Iran.  This oil, he 
said, would flow from the KazTransOil terminal in Aktau.) 
 
3. (C) Asked whether the anticipated vessel traffic across 
the Caspian posed serious safety and environmental concerns, 
Coimbra acknowledged that using "fifteen" 12,000 ton vessels 
was not ideal.  However, he said, once the 40-60,000 DWT 
vessels were incorporated, with dynamic positioning systems 
and state-of-the-art loading and unloading facilities, "even 
1.5 million b/d" was feasible without significant risk. 
 
Orenburg Expansion "Falling Apart"? 
----------------------------------- 
 
4. (C) Coimbra informed Energy Officer that KPO had recently 
reached an agreement with KazRozGaz on a long-term price for 
delivery of gas to Orenburg.  (Note: British Gas Deputy Asset 
General Manager Claire Hawkings confirmed on April 13 that 
the two parties had agreed on a short-term price, but told 
Energy Officer that they were still negotiating a formula for 
adapting that price to market prices.  End note.)  However, 
Coimbra said, negotiations between KazMunaiGaz and GazProm on 
 
ASTANA 00001110  002 OF 003 
 
 
the broader terms of the joint venture to expand the Orenburg 
plant were "falling apart."  While many issues remained 
unresolved, he said, one critical one concerned the pricing 
of Kazakhstani gas.  Of the 16 billion cubic meters (bcms) of 
gas which KPO envisioned shipping to Orenburg, he explained, 
half was allocated to the Kazakhstanis:  five for re-export 
to Kazakhstan for domestic use, and another three for sale to 
Europe at $147 / thousand cubic meters (tcm), the price which 
had been announced during the July 2006 G8 Summit.  However, 
Coimbra said, the Kazakhstanis wanted
 to take the five bcms 
needed for domestic use at the front end of the deal, and 
then split the remainder (11.5 bcms) with the Russians for 
sale at $147/tcm.  (Note: Prime Minister Masimov recently 
announced that the Orenburg discussions were near completion, 
and that the Orenburg joint venture could be finalized by 
mid-May.  End note.) 
 
5. (C) Coimbra told Energy Officer that the Kazakhstanis 
appeared to be serious about constructing a five bcm, $1-2 
billion gas processing plant near Karachaganak, on 
Kazakhstani soil.  The plant would be built under terms of 
the KPO Production Sharing Agreement, he said -- and thus KPO 
partners would be able to recover the construction costs. 
The Kazakhstani vision was to reduce gas injection at 
Karachaganak (provided the field engineers confirmed that 
this would have minimal impact on oil production) and thus 
obtain an additional five bcms of gas, beyond the 16 bcms 
destined for Orenburg.  The plant would be designed to be 
easily expanded to process much larger volumes of gas, should 
the Orenburg deal fall through.  (In this "worst case" 
scenario, Coimbra explained, KPO could reinject the gas until 
the proposed gas processing plant could be brought on-line.) 
 
 
6. (C) While the GOK idea was to use the proposed plant to 
serve domestic needs, Coimbra said, there was discussion of 
linking the plant to the nearby Central Asia Center (CAC) gas 
pipeline, and even of using the Karachaganak gas in a "swap" 
operation with Turkmen gas:  five bcms would be pulled from 
the CAC in to supply the proposed pipeline to China;  these 
volumes would then be replaced in the CAC pipeline by 
Karachaganak gas.  Coimbra rated the Chinese gas pipeline 
project as "likely," explaining that, even though Turkmen gas 
supplies might be doubtful, "the Chinese are ready to pay to 
build the whole thing anyway."  Under those terms, he said, 
the project was attractive to the Kazakhstanis, who were 
seeking not only to export gas, but also to supply gas to 
Almaty and other southern population centers. 
 
7. (C) Coimbra mentioned that Chevron was conduction a 
"Caspian area gas utilization study."  One of the feasible 
options being looked at, he said, was to locate a 
gas-to-liquids (GTL) plant in Aktau, and export diesel across 
the Caspian. 
 
Transport Solutions for Second Generation Tengiz Oil 
--------------------------------------------- ------- 
 
8. (C) Coimbra told Energy Officer that TCO had recently 
concluded a series of deals for the transportation of "Second 
Generation" Tengiz production.  Of the 100,000 b/d that would 
be shipped South (by rail to Aktau, then by tanker to Baku), 
he said, around 90,000 b/d would be shipped onward via the 
BTC pipeline, with the remainder sent by rail from Baku to 
both the Batumi and Kulevi terminals on the Black Sea. 
Coimbra indicated that TCO had signed a two-year deal with 
BTC, obtaining a "favorable" $3.50 / barrel "third party" 
price, rather than the $7 / barrel "owners' rate."  (In 
addition to shipping oil South, TCO will send second 
generation oil North, by rail to Odessa.  Refs B,C.) 
 
9. (C)  Coimbra confirmed media reports of a growing rivalry 
between the SOCAR-owned Kulevi terminal and the Batumi 
terminal, now partially-owned by KMG, suggesting that the 
Batumi terminal now looked far less profitable than when KMG 
had bought its stake.  (Note: In a March 13 conversation with 
Energy Officer, KazTransOil Executive Director Sabr 
Yessimbekov admitted that Kulevi appeared destined to be the 
principal oil-export terminal on the Black Sea.  KMG was 
adapting, Yessimbekov explained, by pursuing a deal to 
construct a 5-7 million ton oil refinery adjacent to the 
Batumi terminal, with an eye toward eventually exporting 
refined products from the Batumi terminal -- effectively 
ceding the crude export market to Kulevi.  End note.) 
 
Regional Pipelines: Keen Interest in BTC Expansion 
 
ASTANA 00001110  003 OF 003 
 
 
--------------------------------------------- ----- 
 
10. (C) Coimbra informed Energy Officer that pre-FID (Final 
Investment Decision) work was underway on BTC expansion, with 
approval by partners targeted for early 2008.  In order to 
make any progress on expansion, he confided, those BTC Co. 
partners with Caspian volumes to ship (like Chevron) would 
likely have to compensate those partners which did not. 
Coimbra added that Chevron, Exxon, and Shell were forming a 
consortium and performing pre-FID work for "another (35 
million ton) Baku-Supsa" pipeline.  The ongoing problems with 
the existing Baku-Supsa line (which has been down since 
November), he said, along with a longer and larger projected 
plateau for Azeri oil production, was driving increased 
interest in both BTC expansion and the second Baku-Supsa 
pipeline.  ExxonMobil and Shell were logical partners for the 
second Baku-Supsa project, he noted, because neither had BTC 
pipeline access. 
 
11. (C) Comment:  The fact that Coimbra judges the prospects 
of KPO building a gas processing plant near Karachaganak to 
be realistic is interesting.  The presence of gas processing 
infrastructure at that site, which could be expanded 
relatively cheaply when KPO's deal to supply gas to Orenburg 
expires (if, indeed, it is ever finalized), would contribute 
significantly to prospects for a Trans-Caspian gas pipeline. 
End Comment. 
ORDWAY

Wikileaks

07ASTANA1104, KAZAKHSTAN: ANOTHER DELAY IN PASSING AML LAW

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Reference ID Created Released Classification Origin
07ASTANA1104 2007-04-26 09:21 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO7839
RR RUEHAST
DE RUEHTA #1104 1160921
ZNR UUUUU ZZH
R 260921Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9251
INFO RUEHAST/USOFFICE ALMATY
RUEATRS/DEPT OF TREASURY WASH DC//IET//

UNCLAS ASTANA 001104 
 
SIPDIS 
 
STATE FOR INL/AAE (ALTON), INL/C, SCA/CEN (O'MARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR ASEC PREL KCOR KCRM PREL KZ
SUBJECT: KAZAKHSTAN: ANOTHER DELAY IN PASSING AML LAW 
 
Ref: A) 05 ALMATY 4353, B) 06 ASTANA 689, C) 06 ALMATY 1437 
 
1. Summary: The extension of the property legalization period until 
August 1 will cause yet another delay in the enactment of the 
anti-money laundering and counter terrorism financing law (AML) 
currently under consideration in the Kazakhstani Mazhilis (lower 
house of parliament).  The postponement of the AML legislation is 
the third delay in strengthening of the AML regime and the creation 
of the Kazakhstani Financial Intelligence Unit.  End summary. 
 
------------------------------------- 
THREE ROUNDS OF PROPERTY LEGALIZATION 
------------------------------------- 
 
2.  President Nazarbayev signed amendments to the property 
legalization law in late March 2007 extending the property amnesty 
campaign until August 1 and registration of title until November 1. 
The extension was caused by a surge of last-minute filings for 
legalization and a concern that the commissions which must process 
the claims would have insufficient time to do so.  The amendments 
also provide an exemption from responsibility for public officers 
who legalize their assets within the property amnesty campaign. 
 
3.  Nazarbayev is reported to have said that the term of property 
legalization will not be extended again and this is the last chance 
for Kazakhstanis to legalize their property.  The value of legalized 
property to date is more than $2 billion, which is four times more 
than during first wave of legalization in 2001.  A total of around 
1.4 million people submitted requests for legalization.  About 80 
decisions of the legalization commission were annulled by the 
General Procurator's Office due to violations of the legalization 
rules.  The Prime Minister directed oblast akims to relieve members 
of legalization commissions of their regular duties in order to 
allow them to clear the backlog of requests for legalization. 
 
4.  Legalization of property (and the first delay in AML 
legislation) began with the enactment of the Property Legalization 
Law on July 5, 2006.  The law was to expire at the end of December 
2006 but was extended (creating a further delay in AML law) in order 
to provide more time for asset owners to register their property. 
The assets which were obtained since independence are widely 
believed to have been acquired illegally during the privatization 
period.  The law was to legalize a wide range of property and 
assets, including real property, capital assets, movable property, 
and securities.  The law allows owners to register these assets 
without penalty; however, the subjects of legalization must pay a 
fee of 10% of the assessed value of the amnestied property. One of 
several Property Legalization Commissions must approve all requests 
for registration. 
 
5.  On November 17, 2006, the President signed legislation extending 
the Property Legalization act until April 1, 2007.  Nazarbayev said 
a three-month extension of the legalization period was necessary 
because of confusion on how the law was being implemented and the 
resulting need to better inform the public (Ref B). 
 
