07ASTANA950, KAZAKHSTAN: CTR VAT COMMISSION MOVES TOWARD A

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Reference ID Created Released Classification Origin
07ASTANA950 2007-04-13 10:34 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3995
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #0950 1031034
ZNR UUUUU ZZH
P 131034Z APR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9078
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0125
RUEHAST/USOFFICE ALMATY PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY 0025

UNCLAS ASTANA 000950 
 
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: CTR VAT COMMISSION MOVES TOWARD A 
DECISION 
 
REF: A. ASTANA 927 B. ASTANA 906 C. ASTANA 860 
 
1. (SBU) The interagency commission established to review the 
Cooperative Threat Reduction (CTR) value-added tax exemption 
claims for subcontractors met twice on April 12 and 13.  The 
Commission has not yet issued a written decision but several 
commission members told Pol/Econ Chief and DTRA Chief that 
they have reached agreement in principle on a technical 
approach to approve the Biological Threat Reduction (BTR) 
contracts.  They are awaiting a written decision from the 
Ministry of Justice and Ministry of Defense before issuing 
the document certifying the subcontracts under consideration. 
 They promised to work into the night and weekend to finalize 
the agreement. DTRA Chief and Pol/Econ Chief both saw a draft 
of a protocol exempting five subcontractor packages, although 
it was unsigned. 
 
2. (SBU)  There has been disagreement among the Ministries 
involved in the review process.  On April 12, Minister of 
Finance Korzhova told the Ambassador and several commission 
members informed DTRA Chief that the relevant implementing 
agreements may need to be ratified, because the CTR Umbrella 
agreement only references strategic offensive weapons.  The 
next day, however, MFA Section for International Security 
Advisor Sergey Savelyev, a commission participant, told 
Pol-Econ Chief that the MFA believes that no ratification is 
necessary.  He added that the MFA is preparing a position 
paper for the Ministries of Justice and Finance in support of 
this argument.  Savelyev said that he is optimistic of a 
positive result, although he noted that all will depend on 
Minister of Finance Korzhova. 
 
3.(SBU)  Comment: The CTR VAT commission appears close to a 
decision on the package of subcontracts submitted by the 
Embassy.  Whatever the outcome, the Kazakhstanis have at 
least demonstrated that they understand the importance of the 
issue and have created a review mechanism that seems to be 
working.   End comment 
ORDWAY

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