Monthly Archives: September 2007

07ASTANA2718, KAZAKHSTAN: CONFUSION SURROUNDS TREASON INVESTIGATION OF

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Reference ID Created Released Classification Origin
07ASTANA2718 2007-09-28 10:15 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0749
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #2718/01 2711015
ZNR UUUUU ZZH
P 281015Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 0830
INFO RUEHAST/USOFFICE ALMATY
RUCNCIS/CIS COLLECTIVE 0264
RUEHVEN/USMISSION USOSCE 1829

UNCLAS SECTION 01 OF 03 ASTANA 002718 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN (M. O'MARA) 
 
E.O. 12958: N/A 
TAGS: PHUM PGOV PREL KDEM KZ
SUBJECT: KAZAKHSTAN: CONFUSION SURROUNDS TREASON INVESTIGATION OF 
GRACE PRESBYTERIAN CHURCH LEADERS 
 
ASTANA 00002718  001.2 OF 003 
 
 
1. (SBU) Summary: On August 24, Committee for National Security 
(KNB) agents raided the headquarters of the Grace Presbyterian 
Church in Karaganda, a Grace Church in Ust Kamenogorsk, and several 
church-owned private homes in Karaganda, seizing documents and 
computers and questioning church officials.  The raid was part of a 
treason investigation involving the head of the church and several 
of his family members, as well as an Almaty businessman previously 
detained on treason charges.  The Government of Kazakhstan has 
released few details about the investigation, and has forbidden 
those under investigation from discussing the case.  On September 
17, Karaganda regional procurators announced that investigators 
found illegal drugs, evidence of fraudulent property transfers, and 
materials that promote the superiority of one faith over another and 
instigate inter-faith discord.  However, observers reported that 
these findings actually come from a completely unrelated 
investigation in Karaganda.  So far, church officials have not been 
formally arrested or charged and the churches are able to hold 
services, though KNB investigators continue to question church 
leaders and congregation members. End summary. 
 
 
------------------------------------- 
KNB RAIDS GRACE PRESBYTERIAN CHURCHES 
------------------------------------- 
 
2. (U) On August 24, KNB agents conducted a surprise 15-hour raid of 
the Grace Presbyterian Church headquarters in the central 
Kazakhstani city of Karaganda.  On the same day, KNB agents also 
raided three church-owned private homes in Karaganda, and another 
Grace Church in the eastern Kazakhstani city of Ust Kamenogorsk. 
During the raid, agents searched the entire premises, forbade anyone 
from entering or leaving, and required those present to write 
statements.  The agents also seized computers, church literature, 
documents, and accounting records. Following the raid, authorities 
summoned Archbishop Igor Kim, leader of the church for all of 
Kazakhstan, for further questioning. 
 
3. (SBU) Details of the raid were first reported by the Forum 18 
news service; Post confirmed details by speaking to a church 
official and Aleksandr Klyushev, chairman of the Association of 
Religious Organizations of Kazakhstan.  Post's regular contacts in 
the Religious Issues Committee of the Ministry of Justice knew 
nothing of the investigation.  The case has received very little 
media coverage, and KNB officials have thus far refused to comment 
on the investigation. 
 
--------------------------------------- 
RAID CONNECTED TO TREASON INVESTIGATION 
--------------------------------------- 
 
4. (SBU) According to Klyushev and church members present during the 
raid, the authorities told church officials that the investigation 
is part of a treason investigation, apparently targeting Archbishop 
Kim, his sister, a church administrator, and the senior pastor of 
the church in Ust-Kamenogorsk, who is Kim's relative. Klyushev and 
church members were surprised by the allegations of treason, and had 
no information about the possible basis for any treason charge. 
Archbishop Kim and the others under investigation were instructed 
not to discuss the case publicly. Church members also reported that 
all Grace Church affiliates are now facing a tax investigation. 
 
5. (SBU) Klyushev said the investigation is connected to an Almaty 
businessman previously detained on treason charges.  According to 
some of the few press articles to appear on the investigation, the 
businessman is Sergei Tsoi. Tsoi is the owner of Kaztranscom 
Service, a construction company, and he allegedly defrauded 
investors in a large residential construction project in Almaty. 
Tsoi is currently in a pre-trial detention facility in Almaty. 
 
SIPDIS 
Klyushev and the press reports indicated that Tsoi allegedly made 
several large financial donations to the Grace Church. Klyushev was 
initially restrained in his public comments on the investigation, 
explaining that it appeared to be a financial investigation related 
to Tsoi rather then a case of religious persecution. 
 
--------------------------------------- 
LOCAL PROCURATORS CONFUSE THE SITUATION 
--------------------------------------- 
 
6. (SBU) In a strange development, however, the Karaganda regional 
procurators' office released a statement on September 17 concerning 
the Grace Church investigation.  The statement announced that 
authorities were investigating the presence of heavy psychotropic 
drugs at the church, several suspicious property transfers, and the 
presence of materials promoting the superiority of one faith over 
another and instigating inter-faith discord.  In response to 
complaints by church members and the local Kazakhstan International 
Human Rights Bureau affiliate that investigators had committed 
 
ASTANA 000
02718  002.2 OF 003 
 
 
procedural violations during their search and seizure, the statement 
said that procurators had reviewed the investigation and found no 
violations, and warned church members not to interfere.  The 
statement did not reference the treason aspect of the 
investigation. 
 
7. (SBU) According to Klyushev, the facts discussed by the 
procurators actually relate to an investigation at the Karaganda 
House for Old People, a home for the elderly affiliated with the 
Union of Baptist Churches and unrelated to the Grace Church. 
Vyacheslav Zhuravlev, vice president of the Union of Baptist 
Churches of Kazakhstan, confirmed that investigators had indeed 
found drugs in the home that were used to treat an elderly resident, 
and that the director of the home had made some mistakes in 
transferring some property.  He said that procurators were mistaken 
in attributing these problems to the Grace Church, though he said 
that the Grace Church was one of many churches providing financial 
support to the home.  Klyushev speculated that procurators 
deliberately linked the negative results of that investigation with 
the Grace Church in order to deflect criticism of the Grace Church 
investigation and erode public sympathy for the Grace Church. 
 
------------------------------------ 
SO FAR, NO ARRESTS OR FORMAL CHARGES 
------------------------------------ 
 
8. (SBU) Authorities thus far have not revealed the basis for any 
treason investigation, and have not formally arrested or charged Kim 
or any church officials. Both of the churches that were raided 
continue to hold regular Sunday services, though church officials 
report that their operations have been hindered by the seizure of 
their computers and other materials.  In addition, KNB officers 
continued to question church officials and congregation members 
about all aspects of the church and its operations. 
 
------------------------------ 
BACKGROUND ON THE GRACE CHURCH 
------------------------------ 
 
9. (SBU) In the past, KNB officials have publicly criticized the 
Grace Church. On September 15, 2006, the deputy chief commander of 
the KNB Counter-Terrorism Center made a public statement in support 
of legislation to ban destructive sects and organizations like 
Scientologists, Jehovah's Witnesses, and the Grace Church. 
 