------------------------- 
THEN, PERHAPS, AN AML LAW 
------------------------- 
 
5.  Financial Police officials told INL Officer that the extension 
of the property legalization law will again delay the enactment of 
AML legislation.  This is because once the AML law is in force, 
attempts to register previously unrecorded assets would be 
considered prima facie evidence that some type of financial 
malfeasance took place which could put the owner of those assets at 
risk of prosecution. 
 
6.  The AML draft legislation was originally introduced to the 
Mazhilis in September 2005 but was immediately delayed by deputies 
who claimed the structure of the legislation required further review 
(Ref A).  Subsequently, during a study tour by members of the 
Mazhilis AML Working Group to Copenhagen, post heard concerns about 
the powerful role in AML and the FIU accorded to the Procurator 
General's Office (Ref C).  Now the draft legislation has been 
repeatedly delayed by the property legalization campaign. 
 
7. Comment:  While Post would like to see AML legislation enacted in 
order to create the basis for monitoring suspicious transactions and 
large cash flows (both concerns in a illegal drug transit country), 
it is also important that Kazakhstan complete the property 
legalization process in order to preclude a rash of lawsuits to 
determine the rightful owners of property that changed hands during 
the murky privatization deals of the 1990s.  End comment. 
 
ORDWAY

Wikileaks

07ASTANA1095, KAZAKHSTAN: FINANCE MINISTER CONFIRMS

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Reference ID Created Released Classification Origin
07ASTANA1095 2007-04-26 03:39 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7472
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1095/01 1160339
ZNR UUUUU ZZH
P 260339Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9236
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0140
RUEHAST/USOFFICE ALMATY PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY 0030
RUEAADN/DTRA DULLES WASH DC PRIORITY

UNCLAS SECTION 01 OF 02 ASTANA 001095 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN (M.O'MARA), SCA/RA (A. CUMMINGS) 
PLEASE PASS TO DTRA 
SECDEF WASHINGTON DC//ASD-ISP/TSP-CP/CTR 
SECDEF WASHINGTON DC//ATSD/NCB/CT/TR 
 
E.O. 12958: N/A 
TAGS: PARM PREL KNNP KZ
SUBJECT: KAZAKHSTAN: FINANCE MINISTER CONFIRMS 
APPROVAL OF CTR CONTRACTS 
 
REF: ASTANA 974 AND PREVIOUS 
 
ASTANA 00001095  001.2 OF 002 
 
 
1. (SBU) Minister of Finance Korzhova sent a letter to the 
Ambassador on April 17 confirming that the interagency 
commission established to review Cooperative Threat Reduction (CTR) 
value-added tax exemption (VAT) claims for subcontractors has 
recommended the approval of nine of ten pending contracts.  Post 
submitted five of the contracts.  The only contract not approved 
covers consulting services and was set aside for further review. 
 
2. (SBU) Informal Embassy translation as follows: 
 
Dear Mr. Ordway, 
The Ministry of Finance of the Republic of Kazakhstan presents to 
you its compliments and upon review of your letter of April 9, 2007, 
regarding the validity of applying the Agreement between the United 
States of America and the Republic of Kazakhstan Concerning the 
Destruction of Silo Launchers of  Intercontinental Ballistic 
Missiles, Emergency Response, and the Prevention of Proliferation of 
Nuclear Weapons of December 13, 1993 (hereinafter, " the Agreement 
") to subcontracts established under the Cooperative Threat 
Reduction Program, wishes to inform you of the following: 
Decree No. 271 of the Government of the Republic of Kazakhstan dated 
April 5, 2007, has formed a special Republic of Kazakhstan 
Consultative and Advisory Government Body, the Interagency 
Commission (hereinafter, " IC"), for the purpose of administering 
the activities performed pursuant to the Agreement. The IC has 
convened on April 12 and 13 to review the subcontracts listed below, 
which the RK MFA has submitted for exemption from taxes, fees, and 
customs duty as specified in articles IX and XII of the Agreement. 
 
Contract DTRA 01-03-?-0058/01 with Degelen LLC dated September 1, 
2003,  for $ 257, 888.00; 
Contract DTRA 04-?-0018/1  with Degelen LLC dated 19 May 2004 ???? 
for $ 746,866. 00; 
Contract DTRA 1-04-? 0024/1 with Degelen LLC dated 5 July  2004 for 
$ 223,946.00; 
Contract DTRA 1-05-?-0036/1 with Degelen LLC dated 15 September 2005 
for $ 3,500,000; 
Contract DTRA1 1-05-?-0036/1 with Degelen LLC dated 15 September 
2005 for $ 3,500,000; 
Contract  DTRA 24914-?02-F??-?000-00001 with Alef Company LLC for $ 
941,168.87; 
Contract  ? 24914-202-F?4-?00Y-00004 with Sani LLC for $52,000.00; 
Contract ? 24914-202-F??-??00-00002 with Mir Zhilya LLC for $ 
48,699.00; 
Contract ? 24914-235-F??-??00-00001 with Stepnogorsk Invest for 
$34,000.00; 
Contract ? 24914-225-??4-?X00-00001 with the Non-proliferation 
Support Center for $6,820.00. 
In reference to the first nine contracts, the IC has decided to 
consider these contracts as meeting the criteria set by the 
Agreement, including the provisions for exemptions, and to submit 
this decision to the appropriate authorities. In regards to the 
contract established between the Non-proliferation Support Center 
(ISC) and Bechtel International Systems (BIS), the Commission has 
withheld from making a determination until additional information is 
obtained from the Ministry of Energy and Mineral Resources of the 
Republic of Kazakhstan. 
Availing of this occasion, I wish to renew my assurances of my 
respect for you, and I look forward to our continued fruitful 
cooperation. 
Respectfully, 
/signed/ 
 
Minister N. Korzhova 
 
End text 
 
3. (SBU) Comment: Minister Korzhova's confirmation letter indicates 
that success is close at hand.  We now only await Prime Minister 
Masimov's final approval, which should be a formality given his 
support for the program.  While work is left to be done to ensure 
that the VAT exemption process functions more efficiently in the 
future, the Kazakhstanis have now created the necessary conditions 
for work to resume on stalled CTR projects. End comment. 
 
ORDWAY 
 
 
 
 
 
 
ASTANA 00001095  002.2 OF 002 
 
 
1 Translator's Note: This no. 5 was present in the original as a 
repeat of no. 4.

Wikileaks

07ASTANA1094, NEW HEAD OF FINANCIAL POLICE ACADEMY IN

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Reference ID Created Released Classification Origin
07ASTANA1094 2007-04-26 03:39 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7468
PP RUEHAST
DE RUEHTA #1094 1160339
ZNR UUUUU ZZH
P 260339Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9235
INFO RUEHAST/USOFFICE ALMATY
RUEKJCS/SECDEF WASHINGTON DC//USDP EURASIA//
RUEATRS/DEPT OF TREASURY WASHDC//IET//
RUEAWJA/DEPT OF JUSTICE WASHDC

UNCLAS ASTANA 001094 
 
SIPDIS 
 
DEPT FOR SCA/CEN (OMARA), INR, INL/AAE (ALTON) 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: SNAR KCOR KCRM KZ
SUBJECT: NEW HEAD OF FINANCIAL POLICE ACADEMY IN 
 KAZAKHSTAN 
 
 
1. (U) Summary: On March 29, the Chairman of the Financial Police 
appointed Major-General Ramazan Tleuhan to head the Kazakhstani 
Financial Police Academy located near Astana.  The new Head of 
Financial Police Academy replaces Colonel/Professor of the Financial 
Police Academy, Marat Kogamov.  End summary. 
 
------------------------------------- 
NEW HEAD OF FINANCIAL POLICE ACADEMY 
------------------------------------- 
 
2. (U) Chairman of the Agency on Combating Economic and Corruption 
Crimes (the Financial Police), Sarybai Kalmurzayev, appointed 
Ramazan Tleuhan to head the Financial Police Academy on March 29. 
Since February 2006, Tleuhan worked as the Head of the Department on 
Combating Economic and Corruption Crimes in Western Kazakhstan 
Region (WKR). Prior to that Tleuhan was the Head of the Department 
on Detection and Prevention of Corruption Cases of the Financial 
Police. In previous years Tleuhan worked in different positions 
including as the Advisor to the Chairman of the Financial Police in 
2005.  In 1978 he obtained his degree in law at Kazakhstani State 
University named after S. Kirov. 
 
------------------------------------ 
TLEUHAN'S INVOLVEMENT IN CONTROVERSY 
------------------------------------ 
 
3. (SBU) In 2006, Tleuhan was involved in a conflict between three 
law enforcement agencies in the WKR that generated charges and 
counter-charges of corruption by each agency.  The conflict caused 
considerable public stir and was widely covered by media.  The 
conflict broke out between the regional departments of Financial 
Police on one side and the Procurator General's Office and the 
Committee for National Security (KNB) on the other.  The KNB 
launched a criminal case against Tleukhan for misappropriation of 
state property after the Financial Police opened a criminal case 
against the Deputy Regional Procurator, the Uralsk Procurator and 
the head of the KNB department.  Furthermore, then KNB department 
head Nurmuhamedov accused Tleukhan of links to criminal elements. 
As a result of this conflict, all the heads of the three law 
enforcement agencies in WKR were fired for failing to perform their 
official duties and for violating the law.  (Note: The case is still 
under investigation so the facts regarding the guilt of the 
individuals have not been established.  Given that the KNB is 
involved, the facts may never come to light.  End note.) 
 
------------------------------------- 
KOGAMOV MOVES TO THE SECURITY COUNCIL 
------------------------------------- 
 
4. (U) Colonel of Financial Police Marat Kogamov became the Head of 
the Financial Police Academy in May 2001 and served in this post 
through June 2003. He was re-appointed in October 2004 and remained 
in the position until replaced by Tleuhan.  He has now been 
appointed as a Senior Inspector of the Security Council of 
Kazakhstan. 
 
 
------- 
COMMENT 
------- 
 
5. (SBU) While post regrets the departure of Kogamov, an excellent 
interlocutor who actively advanced anti-money laundering and 
anti-corruption cooperation with the U.S., initial communication 
with Tleuhan gives hope that close cooperation with the Financial 
Police Academy will continue. 
 
