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.

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