10. (SBU) In April, Poloff visited the Grace Church headquarters in 
Karaganda and met with Archbishop Kim and his staff.  The Grace 
Church is a protestant, evangelical Christian denomination.  The 
first church was founded in Karaganda in 1991 by Korean-American 
missionary Joseph Yu, and the denomination in Kazakhstan has grown 
to just over 200 churches with approximately 12,000 regular 
attenders.  (Note: After 14 years of living in Kazakhstan, the 
government denied Yu reentry into the country in 2005 for 
unspecified reasons.  End note.) 
 
11. (SBU) The church in Karaganda, with an attendance of 3000 every 
week, is the largest Grace Church and the second largest church in 
Kazakhstan.  In many respects, the church building and separate 
headquarters facility resemble the operations of an American 
mega-church, with offices, classrooms, kitchen facilities, modern 
audiovisual, recording, and lighting equipment in the main 
sanctuary, and warehouse facilities for distribution of food and 
clothing to the needy. In addition, Grace Church sends missionaries 
throughout the former Soviet Union, and operates a seminary in 
Kazakhstan with 44 students and 50 interns. 
 
12. (SBU) Kim said that the Grace Church is openly evangelistic, and 
Poloff noted several signs and posters in the main sanctuary 
encouraging the congregation to witness to their friends and 
neighbors and grow the number of Christians in Kazakhstan. Kim 
repeatedly praised President Nazarbayev and his policies, and said 
that the church prays for him every day during their morning prayer 
service. Nevertheless, Kim said that church affiliates occasionally 
encounter registration problems in different regions of the country. 
 He also said that at least one of his staff members was an 
informant for law enforcement officials.  He said the church was not 
bothered by the informant, because they had nothing to hide.  At the 
time, Kim was optimistic about life in Kazakhstan and the future of 
the church, and was confident that God would protect them no matter 
what the government does. 
 
------- 
COMMENT 
------- 
 
13. (SBU) Comment: The true nature of the case against Grace Church 
remains uncertain, though it is clear the investigation is 
 
ASTANA 00002718  003.2 OF 003 
 
 
proceeding very thoroughly and carries potentially very serious 
ramifications for the church and its leadership.  Post will continue 
to monitor the situation carefully, particularly given past KNB 
comments about the church.  End comment. 
 
 
MILAS

Wikileaks

07ASTANA2716, GOVERNMENT OF KAZAKHSTAN PROPOSES RESOLUTION OF CUSTOMS

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Reference ID Created Released Classification Origin
07ASTANA2716 2007-09-28 02:03 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0370
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #2716/01 2710203
ZNR UUUUU ZZH
R 280203Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0827
INFO RUEHAST/USOFFICE ALMATY
RUCNCIS/CIS COLLECTIVE 0262
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 002716 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN - SUMAR 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV EIND ENRG PGOV KTDB KZ
SUBJECT: GOVERNMENT OF KAZAKHSTAN PROPOSES RESOLUTION OF CUSTOMS 
SHUTDOWN 
 
Ref: A) Astana 2511 
 
ASTANA 00002716  001.2 OF 002 
 
 
1. (SBU) Summary.  A new amendment to the Customs Code, enacted by 
the Government of Kazakhstan (GOK) on July 26, mandates submission 
of export declaration forms when bringing goods into the country 
"for free circulation."  When the new statute came into force on 
August 21, it immediately stopped the entry into Kazakhstan of goods 
originating from countries, which do not allow sharing of such 
export declarations, particularly the U.S. and the European Union. 
Embassy Astana has also been unable to bring in some shipments.  In 
response to repeated appeals by the Ambassador, Prime Minister 
Masimov acknowledged the government's "mistake" but stated that 
correcting it will require enactment of new legislation, which will 
take time.  In a meeting with Charge today, Vice Minister of Finance 
outlined a short-term solution.  End summary. 
 
USG Aggressively Pushes for Resolution of Customs Shutdown 
--------------------------- ------------------------------ 
 
2. (SBU) Post first became aware of the stoppage of U.S. goods at 
the Kazakhstani customs due to difficulties in clearing diplomatic 
shipments and raised the issue with the Customs Committee.  Calls to 
Post from U.S. companies soon followed.  On September 5, Special 
Representative for Commercial and Business Affairs J. Frank Mermoud 
brought up the issue with Prime Minister Masimov, who described the 
matter as being "within his competence" and stated that it should 
soon be resolved. (ref A)  The Ambassador has discussed the customs 
shutdown with Masimov on three different occasions.  On September 
10, the Ambassador also sent a letter to Finance Minister Korzhova 
(note: the Customs Committee operates under the aegis of the 
Ministry of Finance.  End note.), which stated that U.S. law 
prevents sharing of customs declarations and asked for immediate 
release of the goods held at the border. 
 
3. (SBU) Speaking to the Ambassador, Masimov acknowledged that the 
new law, initially "aimed at the Chinese," was a "mistake" and now 
needs to be corrected with another legislative change.  Masimov told 
the Ambassador on September 23 that a government session this week 
will draft a law for Parliament's consideration.  However, Masimov 
did not hazard a guess as to how long the process would take. 
Chevron executives have told the Ambassador that the company's CEO 
has raised the issue with Nazarbayev as a very urgent matter. 
Nazarbayev, Chevron representatives added, appeared surprised. 
 
4. (SBU) Post has also been working to resolve the non-release of 
goods headed for the Embassy, a problem shared by many diplomatic 
missions accredited in Kazakhstan.  With Management Counselor's 
active involvement, a letter was drafted and sent on behalf of 
Astana's diplomatic corps by Deputy Foreign Minister Zhoshybayev. 
 
Solution in Sight? 
------------------ 
 
5. (SBU) On September 27, Charge met with Vice Minister of Finance 
Daulet Yergozhin.  Yergozhin told Charge that draft legislation to 
"fix" the problem caused by "a badly drafted law" is in the works 
but may take "a couple of months" to enact.  (Note: According to 
other sources, draft legislation has now been given by the 
government to Parliament.  End note.)  Yergozhin also said that the 
problem can, in the meantime, be resolved by having the U.S. qualify 
for an exemption.  What is needed, Yergozhin stated, is for the U.S. 
customs authorities to provide a letter, addressed to the Chairman 
of the Kazakhstani Customs Committee and notarized by the 
Kazakhstani Embassy in Washington, stating that it is illegal under 
U.S. law to share export declaration forms.  Yergozhin noted that 
communication on this subject needs to occur between two customs 
authorities due to the International Customs Union's requirements. 
A copy of this letter, followed by the original, would be 
acceptable.  Yergozhin stated that U.S. goods would then be exempted 
from the export declaration submission requirement "within 24 
hours."  Yergozhin also told Charge that the head of the Customs 
Committee has now ordered Atyrau customs authorities to permit 
Chevron's shipments to enter Kazakhstan.  (Note: Chevron executives 
had earlier told Charge that the company's slowdown of production 
due to delays in receiving shipments is costing the GOK $6 million a 
day in lost tax revenues.  End note.) 
 