ORDWAY

Wikileaks

07ASTANA1074, KAZAKHSTAN ECONOMIC AND ENERGY UPDATE,

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Reference ID Created Released Classification Origin
07ASTANA1074 2007-04-26 03:19 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO7443
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1074/01 1160319
ZNR UUUUU ZZH
R 260319Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9217
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0138
RUEHAK/AMEMBASSY ANKARA 2042
RUEHBUL/AMEMBASSY KABUL 0317
RUEHNE/AMEMBASSY NEW DELHI 0447
RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 001074 
 
SIPDIS 
 
DEPT FOR SCA/CEN (O'MARA) 
DEPT PASS TO OPIC - BALLINGER 
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER 
DEPT PASS TO AID - EE-PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS 
USDOC FOR 6110/ITA/TD/BI/RHALPERN 
ANKARA FOR CFC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ENRG EPET EFIN KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, 
 April 1 - 14, 2007 
 
 
ASTANA 00001074  001.2 OF 002 
 
 
1.  Summary: This information is drawn primarily from the 
Kazakhstani local press, and has not been checked for accuracy.  The 
opinions and policies expressed in this report are those of the 
authors, not the U.S. Government. 
 
-- Nazarbayev Meets Lord Mayor of London 
-- 30 Leading Corporations to Modernize Economy 
-- Finance Ministry's Press Release on 
 Negotiations with  IRS 
-- Economic Statistics 
-- KMG Sells 50% of KazGerMunay to Subsidiary 
-- Kazakhstan Eyes Stake in Burgas-Alexandroupolis Project 
-- Kazakhstan to Increase Uranium Supplies to Japan 
-- Oil & Gas Production, Q1 2007 
 
 
 
Nazarbayev Meets Lord Mayor of London 
------------------------------------- 
 
2.  On March 30, President Nazarbayev met in Astana with Lord Mayor 
of the City of London John Stuttard.  According to Stuttard, the two 
countries' comparative advantages --Kazakhstan's natural resources 
and Great Britain's experience in developing financial markets, 
services, and education -- should be pooled to bring about fruitful 
partnership and cooperation.  Currently, seven Kazakhstani companies 
are listed on the London Stock Exchange (LSE), and nine others trade 
their securities on the LSE's Alternative Investment Market (AIM). 
(Interfax-Kazakhstan, April 2) 
 
30 Leading Corporations to Modernize Economy 
-------------------------------------------- 
 
3.  In an April 9 interview, President Nazarbayev said that in order 
to diversify the economy, the Government of Kazakhstan will choose 
the 30 best Kazakhstan-based companies.  These corporate leaders are 
expected to develop new industries, making the economy more 
competitive and globally integrated.  The recently created 
Commission on Economic Modernization would facilitate these 
companies' efforts.  (President's Press-Service, April 10) 
 
Finance Ministry's Press Release on Negotiations with IRS 
--------------------------------------------- ---- 
4.  The Finance Ministry issued on April 4 a press release about the 
late-March negotiations between the Ministry's Tax Committee and a 
high-level IRS delegation.  The press release notes that the 
meetings were the first mutual agreement process negotiations in the 
history of Kazakhstan.  The press release further states that the 
talks focused on the issue of double-taxation of the U.S.-based 
Parker Drilling Company.  According to the press release, the 
Kazakhstani side declared at the meetings' conclusion that its 
position -- that the income in question was earned and subject to 
tax in Kazakhstan -- remains unchanged.  (Interfax-Kazakhstan, April 
5) 
 
 
 
Economic Statistics 
------------------- 
 
5.  According to a statement released by the National Bank, 
Kazakhstan's 2006 current account deficit was $1.797 billion, up 
from $1.056 billion in 2005, a 70% increase.  According to the 
National Bank Chairman Anvar Saidenov, the large increase is a 
result of the foreign worker legalization campaign: starting in 
2006, wages paid to illegal migrants were included in the current 
account. (Interfax-Kazakhstan, April 3) 
 
6.  In January-March 2007, the total trade volume at Kazakhstan's 
financial exchanges, the Kazakhstani Stock Exchange (KSE) and the 
special trading floor of the Regional Financial Center of Almaty 
(RFCA), amounted to 8,342.3 trillion tenge (about $66.8 billion), a 
140% increase over the same period of 2006.  While most of the trade 
volume was in the currency market, trade in securities has increased 
significantly.  Over the same period last year, trade in stocks (at 
 
ASTANA 00001074  002.2 OF 002 
 
 
$793.5 million) increased 180%; in corporate bonds (at $1.1 billion) 
25%; and in government debt (at $2.0 billion) 100%. 
(Interfax-Kazakhstan, April 5) 
 
KMG Sells 50% of KazGerMunay to Subsidiary 
------------------------------------------ 
 
7.  On April 12, the shareholders of national oil and gas company 
KazMunayGas (KMG) subsidiary KMG Exploration & Production (KMG E&P) 
have approved the purchase of a 50% share in KazGerMunay, owned by 
the parent company, for KZT 133.3 billion (about $1.1 billion).  The 
purchase will be paid from the company's own funds.  After the 
purchase, KMG E&P will become Kazakhstan's second largest oil 
producer (behind TengizChevrOil).  In late July last year KMG 
acquired a 50% share in KazGerMunay from RWE Dea AG, EEG
- Erdgas 
Erdol GmbH and the International Financial Corporation.  KMG E&P's 
partner in the joint venture is PetroKazakhstan.  (Interfax - 
Kazakhstan, April 12) 
 
Kazakhstan Eyes Stake in Burgas-Alexandroupolis Project 
--------------------------------------------- ---- 
 
8.  Kazakhstan seeks a stake in the Burgas-Alexandroupolis oil 
pipeline project, Kazakhstani Energy Minister Izmukhambetov told the 
press in Baku on April 4.  According to the Minister, a tentative 
understanding has been reached in which Kazakhstan will get part of 
Greece and Bulgaria's combined 49% stake in the project. 
Izmukhambetov added that, given the launch of the 
Burgas-Alexandroupolis project, it is necessary to speed up a 
decision on expansion of the Caspian Pipeline Consortium pipeline. 
(Interfax - Kazakhstan, April 9) 
 
Kazakhstan to Increase Uranium Supplies to Japan 
--------------------------------------------- --- 
 
9.  Kazakhstan's national atomic company KazAtomProm (KAP) will 
capture over 40% of Japan's nuclear fuel market by 2010, with plans 
to deliver approximately 4,000 tons of uranium per annum, KAP 
President Dzhakishev said at a briefing on April 14 in Almaty. 
Currently KAP supplies 3-4% of Japan's uranium needs.  According to 
the KAP President, these plans will become possible after the 
company signs a series of documents during a visit of Japanese 
officials and companies to Astana on April 29-30.  Some 
Kazakhstani-Russian joint ventures, specifically one for uranium 
enrichment, would be involved in supplying Japan's market, Mr. 
Dzhakishev revealed.  (Interfax - Kazakhstan, April 16) 
 
Oil & Gas Production, Q1 2007 
----------------------------- 
 
10.  In January-March Kazakhstan produced 16.6 million tons of oil 
and gas condensate, 10.8% higher than during the same period in 
2006, according to the GOK reports.  Of the 16.6 million tons, 
national oil and gas company KazMunayGas (KMG) produced 2.3 million 
tons of oil and gas condensate, while other companies with KMG 
participation produced 6.3 million tons of oil.  The TengizChevrOil 
joint venture was the largest producer, with 3.6 million tons during 
the period.  (Interfax - Kazakhstan, April 9) 
 
11.  In January-March Kazakhstan produced 7.3 billion cubic meters 
of gas, 17.8% higher than the first quarter of 2006, the GOK 
reported.  (Interfax - Kazakhstan, April 9) 
 
ORDWAY

Wikileaks

07ASTANA1063, KAZAKHSTAN INVESTIGATES DEATH OF SEALS

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Reference ID Created Released Classification Origin
07ASTANA1063 2007-04-25 14:54 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6766
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1063 1151454
ZNR UUUUU ZZH
R 251454Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9202
INFO RUCNCIS/CIS COLLECTIVE 0137
RUEHAK/AMEMBASSY ANKARA 2041
RUEHAST/USOFFICE ALMATY

UNCLAS ASTANA 001063 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON SENV ENRG EPET KZ
SUBJECT: KAZAKHSTAN INVESTIGATES DEATH OF SEALS 
 
 
1. Summary:  Nearly 700 dead seals have been found on the shores of 
the Caspian Sea in Kazakhstan's Mangystau Oblast since the end of 
March.  Kazakhstan's Ministry of Environment has established an 
interagency commission to investigate the deaths, but no final 
conclusions have been reached.  Local ecologists claimed that an 
early ice melt caused the deaths, a theory supported by the Ministry 
of Environment.  In its preliminary report, however, the Ministry of 
Education attributed the deaths to a virus outbreak.  The Mangystau 
Oblast is the center of Kazakhstan's petroleum operations, but no 
evidence exists linking the deaths to toxic emissions from the oil 
fields.  End summary. 
 
2. On March 30, 21 dead seals were found on the shore of the Caspian 
Sea in the Tyupkaragan district of the Mangystau oblast. Similar 
discoveries have been made throughout the month of April.  By April 
25, the number of dead seals had reached 674, including 524 baby 
seals, and continues to grow. 
 
3. In early April, an interagency commission established by the 
Ministry of Environment traveled to the Mangystau Oblast to 
investigate the seal deaths.  Local experts blamed the deaths on an 
unseasonably warm winter.  According to Marat Orynbasarov, Deputy 
Head of the Mangystau Department for Environment Protection, seals 
usually rear their offspring on ice but were forced to shore this 
year because of an early ice-melt.  Once ashore, the seals were not 
able to find sufficient fodder to feed their calves, leaving them 
weak and underfed. On April 10, the Ministry of Environment released 
a public statement in which it affirmed that weather was a likely 
cause for the seal deaths. 
 
4. A different theory was offered by scientists from the Ministry of 
Education and Science's Research Institute for Biological Safety on 
April 11.  In their preliminary report, the scientists posited that 
Phocine Distemper Virus, or "seal plague," may be the cause of the 
deaths.  The virus killed 12,000 seals in the Caspian in 2000.  The 
interagency commission investigating the deaths has not yet endorsed 
either theory and continues its inquiry. 
 
5. Some experts also believed that the deaths might be connected to 
the discharge of pollutants because of the significant petroleum 
extraction activity in the Mangystau Oblast.  In April 2006, 337 
seals died because of pollutant discharge from Caspian oil wells. 
In this instance, however, pollution seems not to have played a 
role.  The Mangystau regional center for sanitary and 
epidemiological control examined the seals and found that no sign of 
excessive heavy metals or pesticides in their systems.  Seawater 
tests also did not reveal any oil products. 
 
ORDWAY

Wikileaks

07ASTANA1062, KAZAKHSTAN: PARTICIPATION IN THE FORMAL SIGNING OF THE

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Reference ID Created Released Classification Origin
07ASTANA1062 2007-04-25 14:53 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6764
PP RUEHAST
DE RUEHTA #1062 1151453
ZNR UUUUU ZZH
P 251453Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9201
INFO RUEHAST/USOFFICE ALMATY
RUEKJCS/SECDEF WASHDC 0029
RUEHGB/AMEMBASSY BAGHDAD 0017
RUEHEG/AMEMBASSY CAIRO 0077

UNCLAS ASTANA 001062 
 
SIPDIS 
 
DEPT FOR NEA/I (K. TAECKER) 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EAID EFIN PGOV PREL UN KZ
SUBJECT: KAZAKHSTAN: PARTICIPATION IN THE FORMAL SIGNING OF THE 
INTERNATIONAL COMPACT WITH IRAQ 
 
REF: STATE 47346 
 
1. (U) On April 25, the Government of Kazakhstan informed Post via 
diplomatic note that Ambassador Bagdad Amreyev, Kazakhstan's 
Ambassador to Egypt, will attend the signing of the International 
Compact with Iraq on May 3 in Egypt. 
 
2. (SBU) Sergey Savelyev of the MFA's International Security 
division informed Pol-Econ Chief that the Kazakhstani delegation 
would be in listening mode at the event, as the GOK is still 
familiarizing itself with the Compact. 
 
ORDWAY

Wikileaks

07ASTANA1061, KAZAKHSTAN RESOLVES TO IMPROVE TIP RESPONSE

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Reference ID Created Released Classification Origin
07ASTANA1061 2007-04-25 10:24 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6316
PP RUEHAST
DE RUEHTA #1061/01 1151024
ZNR UUUUU ZZH
P 251024Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9199
INFO RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 001061 
 
SIPDIS 
 
DEPT FOR G/TIP (HALL), INL/AAE (ALTON), SCA/CEN (OMARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR PINT KCRM KZ
SUBJECT: KAZAKHSTAN RESOLVES TO IMPROVE TIP RESPONSE 
 
REF: 06 ASTANA 368 
 
1.  Summary:  On April 3-4, Kazakhstani judges, police officers, and 
prosecutors brought together under an INL program to review Spring 
2006 Anti-TIP legislation for a second time resolved to propose 
further improvements in anti-trafficking laws, including legislation 
to cover human exploitation; allow for provision of government 
financial assistance to victims; and increase the criminal penalty 
for trafficking, operating a trafficking business, or facilitating 
trafficking.  The group recommended non-legislative approaches as 
well, including expanded public outreach to warn of the dangers of 
TIP; expanded anti-TIP cooperation between NGOs and domestic law 
enforcement, within Kazakhstan's police forces, and between police 
forces of source, transit, and destination countries; and continued 
dialogue between legislators, police, NGOs, and civil society.  If 
the thoughts of the mid-level law enforcement, government officials, 
and NGO participants are any indication, the government of 
Kazakhstan continues to place great emphasis on combating TIP.  The 
GOK devotes human and financial resources to create the 
institutional structures and social attitudes necessary to solve 
this problem.  Most importantly, the agencies and departments in the 
government are constantly seeking to improve efforts through 
reaching out to tap the expertise of other nations and organizations 
and nurturing Kazakhstani institutions as well. End summary. 
 
2.  In early April, INL and IOM implemented a two-day Anti-TIP 
Legislation Review Conference at the Karaganda MVD Legal Institute 
devoted to the improvement and implementation of anti-trafficking 
legislation in Kazakhstan.  This was the second review (Reftel) that 
aimed to gauge implementation of spring 2006 amendments to 
legislation criminalizing TIP.  Conference participants discussed 
initial outcomes of recent amendments to the anti-trafficking in 
person legislation in Kazakhstan.  Building on the basis that 
trafficking in persons is a crime against human rights stipulated by 
the Constitution of Kazakhstan which threatens the safety of the 
state and its citizens, participants concluded that the GOK has made 
significant efforts over the last year in combating trafficking in 
persons, including new legislation, establishing the anti-TIP 
center, and the creation and implementation of the national plan to 
combat trafficking.  They further assessed that the GOK wants to 
continue to improve measures and methods of combating trafficking 
and other related crimes, and is ready to protect victims of 
trafficking.  The participants reached the following five 
conclusions: 
 
2.1.  The GOK should continue to improve legislation to prosecute 
traffickers and protect victims of trafficking based on analysis of 
actual law enforcement, prosecution, and judicial experience in 
cases of trafficking in persons.  Based on participants' analysis 
and experience, the GOK should develop new or expand existing 
legislation to include: 
 
a) combating other human exploitation such as parents or organized 
crime gangs forcing children to beg; 
b) provision of government assistance (including financial) and 
support to victims of trafficking; 
c) increase the penalty for human trafficking and for promoting 
criminal businesses; 
d) contain the development of illegal businesses that support 
trafficking in persons, such as provision of commercial sex services 
or abetting illegal migration; 
e) strengthen control over legal businesses that may support 
trafficking in persons, such as those providing mediation services 
(including those located abroad), entertainment services, tourist 
services, donor assistance services, marriage services, etc. 
 
2.2.  Prevent trafficking in persons by improving: 
a) detection of TIP crimes, analysis of TIP related information, 
understanding of other needs of targeted groups, methods of public 
outreach to inform these groups about the risks of human 
trafficking, recommendations about how to avoid victimization; 
b) prevention of crimes related to trafficking in persons; 
c) prevention of victimization of potentially targeted groups, 
re-victimization and stigmatization of victims, and intolerance to 
the crimes related to trafficking in persons by informing 
Kazakhstani citizens and visitors about trafficking in persons. 
 
2.3.  Develop cooperation between government agencies in criminal 
prosecution against traffickers in all jurisdictions, including the 
countries of origin, transit and destination; 
 
2.4.  Improve forms and methods of cooperation of government 
agencies, including law enforcement agencies and international and 
non-governmental organizations providing assistance to victims of 
trafficking and facilitating their repatriation and rehabilitation; 
 
2.5.  Continue the dialogue on issues related to improvement of 
legislation and law enforcement practices on detecting and 
investigating cases of trafficking in persons and other related 
crimes. 
 
 
ASTANA 00001061  002 OF 002 
 
 
3.  The conference was hosted by the Karaganda MVD Legal Institute, 
the same location where INL collaborated with the GOK to create an &#x
000A;Anti-TIP Center to train mid-level officers to recognize and combat 
TIP.  The participants included judges, police officers and other 
members of the security services, procurators, academicians, and 
NGOs.  An additional goal of the conference was to encourage 
criminal law and law enforcement specialists to develop educational 
materials and training programs to be included in the curricula of 
law enforcement academies, law institutes and colleges. 
 
------- 
COMMENT 
------- 
 
4.  Conversations on the margins of the legislative review session 
revealed that while understanding is still lacking on how to 
investigate and prosecute a TIP case so the trafficker is 
successfully convicted, the desire to improve is great. 
Furthermore, as officers and prosecutors get more experience about 
what constitutes a proper, legal case against a trafficker, 
conviction rates should rise.  For the time being, trafficking cases 
in Kazakhstan are often prosecuted under other clauses of the 
Criminal Code because of the greater likelihood of getting a 
conviction.  The conviction still puts the criminal behind bars but 
artificially reduces the TIP conviction rate. Post believes that 
with continued training and more collaboration among law enforcement 
agencies, a growing percentage of cases will be prosecuted under TIP 
legislation and will result in convictions. 
 
ORDWAY

Wikileaks

07ASTANA1038, KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, April 1 – 14, 2007

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Reference ID Created Released Classification Origin
07ASTANA1038 2007-04-23 03:48 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3223
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1038/01 1130348
ZNR UUUUU ZZH
R 230348Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9177
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0135
RUEHAK/AMEMBASSY ANKARA 2039
RUEHBUL/AMEMBASSY KABUL 0315
RUEHNE/AMEMBASSY NEW DELHI 0445
RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 001038 
 
SIPDIS 
 
DEPT FOR SCA/CEN (O'MARA) 
DEPT PASS TO OPIC - BALLINGER 
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER 
DEPT PASS TO AID - EE-PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS 
USDOC FOR 6110/ITA/TD/BI/RHALPERN 
ANKARA FOR CFC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ENRG EPET EFIN KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, April 1 - 14, 2007 
 
 
ASTANA 00001038  001.2 OF 002 
 
 
1.  Summary: This information is drawn primarily from the 
Kazakhstani local press, and has not been checked for accuracy.  The 
opinions and policies expressed in this report are those of the 
authors, not the U.S. Government. 
 