Comment 
------- 
 
6. (SBU) Comment.  Post has pushed hard for an end to the customs 
shutdown.  The Prime Minister is clearly aware of the problem and is 
working to resolve it.  He is seeking to enact legislation lifting 
or limiting the export declaration requirement, but this will take 
time.  As that process takes place, we ar
e seeking a short-term 
solution to ensure that U.S. goods are permitted to enter 
Kazakhstan.  Charge's meeting today with Vice Minister of Finance 
 
ASTANA 00002716  002.2 OF 002 
 
 
provides hope that such a solution is possible.  End comment. 
 
MILAS

Wikileaks

07ASTANA2686, KAZAKHSTAN: URALSK COURT CONVICTS TWO WOMEN FOR TRAFFICKING

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Reference ID Created Released Classification Origin
07ASTANA2686 2007-09-26 04:34 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8128
PP RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHPW
DE RUEHTA #2686 2690434
ZNR UUUUU ZZH
P 260434Z SEP 07 ZDK CITING RUEHSD #0172 2690923
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 0801
INFO RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHAST/USOFFICE ALMATY
RUEHNT/AMEMBASSY TASHKENK

UNCLAS ASTANA 002686 
 
SIPDIS 
 
STATE FOR INL/AAE (ALTON), G/TIP (FARAJ), SCA/CEN (O'MARA), SCA/RA 
(PFLEIDERER), TASHKENT FOR ALLEN 
 
SENSITIVE 
 
SIPDIS 
 
C O R R E C T E D  C O P Y  added addressee tashkenk 
 
E.O. 12958: N/A 
TAGS: SNAR KCRM KCOR PREL PGOV KZ UZ
SUBJECT: KAZAKHSTAN: URALSK COURT CONVICTS TWO WOMEN FOR TRAFFICKING 
IN MINORS 
 
1. (U) Summary: On September 19, the district court in the western 
Kazakhstani city of Uralsk convicted and sentenced two women for 
trafficking in minors.  End summary. 
 
2. (U) In December 2006 the oblast-level Department of Interior 
received information about two schoolgirls aged 15 and 16 who 
disappeared from Volodarovka and Rubezhka villages in the Zelenovsky 
region.  According to investigators, both girls were from poor 
families and were trafficked to Atyrau for sexual exploitation.  The 
main defendant was a 23-year old unemployed woman who worked in 
collusion with her female friend to lure the girls into prostitution 
in Atyrau. 
 
3. (SBU) Interfax Kazakhstan reported on September 21 that both 
women were convicted of kidnapping, illegal deprivation of freedom, 
and recruiting into prostitution, and received prison sentences of 7 
years each.  The Criminal Police Department in the Ministry of 
Interior confirmed the substance of the story as reported by 
Interfax. 
 
ORDWAY

Wikileaks

07ASTANA2613, KAZAKHSTAN NONCOMMITTAL ON CONTRIBUTING TO SPECIAL TRIBUNAL

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Reference ID Created Released Classification Origin
07ASTANA2613 2007-09-20 10:07 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO8435
RR RUEHAST
DE RUEHTA #2613 2631007
ZNR UUUUU ZZH
R 201007Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0742
INFO RUCNDT/USMISSION USUN NEW YORK 1884
RUEHAST/USOFFICE ALMATY

UNCLAS ASTANA 002613 
 
SIPDIS 
 
DEPARTMENT FOR IO/UNP 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV UNSC LE KZ
SUBJECT: KAZAKHSTAN NONCOMMITTAL ON CONTRIBUTING TO SPECIAL TRIBUNAL 
FOR LEBANON 
 
REF: State 129919 
 
Poloff delivered reftel demarche to Amanbek Demesinov, director of 
the international organizations section of the Ministry of Foreign 
Affairs on September 20. Demesinov said that the Government of 
Kazakhstan was not prepared to decide the issue at this point, and 
would take it under consideration.  He also said that the Government 
of Kazakhstan preferred to wait for the official solicitation from 
the United Nations. Demesinov reported that Deputy Foreign Minister 
Yerzhan Kazykhanov would make the final decision on the matter. 
Kazykhanov is currently in New York preparing for President 
Nazarbayev's upcoming visit to UNGA. 
 
 
 
MILAS

Wikileaks

07ASTANA2587, ILEA – CORE COURSE SCHEDULE FOR CY 2008

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Reference ID Created Released Classification Origin
07ASTANA2587 2007-09-19 03:22 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO1531
PP RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHPW
DE RUEHTA #2587 2620322
ZNR UUUUU ZZH
P 190322Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 0718
INFO RUEHUP/AMEMBASSY BUDAPEST 0123
RUEHAST/USOFFICE ALMATY
RUCNCLS/SCA COLLECTIVE

UNCLAS ASTANA 002587 
 
SIPDIS 
 
STATE FOR INL/C (KENNEDY), SCA/CEN (OMARA), INL/AAE (ALTON), 
BUDAPEST FOR ILEA 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR KCRM ASEC HU KZ
SUBJECT: ILEA - CORE COURSE SCHEDULE FOR CY 2008 
 
REF: SECSTATE 113786 
 
In response to reftel, International Narcotics and Law Enforcement 
Program Manager Elena Beskrovnaya is the point of contact 
responsible for the International Law Enforcement Academy (ILEA) 
program at post.  Ms Beskrovnaya's contact information is as 
follows: office phone (+7-7172) 70-23-14, fax (+7 7172) 70-22-87, 
cell (+7-777-270-6055).  E-mail: BeskrovnayaE "at" state.gov. 
 
ORDWAY

Wikileaks

07ASTANA2586, KASHAGAN: THUS FAR, COMMERCIAL DISPUTE, NOT

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Reference ID Created Released Classification Origin
07ASTANA2586 2007-09-18 23:57 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Astana

VZCZCXRO1192
RR RUEHDBU
DE RUEHTA #2586/01 2612357
ZNY CCCCC ZZH
R 182357Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0715
INFO RUCNCIS/CIS COLLECTIVE 0259
RUEHAK/AMEMBASSY ANKARA 2101
RUEHBUL/AMEMBASSY KABUL 0353
RUEHNE/AMEMBASSY NEW DELHI 0474
RUEHRO/AMEMBASSY ROME 0365
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002586 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN 
DEPT PASS TO OPIC - BALLINGER 
DEPT PASS TO TDA FOR STEIN, EXIM, FOR GLAZER 
DEPT PASS TO AID - EE PHILIPS/RUSHING 
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS 
USDOC FOR 6110/ITA/TD/BI/RHALPERN 
ANKARA FOR CFC 
 