-- Nazarbayev Meets Lord Mayor of London 
-- 30 Leading Corporations to Modernize Economy 
-- Finance Ministry's Press Release on Negotiations with  IRS 
-- Economic Statistics 
-- KMG Sells 50% of KazGerMunay to Subsidiary 
-- Kazakhstan Eyes Stake in Burgas-Alexandroupolis Project 
-- Kazakhstan to Increase Uranium Supplies to Japan 
-- Oil & Gas Production, Q1 2007 
 
 
 
Nazarbayev Meets Lord Mayor of London 
------------------------------------- 
 
2.  On March 30, President Nazarbayev met in Astana with Lord Mayor 
of the City of London John Stuttard.  According to Stuttard, the two 
countries' comparative advantages --Kazakhstan's natural resources 
and Great Britain's experience in developing financial markets, 
services, and education -- should be pooled to bring about fruitful 
partnership and cooperation.  Currently, seven Kazakhstani companies 
are listed on the London Stock Exchange (LSE), and nine others trade 
their securities on the LSE's Alternative Investment Market (AIM). 
(Interfax-Kazakhstan, April 2) 
 
30 Leading Corporations to Modernize Economy 
-------------------------------------------- 
 
3.  In an April 9 interview, President Nazarbayev said that in order 
to diversify the economy, the Government of Kazakhstan will choose 
the 30 best Kazakhstan-based companies.  These corporate leaders are 
expected to develop new industries, making the economy more 
competitive and globally integrated.  The recently created 
Commission on Economic Modernization would facilitate these 
companies' efforts.  (President's Press-Service, April 10) 
 
Finance Ministry's Press Release on Negotiations with IRS 
--------------------------------------------- ---- 
4.  The Finance Ministry issued on April 4 a press release about the 
late-March negotiations between the Ministry's Tax Committee and a 
high-level IRS delegation.  The press release notes that the 
meetings were the first mutual agreement process negotiations in the 
history of Kazakhstan.  The press release further states that the 
talks focused on the issue of double-taxation of the U.S.-based 
Parker Drilling Company.  According to the press release, the 
Kazakhstani side declared at the meetings' conclusion that its 
position -- that the income in question was earned and subject to 
tax in Kazakhstan -- remains unchanged.  (Interfax-Kazakhstan, April 
5) 
 
 
 
Economic Statistics 
------------------- 
 
5.  According to a statement released by the National Bank, 
Kazakhstan's 2006 current account deficit was $1.797 billion, up 
from $1.056 billion in 2005, a 70% increase.  According to the 
National Bank Chairman Anvar Saidenov, the large increase is a 
result of the foreign worker legalization campaign: starting in 
2006, wages paid to illegal migrants were included in the current 
account. (Interfax-Kazakhstan, April 3) 
 
6.  In January-March 2007, the total trade volume at Kazakhstan's 
financial exchanges, the Kazakhstani Stock Exchange (KSE) and the 
special trading floor of the Regional Financial Center of Almaty 
(RFCA), amounted to 8,342.3 trillion tenge (about $66.8 billion), a 
140% increase over the same period of 2006.  While most of the trade 
volume was in the currency market, trade in securities has increased 
significantly.  Over the same period last year, trade in stocks (at 
$793.5 million) increased 180%; in corporate bonds (at $1.1 billion) 
25%; and in government debt (at $2.0 billion) 100%. 
 
ASTANA 00001038  002.2 OF 002 
 
 
(Interfax-Kazakhstan, April 5) 
 
KMG Sells 50% of KazGerMunay to Subsidiary 
------------------------------------------ 
 
7.  On April 12, the shareholders of national oil and gas company 
KazMunayGas (KMG) subsidiary KMG Exploration & Production (KMG E&P) 
have approved the purchase of a 50% share in KazGerMunay, owned by 
the parent company, for KZT 133.3 billion (about $1.1 billion).  The 
purchase will be paid from the company's own funds.  After the 
purchase, KMG E&P will become Kazakhstan's second largest oil 
producer (behind TengizChevrOil).  In late July last year KMG 
acquired a 50% share in KazGerMunay from RWE Dea AG, EEG - Erdgas 
E
rdol GmbH and the International Financial Corporation.  KMG E&P's 
partner in the joint venture is PetroKazakhstan.  (Interfax - 
Kazakhstan, April 12) 
 
Kazakhstan Eyes Stake in Burgas-Alexandroupolis Project 
--------------------------------------------- ---- 
 
8.  Kazakhstan seeks a stake in the Burgas-Alexandroupolis oil 
pipeline project, Kazakhstani Energy Minister Izmukhambetov told the 
press in Baku on April 4.  According to the Minister, a tentative 
understanding has been reached in which Kazakhstan will get part of 
Greece and Bulgaria's combined 49% stake in the project. 
Izmukhambetov added that, given the launch of the 
Burgas-Alexandroupolis project, it is necessary to speed up a 
decision on expansion of the Caspian Pipeline Consortium pipeline. 
(Interfax - Kazakhstan, April 9) 
 
Kazakhstan to Increase Uranium Supplies to Japan 
--------------------------------------------- --- 
 
9.  Kazakhstan's national atomic company KazAtomProm (KAP) will 
capture over 40% of Japan's nuclear fuel market by 2010, with plans 
to deliver approximately 4,000 tons of uranium per annum, KAP 
President Dzhakishev said at a briefing on April 14 in Almaty. 
Currently KAP supplies 3-4% of Japan's uranium needs.  According to 
the KAP President, these plans will become possible after the 
company signs a series of documents during a visit of Japanese 
officials and companies to Astana on April 29-30.  Some 
Kazakhstani-Russian joint ventures, specifically one for uranium 
enrichment, would be involved in supplying Japan's market, Mr. 
Dzhakishev revealed.  (Interfax - Kazakhstan, April 16) 
 
Oil & Gas Production, Q1 2007 
----------------------------- 
 
10.  In January-March Kazakhstan produced 16.6 million tons of oil 
and gas condensate, 10.8% higher than during the same period in 
2006, according to the GOK reports.  Of the 16.6 million tons, 
national oil and gas company KazMunayGas (KMG) produced 2.3 million 
tons of oil and gas condensate, while other companies with KMG 
participation produced 6.3 million tons of oil.  The TengizChevrOil 
joint venture was the largest producer, with 3.6 million tons during 
the period.  (Interfax - Kazakhstan, April 9) 
 
11.  In January-March Kazakhstan produced 7.3 billion cubic meters 
of gas, 17.8% higher than the first quarter of 2006, the GOK 
reported.  (Interfax - Kazakhstan, April 9) 
 
ORDWAY

Wikileaks

07ASTANA1033, KAZAKHSTAN: ALMATY NOTES, MARCH – APRIL 2007

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Reference ID Created Released Classification Origin
07ASTANA1033 2007-04-20 11:13 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO1998
RR RUEHAST RUEHDBU
DE RUEHTA #1033/01 1101113
ZNR UUUUU ZZH
R 201113Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 9169
INFO RUEHVEN/USMISSION USOSCE 1718
RUEHEK/AMEMBASSY BISHKEK 7942
RUEHNT/AMEMBASSY TASHKENT 7876
RUEHAH/AMEMBASSY ASHGABAT 7149
RUEHDBU/AMEMBASSY DUSHANBE 2090
RUEHMO/AMEMBASSY MOSCOW 1397
RUEHAST/USOFFICE ALMATY
RUEHNO/USMISSION USNATO 2196

UNCLAS SECTION 01 OF 03 ASTANA 001033 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL KZ
SUBJECT: KAZAKHSTAN: ALMATY NOTES, MARCH - APRIL 2007 
 
REF:  Astana 834 
 
1. (U) The "Almaty Notes" series is intended to maintain focus on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital" following the move of the Embassy to 
Astana. 
 
Aftermath of the Conflict in Kazatkom 
------------------------------------- 
 
2. (U) Following the conflict between Kazakhs and Chechens in 
Kazatkom (reftel), some mass media published articles blaming the 
government and Chechens for the conflict.  For example, MP Alikhan 
Baymenov was quoted in the Zhas Qazaq newspaper on March 30 as 
stating that the "Makhmakhanovs had connections among those who 
exploit the country's subsoil resources.  Wealthy people exploit 
organized criminal rings for their purposes.  A member of the 
Makhmakhanov family is reportedly suspected of murder."  In the same 
issue, another MP, Nurtay Sabilyanov, criticized the leader of the 
Chechen community in Kazakhstan, Akhmed Muradov, who allegedly 
placed the blame on Kazakhs.  Sabilyanov said "What future are we 
facing if such individuals sit in the Senate?" referring to 
President Nazarbayev's recent recommendation to reserve some seats 
in the Senate for representatives of ethnic minorities. 
 
3. (U) On April 5, members of the "Bolashak" (Future) national youth 
movement attempted to organize a mass action by placing a wreath to 
the tomb of Bakytzhan Bugutov, who died in the Kazatkom conflict. 
The Almaty police prevented the action. 
 
4. (U) The government has taken some measures to put an end to 
heated discussions of the Kazatkom conflict and to prevent any 
negative consequences.  On April 4, Vice Minister of Interior Alik 
Shpekbayev said in an interview with the Liter daily that "the 
conflict was of regular and criminal nature, without underlying 
inter-ethnic causes.  Some destructive forces elevate regular 
quarrels and scuffles between representatives of various ethnic 
groups to the level of deteriorating interethnic relations.  It is 
all common jealousy of the Makhmakhanovs' wealth."  On April 5, the 
Procurator General made a statement warning owners and 
editor-in-chiefs of mass media outlets against publishing, 
broadcasting and placing materials aimed at inciting social and 
ethnic hatred and insulting other citizens' dignity and honor. 
 
Reporter who Covered Kazatkom Missing 
------------------------------------- 
 
5. (U) On April 18, media freedom advocates held a press conference 
in Almaty to announce that newspaper reporter Oralgaisha 
Zhabagtai-kyzy had been missing since March 30.  Zhabagtai-kyzy, who 
worked for the "Zakon i Pravosudiye" weekly newspaper based in 
Astana, had written an article on the conflict between Kazakhs and 
Chechens in Malovodnoye village (reftel).  The article was entitled 
"Bloody Lawless Action, or Who is Behind the Makhmakhalovs?"  In it, 
she reported that Vita Makhmakhalov was a suspect in the murder of a 
criminal leader who had allegedly blackmailed the heads of the 
Kazakhmys firm in Zhezkazhgan.  Her brother and a colleague stated 
during the press conference that Zhabagtai-kyzy had received 
threatening phone calls from people with Caucasian accents after the 
article was published. 
 
6. (SBU) On the margins of the press conference, a local reporter 
speculated to PA FSN that the leadership of Kazakhmys (ethnic 
Koreans said to be close to President Nazarbayev) ordered Vita 
Makhmakhalov to kill Sagit Shakputov,   the alleged blackmailer in 
Zhezkazhgan,   and were protecting him from prosecution.  The 
reporter concluded that the conflict in Kazatkom was revenge by 
Shakputov's criminal associates rather than an interethnic dispute. 
He also said that Zhabagtai-kyzy had likely been killed. 
 