E.O. 12958: DECL: 09/19/2017 
TAGS: ECON EIND ENRG EPET EFIN EINV KZ
SUBJECT: KASHAGAN: THUS FAR, COMMERCIAL DISPUTE, NOT 
SAKHALIN II 
 
Classified By: AMBASSADOR ORDWAY FOR REASONS 1.4(B) AND (D) 
 
1. Summary: (SBU) Spurred on by further delays and rising 
costs at Kashagan, the Government of Kazakhstan (GOK) has 
made clear to the international consortium developing the 
huge oil field of its dissatisfaction with the current 
profit-sharing scheme.  The GOK leadership has indicated that 
it seeks a significant increase in Kazakhstan's share of 
profits under the production sharing agreement and immediate 
compensation "in the billions of dollars" for the latest 
delays. In the interim, development at Kashagan is suspended 
for three months because of environmental violations at the 
site.  With talks underway, both government officials and oil 
company representatives characterize the current conflict as 
a commerical dispute likely to be resolved.  End Summary 
 
Kashagan: Further Delays, Rising Costs 
-------------------------------------- 
 
2. (SBU) In June, the North Caspian Project consortium Agip 
KCO officially notified the GOK of delays and cost overruns 
on Kashagan, one of the world's largest oil projects, with 
estimated reserves of 13 billion barrels.  Commercial 
production is to be delayed from 2008 to 2010 and the costs 
to increase from $56 billion to $136 billion over the life of 
the forty-year contract.  Costs for the first phase of 
development will nearly double, from $10 billion to $19 
billion. 
 
 
3. (SBU) The June announcement was only the latest setback on 
the Kashagan project.  Originally, commercial production was 
to have started in 2005. In February 2004, AGIP KCO and the 
GOK agreed to delay production until 2007-2008. At the time, 
AGIP paid the GOK $150 million for the delays in commercial 
production. Some experts have criticized Eni, the project's 
operator (the consortium also includes Exxon Mobil, Shell, 
Total, Conoco Phillips, and IMPEX) for an overly exuberant 
forecast of costs and production schedules for an extremely 
difficult project. 
 
Kashagan Shut Down, New Terms Sought 
------------------------------------ 
 
4. (SBU) Agip's difficulties have continued through the 
summer.  On August 27, the Ministry of Environmental 
Protection declared that it was suspending work at Kashagan 
for three months due to environmental violations.  Serzhan 
Duysenbayev, acting Chairman of the Finance Ministry's 
Customs Control Committee, announced that several criminal 
cases have been initiated against Agip's affiliates for 
evading customs duties.  The Ministry of Emergency Situations 
stated that it will shut down Agip's oil and gas processing 
facility, which is under construction, for non-compliance 
with fire norms. 
 
5. (SBU) Most significantly, Agip has faced a GOK clearly 
displeased with the latest developments and dissatisfied with 
the terms of its production sharing agreement (PSA).  Prime 
Minister Masimov stated publicly that "the change in the 
terms of the Kashagan development means the contract's 
change." Kazakhstani officials have declared in discussions 
that they seek to raise Kazakhstan's share of profits under 
the PSA from 10% to 40%.  The GOK has also bemoamed the 
near-term detrimental effects of further delays.  According 
to Vice-Minister of Finance Yergozhin, the GOK had been 
expecting $1.2 or 1.3 billion in revenue from the project 
starting in 2008. Kazakhstan, he told the media, is expecting 
compensation in "the range of billions of dollars." (Note: 
Under the terms of the PSA, Agip is not obligated to make 
payments to the GOK until development costs are recovered. 
End Note) 
 
6. (SBU)  Eni's position as operator of the Kashagan project 
has also been made tenuous by the delays and cost overruns. 
At the Eurasia Energy Forum in Astana on September 6, Masimov 
suggested a larger role for KazMunayGas. "In line with our 
 
ASTANA 00002586  002 OF 003 
 
 
targets and requests voiced by the president of our country, 
KazMunayGas has to become a second operator of the project. 
If consortium members decline Kazakhstan's terms, we have 
plan 'B,' about which I will tell you later," he said. 
Yergozhin stated to the media that Kazakhstan would "look 
positively" on a proposal to put a local company in control 
or to operate the project jointly. 
 
7. (SBU) On September 11, MasimNO)6nnounced that negotiations with 
Agip will last until October 22. 
 
8. (SBU) On September 12, Yerlan Nigmatulin, head of the 
Mazh
ilis (lower house of parliament) Committee on Ecology and 
Mineral Resources, stated that the Mazhilis is considering an 
amendment to the "Law on Subsoil and Subsoil Use." The 
proposed amendment gives the GOK the right to annul or amend 
contracts in cases of "national security threats caused by 
investors' actions." The new law would apply retroactively. 
The basis for the move was "the Kashagan conflict", he said. 
Nigmatulin expects the amendments to be adopted by October 
22, the end of the 60 day period of "friendly negotiations" 
between the GOK and Agip KCO. 
 
 
GOK: Foreign Investors Have No Cause For Concern 
--------------------------------------------- --- 
 
9.(C) In a meeting with the Ambassador, Prime Minister 
Masimov emphasized that Kazakhstan is "not trying to push 
foreigners out."  Masimov described Kashagan as a commercial 
dispute, noting that according to GOK analysis Kazakhstan 
will net nothing under the current PSA because of the rising 
costs. Masimov also said that "everyone agrees that Eni has 
been totally incompetent." Nevertheless, no criminal charges 
will be brought, and foreign investors have no cause for 
concern.  Masimov laughed at a rumor that Lukoil might take 
the lead at Kashagan.  In a separate meeting with the DCM, 
Minister of Finance Yergozhin said that the environmental 
inspections at Kashagan have been part of normal 
investigations. 
 
10. (C) Representatives from Conoco Philips told the 
Ambassador that the GOK is seeking compensation outside of 
the PSA.  They were not panicked about the conflict, saying 
that everyone agrees it will be settled and noting that, in 
comparison to Russia, they still feel welcomed in Kazakhstan 
("it is always refreshing to come here").  Nick Olds, 
Conoco-Philips Kazakhstan Country Manager, did not refute 
criticisms that have been levelled at Eni.  "Eni is not doing 
a lot to redeem themselves," he said. 
 
11. (C) In a September 17 conversation with the Ambassador, 
First Vice President of KMG Maksat Idenov, who is now the 
GOK's chief negotiator with the consortium, acknowledged that 
the GOK cannot, under the terms of the PSA, change the 
operator.  He noted, however, that the companies in the 
consortium can and are now interested in doing so.  Idenov 
played down the September 12 expulsion of a Conoco Philips 
representative from a GOK-consortium meeting.  The 
Kazakhstani side, Idenov explained, had asked consortium 
members to send to the meetings executives empowered to make 
decisions ("not notetakers") which, he asserted, Conoco 
Philips failed to do.  Speaking to the Ambassador, a Conoco 
Philips representative blamed the episode on a 
misunderstanding of the company's corporate structure. 
 