 
Survey on Inter-Ethnic Relations 
-------------------------------- 
 
7. (SBU) In November 2006, the Association of Sociologists and 
Political Scientists conducted a survey of public opinion on 
inter-ethnic relations in Kazakhstan.  According to the survey, the 
number of people who expressed concerns about inter-ethnic relations 
has increased by 1.6 times: 39.5% compared to 25.3% in 2005. 
Non-Kazakhs most often expressed these concerns.  Answers to other 
questions also pointed toward deteriorating inter-ethnic relations. 
The number of people who are ready to fight to defend the interests 
of their ethnic group has doubled in comparison with 2003.  Every 
fifth Kazakhs polled shared this attitude.  The perception of the 
risk of civil war on ethnic grounds has increased by 1.8 times: from 
 
ASTANA 00001033  002 OF 003 
 
 
17.7% in 2003 to 32.6% in 2006.  The pollsters concluded that the 
data means that "Kazakhstan is, if not on the verge of inter-ethnic 
politic conflict, dangerously close to it."  (Comment:  Post 
considers the conclusion to be highly exaggerated.)  (Survey of 
Association of Sociologists and Political Scientists, March 28) &
#x000A; 
Trial of "Shanyrak Defenders" Continues 
--------------------------------------- 
 
8. (U) The trial of 25 "Shanyrak Defenders" is continuing in the 
Almaty City court.  At the hearing on March 27, attended by Pol FSN, 
the court interrogated two witnesses, Auezov district court bailiffs 
Gulshat Zhansarova and Talgat Tolebayev.  Both testified that they 
had been eyewitnesses of the clashes between the local residents and 
the police on July 14, 2006, in the village of Shanyrak, but had 
seen none of the defenders standing trial.  Neither of the bailiffs 
saw the hostage taking because they stayed away from the area of 
conflict.  The lawyers tried to prove that the event on July 14, 
2006 was not a demolition campaign, but a police punitive action 
against the residents and that the bailiffs were invited to portray 
it to the public as demolition. 
 
9. (SBU) Several political activists, including Dos Koshim of the 
"Ult Tagdyry" (Nation's Future) nationalist movement, Asylbek 
Kozhakhmetov of the Alga party, and Burikhan Nurmukhamedov of the Ak 
Zhol party, participated in the proceedings as public defenders. 
According to Koshim, the prosecution has no strong evidence against 
the defenders.  A police cameraman videotaped the clashes.  However, 
because the cameraman was allegedly frightened the tape came out of 
poor quality and it does not show the hostage taking.  In a private 
conversation with Pol FSN, Koshim reported that one the principal 
witnesses in this case, Almaty City deputy chief bailiff Khajimurat 
Makhmakhanov was dead.  Makhmakhanov was the official who organized 
the demolition campaign in Shanyrak.  He was reportedly killed 
during a violent interethnic incident in the village of Kazatkom, 
Almaty Oblast, between Kazakhs and Chechens on March 18. 
 
10. (U) At the March 29 hearing, the five Shanyrak defenders accused 
of burning the policeman denied their guilt.  According to the 
accused, they intended to burn not the policeman, but themselves in 
a protest against the demolition.  The defenders allegedly do not 
know how it happened.  The defense is trying to drag out the trial. 
(Caravan weekly, March 30) 
 
Campaign Against Almatyzher 
--------------------------- 
 
11. (U) "The arbitrariness and impunity of the officials involved in 
the Bakay and Shanyrak demolition campaigns created a negative 
trend, which was extended throughout the country," Dos Koshim stated 
at a press conference in Almaty on March 28.  "As a result, in every 
region of Kazakhstan local authorities along with organizations like 
'Almatyzher' and private construction companies use their own 
discretion toward ordinary people seizing their lands and houses for 
alleged 'state purposes.'  By these actions, local authorities and 
the construction companies the authorities back contribute to 
destabilization of political situation through the country," Koshim 
said in his statement.  (Kazakhstan Today news agency, March 28) 
 
12. (U) On March 30, about 30 people -- including Socialist 
Resistance activists -- picketed the office of Almatyzher in Almaty. 
 Pol FSN observed the rally.  Two young people were holding a banner 
reading "Almatyzher is the Enemy of the People."  The leader of 
Socialist Resistance Aynur Kurmanov and Sakhib Zhanabayeva of the 
Workers' Movement entered the office to hand over their petition. 
After a short time the acting head of Almatyzher came out of the 
office and talked to the protesters for half an hour.  About two 
dozen policemen watched the rally.  As participants dispersed, the 
police followed Aynur Kurmanov and his friends.  A block from 
Almatyzher's office the police detained Kurmanov and took him away. 
 
 
13. (U) According to a participant of the rally, Alikhan Ramazanov, 
Kurmanov spent a night in the police station.  The next day the 
Inter-district Administrative Court of Almaty tried Kurmanov and 
fined him 11,000 tenge ($90) for organizing an unsanctioned rally. 
 
 
By-Elections to Almaty Precinct Election Commissions 
--------------------------------------------- ------- 
 
14. (U) On April 4 two opposition parties, True Ak Zhol and National 
Social Democratic Party, held a press conference in Almaty to 
express their outrage by the results of the recent by-elections to 
Almaty precinct election commissions.  Zharmakhan Tuyakbay, Bulat 
 
ASTANA 00001033  003 OF 003 
 
 
Abilov and Oraz Zhandosov maintained that the elections were a 
farce.  Out of 821 vacant seats, 197 were won by Adilet, 81 by Nur 
Otan, 151 by Patriots Party, 96 by Rukhaniyat, 126 by Auyl, 145 by 
the People's Communists, 4 by Ak Zhol, 4 by the Communists, 14 by 
the Social Democrats, and 3 by True Ak Zhol.   The opposition 
alleged that the members of the Almaty City Maslikhat, the majority 
of whom are Nur Otan members, were tasked with preventing the 
opposition party representatives from getting control over the 
electoral process. 
 
15.  (U) As illustration of the improbability of the election 
results, Abilov noted that the Rukhaniyat party received only 752 
votes in Almaty city in the 2004 parliamentary elections but now 
holds 335 seats on city election commissions.  Abilov claimed that 
"we have looked for Rukhaniyat's office in Almaty for two days and 
failed to find it.  The same is true with other political parties. 
And all these 'ghost-parties' exist to fill election commission 
seats and then to falsify election results," Abilov said.  Zhandosov 
mentioned that the authorities had so far failed to remove members 
of the former Asar, Agrarian and Civic parties, which had merged 
with Otan, from election commissions as was required by the law. 
 
Police Harassing Krishna Community 
---------------------------------- 
 
16. (U) The police of Tekeli City in Almaty Oblast on March 27 
disrupted a religious meeting of the local Krishna community in a 
private apartment.  A representative of the local administration 
announced the meeting illegal as the community had no registration 
at the city level.  All fourteen participants of the meeting were 
taken to the local police office and kept there for two hours.  The 
community members were reportedly threatened with reprisals, their 
passport data was recorded and then they were set free. 
(www.kazakhkrishna.com, March 29) 
 
The Village Invites Young People 
-------------------------------- 
 
17. (U) On March 28 in the Republican Palace of Almaty, the oblast 
administration organized a propaganda campaign "The Village Invites 
Young People" to persuade young people to move to villages. 
Nowadays the villages lack both financing and ambitious young 
people.  In recent years young people have been moving from rural 
areas to big cities seeking jobs and better opportunities. 
 
18. (U) In her comments on the campaign, Irina Mednikova of Youth 
Informati
on Service NGO cited some young people saying that the 
campaign was an attempt of authorities to herd them into villages to 
prevent their involvement in politics.  (Liter daily, March 28) 
 
ORDWAY

Wikileaks

07ASTANA1003, KAZAKHSTAN: FINANCE MINISTER CONFIRMS APPROVAL OF CTR

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Reference ID Created Released Classification Origin
07ASTANA1003 2007-04-19 00:31 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0002
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1003/01 1090031
ZNR UUUUU ZZH
P 190031Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9137
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0133
RUEHAST/USOFFICE ALMATY PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY 0027
RUEAADN/DTRA DULLES WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 ASTANA 001003 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN (M.O'MARA), SCA/RA (A. CUMMINGS) 
PLEASE PASS TO DTRA 
SECDEF WASHINGTON DC//ASD-ISP/TSP-CP/CTR AND ATSD/NCB/CT/TR 
 
E.O. 12958: N/A 
TAGS: PARM PREL KNNP KZ
SUBJECT: KAZAKHSTAN: FINANCE MINISTER CONFIRMS APPROVAL OF CTR 
CONTRACTS 
 
REF: ASTANA 974 AND PREVIOUS 
 
ASTANA 00001003  001.2 OF 002 
 
 
1. (SBU) Minister of Finance Korzhova sent a letter to the 
Ambassador on April 17 confirming that the interagency commission 
established to review Cooperative Threat Reduction (CTR) value-added 
tax exemption (VAT) claims for subcontractors has recommended the 
approval of nine of ten pending contracts.  Post submitted five of 
the contracts.  The only contract not approved covers consulting 
services and was set aside for further review. 
 
2. (SBU) Informal Embassy translation as follows: 
 
Dear Mr. Ordway, 
The Ministry of Finance of the Republic of Kazakhstan presents to 
you its compliments and upon review of your letter of April 9, 2007, 
regarding the validity of applying the Agreement between the United 
States of America and the Republic of Kazakhstan Concerning the 
Destruction of Silo Launchers of  Intercontinental Ballistic 
Missiles, Emergency Response, and the Prevention of Proliferation of 
Nuclear Weapons of December 13, 1993 (hereinafter, " the Agreement 
") to subcontracts established under the Cooperative Threat 
Reduction Program, wishes to inform you of the following: 
Decree No. 271 of the Government of the Republic of Kazakhstan dated 
April 5, 2007, has formed a special Republic of Kazakhstan 
Consultative and Advisory Government Body, the Interagency 
Commission (hereinafter, " IC"), for the purpose of administering 
the activities performed pursuant to the Agreement. The IC has 
convened on April 12 and 13 to review the subcontracts listed below, 
which the RK MFA has submitted for exemption from taxes, fees, and 
customs duty as specified in articles IX and XII of the Agreement. 
 
Contract DTRA 01-03-?-0058/01 with Degelen LLC dated September 1, 
2003,  for $ 257, 888.00; 
Contract DTRA 04-?-0018/1  with Degelen LLC dated 19 May 2004 ???? 
for $ 746,866. 00; 
Contract DTRA 1-04-? 0024/1 with Degelen LLC dated 5 July  2004 for 
$ 223,946.00; 
Contract DTRA 1-05-?-0036/1 with Degelen LLC dated 15 September 2005 
for $ 3,500,000; 
Contract DTRA1 1-05-?-0036/1 with Degelen LLC dated 15 September 
2005 for $ 3,500,000; 
Contract  DTRA 24914-?02-F??-?000-00001 with Alef Company LLC for $ 
941,168.87; 
Contract  ? 24914-202-F?4-?00Y-00004 with Sani LLC for $52,000.00; 
Contract ? 24914-202-F??-??00-00002 with Mir Zhilya LLC for $ 
48,699.00; 
Contract ? 24914-235-F??-??00-00001 with Stepnogorsk Invest for 
$34,000.00; 
Contract ? 24914-225-??4-?X00-00001 with the Non-proliferation 
Support Center for $6,820.00. 
In reference to the first nine contracts, the IC has decided to 
consider these contracts as meeting the criteria set by the 
Agreement, including the provisions for exemptions, and to submit 
this decision to the appropriate authorities. In regards to the 
contract established between the Non-proliferation Support Center 
(ISC) and Bechtel International Systems (BIS), the Commission has 
withheld from making a determination until additional information is 
obtained from the Ministry of Energy and Mineral Resources of the 
Republic of Kazakhstan. 
Availing of this occasion, I wish to renew my assurances of my 
respect for you, and I look forward to our continued fruitful 
cooperation. 
Respectfully, 
/signed/ 
 
Minister N. Korzhova 
 
End text 
 
3. (SBU) Comment: Minister Korzhova's confirmation letter indicates 
that success is close at hand.  We now only await Prime Minister 
Masimov's final approval, which should be a formality given his 
support for the program.  While work is left to be done to ensure 
that the VAT exemption process functions more efficiently in the 
future, the Kazakhstanis have now created the necessary conditions 
for work to resume on stalled CTR projects. End comment. 
 
ORDWAY 
 
 
 
 
 
1 Translator's Note: This no. 5 was present in the original as a 
 
ASTANA 00001003  002.2 OF 002 
 
 
repeat of no. 4.

Wikileaks

07ASTANA991, NEW HEAD OF FINANCIAL POLICE ACADEMY IN KAZAKHSTAN

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Reference ID Created Released Classification Origin
07ASTANA991 2007-04-18 06:25 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8906
PP RUEHAST
DE RUEHTA #0991 1080625
ZNR UUUUU ZZH
P 180625Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9118
INFO RUEHAST/USOFFICE ALMATY
RUEHC/SECSTATE WASHDC//SCA COLLECTIVE// 9119
RUEKJCS/SECDEF WASHINGTON DC//USDP EURASIA//
RUEATRS/DEPT OF TREASURY WASHDC//IET//
RUEAWJA/DEPT OF JUSTICE WASHDC

UNCLAS ASTANA 000991 
 
SIPDIS 
 
DEPT FOR SCA/CEN (OMARA), INR, INL/AAE (ALTON) 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: SNAR KCOR KCRM KZ
SUBJECT: NEW HEAD OF FINANCIAL POLICE ACADEMY IN KAZAKHSTAN 
 
 
1. (U) Summary: On March 29, the Chairman of the Financial Police 
appointed Major-General Ramazan Tleuhan to head the Kazakhstani 
Financial Police Academy located near Astana.  The new Head of 
Financial Police Academy replaces Colonel/Professor of the Financial 
Police Academy, Marat Kogamov.  End summary. 
 
------------------------------------- 
NEW HEAD OF FINANCIAL POLICE ACADEMY 
------------------------------------- 
 
2. (U) Chairman of the Agency on Combating Economic and Corruption 
Crimes (the Financial Police), Sarybai Kalmurzayev, appointed 
Ramazan Tleuhan to head the Financial Police Academy on March 29. 
Since February 2006, Tleuhan worked as the Head of the Department on 
Combating Economic and Corruption Crimes in Western Kazakhstan 
Region (WKR). Prior to that Tleuhan was the Head of the Department 
on Detection and Prevention of Corruption Cases of the Financial 
Police. In previous years Tleuhan worked in different positions 
including as the Advisor to the Chairman of the Financial Police in 
2005.  In 1978 he obtained his degree in law at Kazakhstani State 
University named after S. Kirov. 
 
------------------------------------ 
TLEUHAN'S INVOLVEMENT IN CONTROVERSY 
------------------------------------ 
 
3. (SBU) In 2006, Tleuhan was involved in a conflict between three 
law enforcement agencies in the WKR that generated charges and 
counter-charges of corruption by each agency.  The conflict caused 
considerable public stir and was widely covered by media.  The 
conflict broke out between the regional departments of Financial 
Police on one side and the Procurator General's Office and the 
Committee for National Security (KNB) on the other.  The KNB 
launched a criminal case against Tleukhan for misappropriation of 
state property after the Financial Police opened a criminal case 
against the Deputy Regional Procurator, the Uralsk Procurator and 
the head of the KNB department.  Furthermore, then KNB department 
head Nurmuhamedov accused Tleukhan of links to criminal elements. 
As a result of this conflict, all the heads of the three law 
enforcement agencies in WKR were fired for failing to perform their 
official duties and for violating the law.  (Note: The case is still 
under investigation so the facts regarding the guilt of the 
individuals have not been established.  Given that the KNB is 
involved, the facts may never come to light.  End note.) 
 
------------------------------------- 
KOGAMOV MOVES TO THE SECURITY COUNCIL 
------------------------------------- 
 
4. (U) Colonel of Financial Police Marat Kogamov became the Head of 
the Financial Police Academy in May 2001 and served in this post 
through June 2003. He was re-appointed in October 2004 and remained 
in the position until replaced by Tleuhan.  He has now been 
appointed as a Senior Inspector of the Security Council of 
Kazakhstan. 
 
 
------- 
COMMENT 
------- 
 
5. (SBU) While post regrets the departure of Kogamov, an excellent 
interlocutor who actively advanced anti-money laundering and 
anti-corruption cooperation with the U.S., initial communication 
with Tleuhan gives hope that close cooperation with the Financial 
Police Academy will continue. 
 
ORDWAY

Wikileaks

07ASTANA986, KAZAKHSTAN FLOATS IDEA OF CHINA-CASPIAN ENERGY /

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Reference ID Created Released Classification Origin
07ASTANA986 2007-04-18 03:10 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8738
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #0986/01 1080310
ZNR UUUUU ZZH
P 180310Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9109
INFO RUCNCIS/CIS COLLECTIVE 0131
RUEHBJ/AMEMBASSY BEIJING 1307
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUEBAAA/DEPT OF ENERGY WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 000986 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EB/ESC; SCA/CEN (O'MARA) 
 
E.O. 12958: N/A 
TAGS: ENRG EPET KZ
SUBJECT: KAZAKHSTAN FLOATS IDEA OF CHINA-CASPIAN ENERGY / 
TRANSPORTATION CORRIDOR 
 
REF: A. ASTANA 943 
     B. ASTANA 908 
 
1. (SBU) Summary:  The GOK is floating the idea of an "energy 
transportation corridor" running from China to the Caspian 
through Southern Kazakhstan, which would consolidate oil and 
gas pipelines, railroad tracks, highways, electricity 
transmission lines and generating plants, and 
telecommunication lines along a single right-of-way. 
Presidential Advisor Serik Burkitbayev distributed a 
description of the project at the April 5 Interim Session of 
the Foreign Investors' Council (FIC), soliciting FIC member 
company support and telling them that the proposal would be 
on the agenda of the Summer 2007 FIC Plenary Session, chaired 
by President Nazarbayev. On April 7, Yerlan Sagadiyev, 
Advisor to the Prime Minister, highlighted the potential of a 
"multi-modal" transportation corridor, extending across the 
Caspian and beyond, to cut the transit time of Chinese goods 
to Europe by eleven days (Ref A).  End Summary. 
 
GOK Document Describes Corridor Concept 
--------------------------------------- 
 
2. (SBU) Presidential Advisor Serik Burkitbayev distributed a 
document (marked "confidential") describing a 
"Trans-Kazakhstan Energy Corridor" to FIC members on April 5. 
 The document and supporting maps describe an integrated 
transportation/energy/telecommunications corridor extending 
from the Kazakhstan-China border near Dostyk, through the 
population centers of Almaty and Shymkent, and then Northwest 
to the tip of the Aral sea, where the corridor bifurcates, 
with one leg running West to the Caspian port of Aktau, and 
the other leg running Northwest to the vicinity of Uralsk, on 
the Kazahstan-Russian border. The corridor would consolidate 
highways, oil and gas pipelines, railways, power transmission 
lines, water pipes, and telecommunication lines along a 
single right-of way, "saving both capital costs and service 
infrastructure expense."  Project cost is estimated at $20-25 
billion, with phased completion in 2007-2009 and 2012-2015. 
The document notes that the corridor will interface naturally 
with the European TRACECA ("Transport Corridor 
Europe/Caucuses/Asia") project. 
 
3. (SBU) The document envisions that construction of the 
corridor will spur the development of "a number of complexes 
for energy-intensive production" (cement, glass, fertilizer, 
and high-tech metallurgical production are mentioned), with 
resulting shifts in population, creating communities akin to 
"Silicon Valley" and the "IT Corridor in Malaysia."  The 
project is also touted as a solution to Southern Kazakhstan's 
energy supply issue. (Note: The document emphasizes that many 
of the corridor's component parts are already under design or 
construction.  The corridor does parallel one possible 
pathway for the proposed Turkmenistan-Kazakhstan-China gas 
pipeline, rumored to be favored by the GOK in order to 
provide gas supplies to Almaty and other Southern population 
centers.  End note.) 
 
4. (SBU) The document calls for the creation of additional 
infrastructure along the corridor, including terminals and 
logistics centers on the Caspian Sea, as well as on the 
border with Uzbekistan, Russia, and China.  Private investors 
are invited to participate in the construction of the 
infrastructure, as well as to contemplate building their own 
"specialized rolling-stock," as well as transit and warehouse 
terminals at border locations. 
 
5. (SBU) In an April 7 conversation with the Ambassador, 
Sagadiyev emphasized the corridor as a cost-effective way to 
deliver Chinese goods to the European market.  According to 
his vision, the corridor would extend to cross-Caspian 
shipping and beyond, cutting the potential delivery time for 
Chinese goods to Europe by eleven days.  Sagadiyev noted that 
the corridor would be particularly well-suited for perishable 
Chinese goods, such as wheat, the transit potential of which 
he estimated at 20 million tons annually. 
 