12. (C) Comment: The GOK has strong reason to be displeased 
with events at Kashagan.  Despite the public fireworks, 
however, we expect the matter will be resolved in a manner 
acceptable to all parties, although likely after the October 
22 date established for the end of negotiations.   While the 
GOK will seek better terms, and is almost certain to receive 
them, it is unlikely to make any rash moves that will 
 
ASTANA 00002586  003 OF 003 
 
 
negatively impact the foreign investor climate in Kazakhstan, 
particularly when Kazakhstan is aggresively seeking 
investment in its non-extractive sectors.  Furthermore, 
Kazakhstan has generally proven itself a reliable partner in 
the energy sector; while Kashagan has gathered most of the 
recent publicity, the country's two other huge oil projects, 
Tengiz and Karachaganak, continue to proceed smoothly and to 
the satisfaction of all parties involved. End Comment 
ORDWAY

Wikileaks

07ASTANA2581, Kazakhstan Moves Cautiously Toward KAZBRIG Deployment;

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Reference ID Created Released Classification Origin
07ASTANA2581 2007-09-18 23:32 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1173
RR RUEHAST RUEHBI RUEHBZ RUEHCI RUEHDBU RUEHLH RUEHPW
DE RUEHTA #2581/01 2612332
ZNR UUUUU ZZH
R 182332Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0711
INFO RUEHAST/USOFFICE ALMATY
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 002581 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL KPKO UNSC MASS KZ
 
SUBJECT:  Kazakhstan Moves Cautiously Toward KAZBRIG Deployment; 
Requesting U.S. Guidance 
 
REF: A) ASTANA 1808 B) STATE 90022 
 
ASTANA 00002581  001.2 OF 002 
 
 
 
1. (SBU) Summary:  The Government of Kazakhstan (GOK) has indicated 
that it is ready to commit units from its light infantry brigade, 
"KAZBRIG" to an overseas Peace Support Operation (PSO).  An official 
announcement is expected after the details of the deployment 
(location, command and control ((C2)) relationships, timing, size, 
and support) have been determined.   GOK Air Mobile Forces (AMF) has 
discreetly requested U.S. input into their planning process and is 
seeking U.S. advice in determining these details.  Five areas of 
operation are being considered: Afghanistan,Darfur/Sudan, Kosovo, 
Lebanon, Iraq.  AMF has asked that U.S. officials keep this 
information in confidence until the GOK has made an official 
announcement of its intentions.  End summary. 
 
------------- 
ANNOUNCEMENT 
------------- 
 
2. (U) While speaking on camera with the British Defense Attach 
(DATT) during Steppe Eagle 2007 opening ceremonies, Chief of Defense 
(ChoD) and former MinDef, General of the Army Mukhtar Altynbayev 
publicly stated that Kazakhstan is ready to commit to deploying 
troops in support of PSOs.  Steppe Eagle is a bilateral GOK-UK 
military exercise in which U.S. forces also participate.  The goal 
of the exercise is to prepare a cadre of GOK military forces for 
PSOs.  The opening ceremony, which was covered by television and 
mass-media, took place on 10 September 2007, on the Illiskii 
Training Area, northwest of the city of Almaty. 
 
3. (SBU) Following Altynbayev's public comments, General-Major (U.S. 
equivalent: Brigadier General) Murat Maikeyev, Commander AMF, told 
U.S. Air Attach that more information, as well as a request for 
U.S. input, would be forthcoming.  This came during a teleconference 
between U.S. DATT and a senior member of the AMF planning staff (and 
confidant of Gen Maikeyev) on 12 September. 
 
----------- 
BACKGROUND 
----------- 
 
4. (SBU) This announcement follows several months of intense 
discussion within the AMF resulting in a clear understanding that 
KAZBRIG must deploy in the very near future.  For the past two 
years, General-Major Maikeyev, has been receiving guidance from U.S. 
and UK DATTs.  In March 2007, with their inputs, Maikeyev put the 
final touches on a proposal for the MinDef, stating that KAZBRIG 
needed to deploy.  Maikeyev told the U.S. DATT that he would need 
six months to bring his plan to fruition (which coincided nicely 
with the Steppe Eagle Exercise). 
 
----------- 
MOTIVATION 
----------- 
 
5.(SBU) GOK and AMF need to deploy KAZBRIG for three reasons; First, 
a deployment would improve KAZBRIG morale and troop retention.  In 
the past, KAZBRIG has had difficulty retaining enough trained 
soldiers to remain effective due to low morale, and many of the 
soldiers which have received military and language training from the 
US and UK have left the unit; Second, President Nazarbayev has 
declared that Kazakhstan will participate in global (preferably UN) 
humanitarian/PSOs; Third, U.S. and UK have made it clear to GOK that 
deploying KAZBRIG to a meaningful mission and location is one of the 
primary reasons that they are receiving military training and 
equipment. 
 
-------------------------- 
LOCATION & C2 RELATIONSHIPS 
---------------------------- 
 
6. (SBU) AMF is considering five deployment locations listed in 
approximate order of preference; Afghanistan,Darfur/Sudan, Kosovo,}QQQj=JQQqda['Qeployment to a Provisional Reconstruction Team (PRT) in a 
relatively secure part of Afghanistan may be its best fit.  AMF will 
deploy an entirely inexperienced light infantry company for the 
first time.  It desires a deployment to a less dangerous location, 
and does not believe sending additional forces to Iraq would be in 
its best interest.  AMF explained that Kosovo is probably not 
politically acceptable to the GOK due to differences between the 
U.S. and Russia over its future (the GOK does not want to be seen as 
playing toward one side or the other).  AMF liked certain aspects of 
both the Darfur/Sudan and Lebanon scenarios, however, it wants to 
deploy where the operational language will be English, not French. 
The KAZBRIG has invested heavily in English-laaM0(Qcapability to use.  It also 
wants to deploy to an 
 
ASTANA 00002581  002.2 OF 002 
 
 
area where it can benefit from U.S. assistance, and is concerned 
that this might be more difficult if it were to deploy under French 
leadership. 
 
--------------- 
TIMING & SIZE 
--------------- 
 
7. (SBU) AMF would like to deploy a platoon sized force (approx. 35 
troops) by mid-2008.  It expects to increase this to a company sized 
unit (approx. 102 troops) shortly thereafter.  The goal is to use 
one of the eventual three infantry battalions of the KAZBRIG to ke
ep 
a light infantry company in constant rotation by the end of 2009. 
 
---------------------------- 
U.S., NATO, or U.N. SUPPORT 
---------------------------- 
8. (SBU) AMF is seeking information about available funds to assist 
their forces to deploy to a PSO.  They are interested in information 
on U.S., NATO, and U.N. financial and logistical support, as well as 
predeployment training programs, and will include availability of 
this support into their decision making process. 
 
----------------------- 
REQUEST FOR U.S. INPUT 
------------------------ 
 
9. (SBU) AMF has discreetly requested U.S. input into their planning 
process and is seeking the advice of U.S. government agencies, and 
U.S. delegations to international agencies, in determining the 
details of the deployment.  Post requests that this information be 
consolidated for reply and submission at a later date. 
 
------------------------------------- 
EXPECTAION THAT INFORMATION BE KEPT IN U.S. CONFIDENCE 
------------------------------------- 
 
10. (SBU) In requesting U.S. input into their planning process, AMF 
has asked that U.S. officials keep this information in confidence. 
AMF is working to determine the details of a proposal that they will 
submit to the GOK approval, and they cannot commit their leadership 
to a course of action before a final decision has been made.  They 
understand that various U.S. agencies and delegations (NATO, U.N. 
etc.) will be brought into the discussion, but they have 
specifically requested that discussion of the specifics of this 
deployment be limited to the U.S. government.  They request that it 
not be brought up in any concrete manner to coalition partners or 
announced in any public forum until after the GOK makes an official 
public announcement of its intentions.  We assured AMF that the U.S. 
government would honor this request.

Wikileaks

07ASTANA2575, ILEA – CORE COURSE SCHEDULE FOR CY 2008

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Discussing cables
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Reference ID Created Released Classification Origin
07ASTANA2575 2007-09-18 05:52 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0139
PP RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHPW
DE RUEHTA #2575 2610552
ZNR UUUUU ZZH
P 180552Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 0710
INFO RUEHUP/AMEMBASSY BUDAPEST 0122
RUEHAST/USOFFICE ALMATY
RUCNCLS/SCA COLLECTIVE

UNCLAS ASTANA 002575 
 
SIPDIS 
 
STATE FOR INL/C (KENNEDY), SCA/CEN (OMARA), INL/AAE (ALTON), 
BUDAPEST FOR ILEA 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR KCRM ASEC HU KZ
SUBJECT: ILEA - CORE COURSE SCHEDULE FOR CY 2008 
 
REF: SECSTATE 113786 
 
In response to reftel, International Narcotics and Law Enforcement 
Program Manager Elena Beskrovnaya is the point of contact 
responsible for the International Law Enforcement Academy (ILEA) 
program at post.  Ms Beskrovnaya's contact information is as 
follows: office phone (+7-7172) 70-23-14, fax (+7 7172) 70-22-87, 
cell (+7-777-270-6055).  E-mail: BeskrovnayaE "at" state.gov. 
 
ORDWAY

Wikileaks

07ASTANA2541, KAZAKHSTAN READY TO DEFEND RECORD AT OSCE HUMAN DIMENSION

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Reference ID Created Released Classification Origin
07ASTANA2541 2007-09-14 08:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7654
RR RUEHAST
DE RUEHTA #2541/01 2570826
ZNR UUUUU ZZH
R 140826Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0680
INFO RUEHAST/USOFFICE ALMATY
RUEHVEN/USMISSION USOSCE 1827

UNCLAS SECTION 01 OF 02 ASTANA 002541 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM PREL OSCE KZ
SUBJECT: KAZAKHSTAN READY TO DEFEND RECORD AT OSCE HUMAN DIMENSION 
IMPLEMENTATION MEETING 
 
REF: State 126089 
 
1. (SBU) Summary: On September 12, Poloff delivered reftel demarche 
to Yerkin Akhinzhanov, director of the European Cooperation 
Department in the Ministry of Foreign Affairs. Akhinzhanov was 
joined by several members of Kazakhstan's delegation to the 
forthcoming OSCE Human Dimension Implementation Meeting, which will 
take place in Warsaw from September 24 through October 5. 
Akhinzhanov listened respectfully to the demarche points and 
appreciated the preview of USG concerns.  He then presented a 
vigorous and combative defense of Kazakhstan's record on all the 
points in a meeting that lasted two hours.  End summary. 
 
---------------------------------------- 
KAZAKHSTAN ACTIVELY PREPARING FOR WARSAW 
---------------------------------------- 
 
2. (SBU) On September 12, Poloff delivered reftel demarche to 
Akhinzhanov and several members of Kazakhstan's delegation to the 
forthcoming OSCE Human Dimension Implementation Meeting in Warsaw. 
Kazakhstan plans to send a large delegation, which will be headed by 
Sagynbek Tursunov, chairman of the Presidential Human Rights 
Commission and newly elected Mazhilis deputy. Akhinzhanov said that 
the delegation is actively preparing for the meeting, and 
acknowledged that Kazakhstan's human dimension record will face 
close scrutiny in light of Kazakhstan's bid to chair the OSCE. 
 
3. (SBU) Akhinzhanov appreciated the preview of USG concerns 
contained in the reftel demarche, and provided Poloff with a 
thorough rebuttal or response to each concern during the two-hour 
meeting.  He also expressed frustration that Kazakhstan does not get 
enough credit for the many advances it has made over the past 15 
years, and urged Poloff to instruct the USG delegation to give 
Kazakhstan credit where appropriate and remember the broader 
historical and regional context. 
 
--------------------- 
ELECTION SHORTCOMINGS 
--------------------- 
 
4. (SBU) With respect to the recent parliamentary elections, 
Akhinzhanov said that all alleged violations have been recorded and 
documented, and the Central Election Committee (CEC) has or will 
conduct open and transparent investigations.  He said that the 
violations did not affect the final result of the election.  He 
criticized the ODIHR Election Observation Mission for refusing to 
provide details of the violations it described in its August 19 
preliminary report.  He said that many of the alleged violations 
could be "simple misunderstandings", but the CEC cannot investigate 
without specific information about where and when they occurred. 
Akhinzhanov said that the CEC operates far more transparently than 
the ODIHR Election Observation Mission. 
 
5. (SBU) Nevertheless, he said that the GOK is continuing to work 
with the OSCE and ODIHR to resolve outstanding issues and improve 
the electoral process.  He criticized the OSCE for not giving 
Kazakhstan credit for improvements in its electoral legislation 
since the 2004 parliamentary elections.  He also noted that 
additional election law amendments were still working their way 
through the legislative process, and that the GOK was trying to 
expedite some of these legislative reforms in time for the Madrid 
ministerial meeting in November.  However, Akhinzhanov was not 
certain that the legislation would be ready in time. 
 
----------------------------- 
RECENT CONSTITUTIONAL REFORMS 
----------------------------- 
 
6. (SBU) In response to concerns about the recent constitutional 
amendments, particularly the provision removing term limits for 
President Nazarbayev, Akhinzhanov said that the United States and 
other critics lack understanding of the unique situation in 
Kazakhstan.  He compared the situation in Kazakhstan to the 
situation in the United States during World War II, and said that 
President Nazarbayev is a key figure in Kazakhstan's development, 
much like President Roosevelt's leadership was crucial to the United 
States during World War II.  He said that if term limits had been in 
place for Franklin Roosevelt during World War II, the US government 
would have exempted him in the same way that Kazakhstani government 
just exempted Nazarbayev.  He also urged the USG delegation in 
Warsaw to recognize the legitimacy of the term limits change, 
because the change was made by the people through their parliament. 
 