6. (SBU) Comment:  We do not know the origins of this 
corridor concept, but it appears to have caught the 
imagination of the Kazakhstanis -- and presumably, of the 
Chinese as well. When combined with the Prime Minister's 
recent remarks to the Ambassador that Kazakhstan was pursuing 
a transportation "union" with Azerbaijan, Georgia, and Turkey 
 
ASTANA 00000986  002 OF 002 
 
 
(Ref B), this news leads us to conclude that the GOK is 
intent on improving transportation efficiencies and 
capitalizing on Kazakhstan's geographical position as a 
natural transit country.  End comment. 
ORDWAY

Wikileaks

07ASTANA984, KAZAKHSTAN: AES UPDATES AMBASSADOR ON BUSINESS

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Reference ID Created Released Classification Origin
07ASTANA984 2007-04-18 02:29 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Astana

VZCZCXRO8721
PP RUEHDBU
DE RUEHTA #0984/01 1080229
ZNY CCCCC ZZH
P 180229Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9106
INFO RUCNCIS/CIS COLLECTIVE 0129
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUEBAAA/DEPT OF ENERGY WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 000984 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
DEPT FOR EB/ESC; SCA/CEN (O'MARA) 
 
E.O. 12958: DECL: 04/16/2015 
TAGS: ENRG EPET KZ
SUBJECT: KAZAKHSTAN: AES UPDATES AMBASSADOR ON BUSINESS 
INTERESTS, LEGAL ISSUES 
 
REF: A. ASTANA 908 
 
     B. 06 ALMATY 2054 
     C. ASTANA 580 
 
Classified By: Ambassador John Ordway; reasons 1.5 (b) and (d). 
 
1. (C) Summary:  AES's Dale Perry told the Ambassador on 
April 12 that "business is great" in Kazakhstan, despite 
ongoing legal disputes initiated by regional and local 
officials, and a general disagreement with regulators over 
the proper definition of monopoly power.  Perry noted that a 
draft Government of Kazakhstan (GOK) plan for the development 
of the electricity sector, which confirmed the GOK's intent 
to fully liberalize electricity prices, was so good "that AES 
could have written it."  Perry confirmed that AES was still 
pursuing an arrangement to provide 1000 MW to a proposed SUAL 
(now RUSAL) aluminum smelter in East Kazakhstan;  the Chinese 
appeared to have scuttled a project to build a 7200 MW 
coal-fired plant in the same region upon being informed by 
the GOK that they would have to build the plant according to 
high environmental standards.  Perry told the Ambassador that 
AES's enthusiasm for regional electricity projects had 
diminished, due to a "lack of evident solutions in 
Afghanistan," and reduced corporate tolerance for risk.  End 
summary. 
 
AES: Kudos for GOK's Electricity Policy.. 
----------------------------------------- 
 
2. (C) In an April 12 meeting with the Ambassador, Dale 
Perry, AES's Regional Director for Eastern Europe and the 
CIS, raved about the GOK's new (draft) plan for the 
development of the electricity sector, describing the plan as 
so encouraging that "you would have said AES wrote it."  Vice 
Energy Minister Satkaliyev had underscored the GOK's 
commitment to price liberalization earlier that day, telling 
Perry that "we're headed for a free (electricity) market." 
(Prime Minister Masimov recently told Ambassador that the GOK 
hoped to achieve full liberalization of the electricity 
market in 2008.  Ref A.)  Country Manager Mike Jonagan added 
that even AES's dealings with its industrial customers were 
much improved.  "They want real, Western-style contracts," he 
said, adding that the company had not had to take a wholesale 
customer to court in over two years.  In broad terms, Perry 
concluded, business "was great" in Kazakhstan. 
 
...While Fighting Corruption at the Regional and Local Level 
--------------------------------------------- --------------- 
 
3. (C) The most important remaining area of reform, Perry 
said, lay in the legal definition of a "monopoly" electricity 
provider, a concept with important legal implications for the 
GOK's right to regulate tariffs.  AES's most troublesome 
ongoing legal dispute, Perry explained, arose out of 
different interpretations of this law, with the GOK's 
Competition Protection Committee (CPC) arguing that AES had 
earned illegal monopoly profits in East Kazakhstan as a 
result of the company's near-dominant position in the oblast. 
 AES, in turn, believes that a company's market share should 
be assessed from a national, rather than an oblast, 
perspective. 
 
4. (C)  Perry told the Ambassador that the newly-appointed 
akim of East Kazakhstan Oblast, Zhanybek Karibzhanov, had 
encouraged the CPC to open a criminal investigation of AES's 
"monopoly profits" in order to pressure AES into lowering 
electricity tariffs for his new constituents.  AES had 
finally cut a deal with the akim, Perry explained, agreeing 
to lower tariffs to oblast retail customers by roughly 1 cent 
per kWh.  In return, the authorities agreed to drop the 
threatened criminal investigation into alleged monopolistic 
practices by AES employees, including AmCit Jim Doak.  The 
rate cut would cost AES $6 million, Jonagan estimated, but 
the company had little choice but to settle, as the company 
could scarcely function if its employees were subject to 
criminal charges. 
 
5. (C) AES was still vulnerable to more than $40 million in 
civil penalties in the case, Perry noted.  Perhaps more 
disturbingly, the same logic that had been applied to 
defining a monopoly in East Kazakhstan could be applied in 
Pavlodar oblast as well, where AES's Ekibastuz GRES I plant 
represented a far larger investment.  AES was pushing the GOK 
to clarify the monopoly laws, Perry concluded, warning the 
authorities that, while AES was preparing itself to invest 
$750 million in the upgrade of its Ekibastuz GRES I plant 
 
ASTANA 00000984  002 OF 002 
 
 
(Ref B), it would not undertake the investment until the 
monopoly laws were clarified. 
 
6. (C) Jonagan updated the Ambassador on another legal 
irritant -- a $3 million assessment against AES for improper 
storage of overburden at the company's Maikuben mine (Ref C). 
 AES had lost the case in court and on appeal, he explained. 
However, the company had recently convinced both Finance 
Minister Korzhova and Environmental Protection Minister 
Iskakov to listen to a taped conversation of
 a local 
environmental official threatening the legal action on the 
overburden issue if AES didn't pay him a $150,000 bribe. Upon 
hearing the tape, Jonagan said, both Ministers readily agreed 
to help facilitate the submission of evidence to the Supreme 
Court demonstrating that AES had, in fact, followed industry 
standards in disposing of the overburden.  AES was now 
hopeful, Jonagan concluded, that the Supreme Court would rule 
in its favor. 
 
Update on AES Business Ventures 
------------------------------- 
 
7. (C) Perry told the Ambassador that AES was still pursuing 
a deal to sell 1000 MW of electricity to SUAL (Siberian Ural 
Aluminum Company, now a part of the merged "United Company 
RUSAL") to power a planned aluminum smelter near Ekibastuz. 
Since the same company, Access Industries, owned both AES's 
largest coal supplier, Bogatyr Access Komir, and 30% of SUAL, 
Perry explained, AES's sale of electricity to the smelter 
would constitute a "tolling" arrangement, with United Company 
RUSAL essentially "renting" two of AES's Gres I 500 MW 
generating blocks to transform its own coal into electricity. 
However, Perry noted, there was talk of including Bogatyr 
Access Komir in the "United Company RUSAL" deal.  If that 
happened, Perry said, the GOK might exercise its "preemptive 
rights" to buy some or all of Bogatyr Access Komir, rendering 
the "tolling" agreement more complex. 
 
8. (C) Asked for news on the Chinese initiative to build a 
7200 MW coal-fired plant in NE Kazakhstan (Refs B,C), Perry 
told Ambassador Ordway that the project appeared to be 
"dead."  The GOK insisted that the Chinese build the new 
plant to modern, high environmental standards, Perry said. 
The Chinese objected, arguing that they shouldn't be held to 
a higher standard than the existing, "dirty" coal plants in 
the region (including AES's GRES I).  However, Perry 
concluded, the GOK hadn't backed down, and the deal appeared 
to be dead. (In an April 10 conversation with Ambassador 
Ordway, Presidential Advisor Vladimir Shkolnik confirmed that 
the Chinese initiative had lost momentum.) 
 
9. (C) Perry voiced skepticism about AES's involvement in 
efforts to deliver Central Asian power to Afghanistan and 
Pakistan.  AES might be interested in investing in CHP 
(combined heat/power) plants in Kyrgystan, he said, but "we 
see no solutions in Afghanistan," and thus had dwindling 
interest in Tajikistan.  AES's (forced) sale of Electricidad 
de Caracas in Venezuela, he explained, had significantly 
lowered the company's tolerance for risk elsewhere. "Maybe we 
would still look at a project bringing electricity north to 
Almaty," he concluded. 
ORDWAY

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07ASTANA974, KAZAKHSTAN: VAT COMMISSION APPROVES CTR CONTRACTS

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Reference ID Created Released Classification Origin
07ASTANA974 2007-04-16 11:44 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6665
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #0974 1061144
ZNR UUUUU ZZH
P 161144Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9094
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0126
RUEKJCS/SECDEF WASHDC PRIORITY 0026
RUEHAST/USOFFICE ALMATY PRIORITY
RHMFIUU/DTRA CT WASHINGTON DC PRIORITY

UNCLAS ASTANA 000974 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN (M. O'MARA), SCA/RA (A. CUMMINGS) 
SECDEF FOR ATSD/NCB/CT/TR AND ASD/ISP/TSP/CP/CTR 
 
E.O. 12958: N/A 
TAGS: PARM PREL KNNP KZ
SUBJECT: KAZAKHSTAN: VAT COMMISSION APPROVES CTR CONTRACTS 
 
REF: A. ASTANA 950 B. ASTANA 927 C. ASTANA 906 D. 
 
     ASTANA 860 
 
1. (SBU) Finance Minister Korzhova informed the Ambassador 
late on April 13 that the interagency commission established 
to review Cooperative Threat Reduction (CTR) value-added tax 
exemption claims for subcontractors had approved nine of ten 
pending contracts. (Note: Post submitted five of the 
subcontracts, one of which covered consulting services and 
was set aside for future review. Post will seek an alternate 
funding mechanism for the contract. Five were submitted by 
Kazakhstan's National Nuclear Center, which is also a prime 
contractor.) The commission's recommendations will now be 
forwarded to Prime Minister Masimov for final approval. 
 
2. (SBU) Post was just informed that Prime Minister Masimov 
must make the final decision.  In the interim, we have asked 
for written confirmation of the commission's decision and 
have been told that a letter to the Ambassador has been 
prepared for Minister Korzhova's signature. 
 
3. (SBU) Comment: Prime Minister Masimov pressed for a quick 
and positive resolution of the VAT issue and we thus have 
every confidence that he will approve the exemptions. End 
comment. 
ORDWAY

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