7. (SBU) Akhinzhanov said that the Kazakhstani delegation would very 
much appreciate recognition of the positive aspects of the recent 
constitutional changes, including the removal of the power of arrest 
from procurators, which he characterized as a long, hard fought 
battle between the procurator general's office and other elements in 
the government.  He urged the USG delegation to recognize the 
 
ASTANA 00002541  002 OF 002 
 
 
broader historical context concerning Kazakhstan's progress, noting 
that Kazakhstan has made significant strides in 15 years and has 
done so while maintaining stability in an unstable region. 
 
---------------
- 
INTERNET FREEDOM 
---------------- 
 
8. (SBU) Akhinzhanov responded defensively to concerns about 
Internet freedom in Kazakhstan and the requirement for websites 
using the .kz domain to have servers physically based in Kazakhstan. 
 He said that the .kz domain is owned by the GOK, and "we can do 
what we want with it."  He also explained that any restrictions 
concerning the use of the domain were purely for technical or 
copyright reasons, and claimed that there is complete Internet 
freedom in Kazakhstan.  He said that Internet websites in Kazakhstan 
contain a wide diversity of viewpoints, and that the GOK's technical 
regulation of the Internet should not be turned into a political 
issue. 
 
------------- 
HARE KRISHNAS 
------------- 
 
9. (SBU) Finally, with respect to the Hare Krishna issue, 
Akhinzhanov repeated several arguments that various government 
officials have used in the past.  He emphatically stated that the 
dispute was not about religion; rather, he said, the Hare Krishnas 
obtained their land illegally, through forgery, and that the 
government was simply upholding the rule of law by evicting them. 
He explained that the GOK had actually gone out of its way to 
protect the Hare Krishnas by not pressing criminal charges for 
forgery and by offering to find them replacement land, which he 
criticized the Hare Krishnas for refusing to accept.  He reiterated 
that the Hare Krishnas are registered in 10 different oblasts in 
Kazakhstan and that any comments by local government officials 
hostile to the Hare Krishna faith do not represent official 
government policy. Akhinzhanov also introduced a new argument, 
stating that Kazakhstan must enforce the rule of law with respect to 
the Hare Krishna in order to avoid encouraging radical groups such 
as Hizb ut-Tahrir. Poloff replied that linking the Hare Krishnas to 
extremist groups such as the illegal Hizb ut-Tahrir would not help 
Kazakhstan's position on the issue, but Akhinzhanov did not take the 
point. 
 
10. (SBU) Akhinzhanov expressed dismay that the Hare Krishna issue 
was receiving so much attention, and said that continued USG 
pressure on the issue could damage the bilateral relationship 
between the United States and Kazakhstan.  He said that discussions 
to resolve the dispute were ongoing, but neither the United States 
nor Kazakhstani authorities in Astana had the right to interfere 
with court decisions. Poloff replied that the bilateral relationship 
between United States and Kazakhstan was much broader than the Hare 
Krishna issue, but that the bulldozing of Hare Krishna homes by 
local government authorities was bound to attract international 
attention, particularly in light of Kazakhstan's aspiration to chair 
the OSCE. 
 
-------------------------------------------- 
MFA APPEALS FOR TOLERANCE AND UNDERSTANDING 
------------------------------------------- 
 
11. (SBU) At this, Akhinzhanov acknowledged that Kazakhstan's record 
would receive close scrutiny, because Kazakhstan is a 
"non-traditional" candidate for chair of the OSCE.  He said that no 
country is perfect, and that past chairs of the OSCE have had worse 
records in certain areas, but that Kazakhstan was prepared to defend 
and explain its record.  He expressed hope that the USG would be 
tolerant of Kazakhstan's unique circumstances and would acknowledge 
Kazakhstan's overall positive record in the last 15 years. 
 
12. (SBU) In conclusion, he said that Kazakhstan hopes to be more 
proactive in all three dimensions of the OSCE, and was sending a 
large delegation to the Human Dimension Implementation Meeting to 
show its commitment to the issue.  He also said that certain 
factions within the government, including the MFA, were leading the 
effort to promote reform and improve Kazakhstan's human dimension 
record, but that other parts of the government were opposed or 
uncooperative.  He appealed for understanding and patience, and said 
that harsh international criticism of Kazakhstan would consolidate 
and strengthen the factions opposed to reform in Kazakhstan. 
 
 
 
ORDWAY

Wikileaks

07ASTANA2511, MERMOUD DISCUSSES PUBLIC-PRIVATE PARTNERSHIP INITIATIVE

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Reference ID Created Released Classification Origin
07ASTANA2511 2007-09-13 09:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6438
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #2511/01 2560926
ZNR UUUUU ZZH
R 130926Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0649
INFO RUEHAST/USOFFICE ALMATY
RUCNCIS/CIS COLLECTIVE 0255
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 04 ASTANA 002511 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN - O'MARA 
 
E.O. 12958: N/A 
TAGS: ECON ECIN EINV ELTN PGOV PREL KZ
SUBJECT: MERMOUD DISCUSSES PUBLIC-PRIVATE PARTNERSHIP INITIATIVE 
WITH KAZAKHSTANI GOVERNMENT, BUSINESS 
 
Ref: Astana 1243 
 
ASTANA 00002511  001.2 OF 004 
 
 
1. (SBU) Summary.  In September 3-5 meetings with leaders of 
Kazakhstan's government and business, Special Representative for 
Commercial and Business Affairs J. Frank Mermoud discussed the 
planned October 22 Washington inauguration of the bilateral 
U.S.-Kazakhstani Public Private Partnership Initiative (PPPI) and 
the direction the Initiative should take.  S/R Mermoud's 
interlocutors reacted favorably to the proposed Initiative, hailing 
its focus on improving Kazakhstan's investment climate as well as 
its potential role in strengthening business, investment, economic, 
and educational links between the U.S. and Kazakhstan.  In 
particular, Prime Minister Masimov welcomed the idea of discussing 
"tough issues" that negatively impact Kazakhstan's business 
environment.  Masimov also assured S/R Mermoud that he will assist 
in achieving speedy resolution of two current hurdles on the 
bilateral economic front: the double-taxation Parker Drilling 
dispute and the Kazakhstani Customs Committee's newly introduced 
requirement for export declarations, an unintended consequence of 
which is prevention of entry of U.S. goods into Kazakhstan.  End 
summary. 
 
2. (SBU) S/R Mermoud met with the following representatives of the 
Kazakhstani government and business sector: 
 
September 3 (Almaty): 
-- Raimbek Batalov, President of the Forum of Entrepreneurs 
-- Nurlan Kapparov, President of KazInvest Bank 
 
September 4 (Almaty): 
-- Dennis Price, General Director of "Sayran" (a subsidiary of 
Kazakhstani construction conglomerate "Kuat"), and former head of 
Kazakhstan's Foreign Investors' Council (representing Access 
Industries) 
-- Gregory Vojack, Managing Partner - Bracewell & Giuliani, Central 
Asia 
-- Kenneth Mack, President of the American Chamber of Commerce, 
Partner - Chadbourne & Parke 
-- Mukhtar Ablyazov, Chairman of the Board - Bank Turan Alem 
-- Alexander Deriglazov, CEO - Meloman Ltd. 
 
September 5 (Astana): 
-- Azat Peruashev, Chairman - National Economic Chamber "Union 
Atameken" 
-- Serik Akhmetov, Minister of Transport and Communications 
-- Natalya Korzhova, Minister of Finance (with Nurlan Rakhmetov, 
Chairman of the Tax Committee) 
-- Karim Masimov, Prime Minister 
-- Kayrat Kelimbetov, Chairman - Kazyna Sustainable Development 
Fund. 
 
The Initiative - the Government Perspective... 
-------------------------------------------- 
 
3. (SBU) S/R Mermoud's discussions on the focus of the 
soon-to-be-inaugurated bilateral U.S.-Kazakhstani Public-Private 
Partnership Initiative followed his meetings in April (reftel).  The 
Initiative's stated focus on addressing the key problems in the 
Kazakhstani business environment (particularly corruption), 
facilitating the Kazakhstani government's (GOK) goals of increasing 
economic competitiveness and diversifying away from energy, and 
strengthening links (including educational) between the two 
countries' private sectors was broadly welcomed by GOK officials, as 
well as by executives of Kazakhstani companies and U.S. companies 
operating in Kazakhstan.  Prime Minister Masimov said he plans to 
attend the October 22 PPPI inauguration in Washington and was 
receptive to the idea of an open discussion of the problems plaguing 
Kazakhstan's business environment.  "It is important to address the 
tough issues," stated Masimov, adding that the discussion "should 
not be sweet."  Masimov added that he would like to make his October 
trip to the U.S., his first as a prime minister, a strong 
demonstration of the importance of U.S.-Kazakhstani relations and of 
Kazakhstan's affinity for western standards.  Transport Minister 
Akhmetov drew links between the PPPI and Kazakhstan's domestic 
public-private partnership program, "the Thirty Corporate Leaders" 
(announced earlier this year, see reftel), stating, "we do need 
feedback from the private sector" and adding that he would be 
"grateful for the invitation" to the PPPI inauguration. 
 
...And the Private Sector View 
---------------------------- 
 
4. (SBU) Raimbek Batalov, President of the Almaty-based Forum of 
Entrepreneurs (as well as a prominent businessman, heading the 
"Raimbek Group," a large retail chain), was strongly supportive of 
the Initiative.  He outlined three prerequisites for the 
Initiative's success: 
 
ASTANA 00002511  002.2 OF 004 
 
 
-- The idea should be embodied into a program ("we are ready to work 
on this," Batalov added); 
-- Relevant business associations should be brought in (citing the 
Forum and Atameken [see below]) 
-- Financing needs to be arranged (calling this issue "a sore 
point," since Kazakhstani associations and the business sector are 
"still young" and suggesting a combination of
government support, 
self-financing, and corporate financing). 
 
5. (SBU) Batalov also drew parallels between the thrust of the 
Initiative and his Forum's priorities.  The Forum, he said, 
currently focuses (i.e. produces research and analysis) on the 
following issues: 
-- Struggle with corruption 
-- Social responsibility of small- and medium-sized enterprises 
(SMEs) 
-- Mini-MBA (training for small business) 
-- Transit corridors 
-- Trans-border trade 
-- Tax & customs 
Batalov added that Kazakhstan is currently facing a "crisis" in the 
lack of skilled labor: there are "lots of lawyers and economists but 
very few welders and machine operators." 
 
6. (SBU) Batalov cited a number of examples of the government's 
"clumsiness," particularly the recent (and ongoing) aftermath of the 
Customs Committee's introduction of an export declaration 
requirement for goods entering Kazakhstan (see paragraph 15).  He 
also mentioned the implementation, by the Ministry of Industry and 
Trade, of the "made in Kazakhstan" stamp.  Each stamp, according to 
Batalov, costs KZT 3-4 (2.5-3.5 cents) to produce; the Ministry, 
however, has failed to print enough stamps, leading to 2.5 month 
delays for importation of some products, such as alcohol beverages. 
Another recent example, Batalov continued, is the Environment 
Ministry's new requirement for all automobile owners to fill out a 
declaration form on the condition of his vehicle.  As a result, 
Batalov said, "huge queues can be expected." 
 
7. (SBU) Batalov clearly saw a strong nexus between the Forum's work 
and the PPPI's priorities.  He expressed genuine regret about being 
unable to attend the October 22 inauguration due to a long-standing 
personal commitment and proposed sending to the event his deputy, 
the Forum's Executive Director, instead.  Finally, he sounded a 
cautiously optimistic, if mixed, note about his Forum's coexistence 
with the "Union Atameken" (recently rechristened from a "Union of 
Entrepreneurs" into a "National Economic Chamber").  Although, 
Batalov said, Atameken is still using "uncompetitive" means to 
secure for itself the official status of a national trade chamber, a 
"division of labor" of sorts is emerging between the Forum and the 
Atameken.  The former, Batalov said, focuses on small- and 
medium-sized enterprises; the latter is an umbrella organization for 
various business associations and large companies. 
 
8. (SBU) Atameken's Chairman Peruashev expressed a very strong 
interest in developing links with the U.S. business community in 
general and participating in the PPPI specifically.  Although 
Atameken is often seen as a semi-official, instinctively 
pro-government association (talking to Atameken, said Bank Turan 
Alem's (BTA's) Ablyazov, is "like talking to a government 
official"), Peruashev did express criticism toward some of the 
government's economic policies.  The bulk of this criticism fell on 
development institutions: "There is a growing view in the business 
community that development institutions are crowding out the real 
private business, because they are doing business themselves." 
Peruashev made it clear that his intended target was Kazyna, as he 
went on to bemoan some of Kazyna's development institutions' 
excessive focus on short-term profitability at the expense of 
innovation.  "We know," he said, "how development institutions 
operate in Russia and eastern Europe.  We would like to learn how 
they operate in western Europe and the U.S."  Peruashev welcomed S/R 
Mermoud's suggestion to facilitate Kazakhstani-U.S. private sector 
discussions by engaging Atameken with AmCham.  (Comment: While 
Atameken still appears to be a bloated, government-affiliated 
organization, there is a discernible and welcome shift in its 
willingness to offer criticism of Kazyna's (i.e. the government's) 
investment policy.  End comment.) 
 
9.  (SBU) Peruashev portrayed Atameken as a liaison of sorts between 
business and the government.  The organization, he explained, makes 
legislative proposals, particularly in the tax, customs, and 
agricultural arenas.  Other concerns include corruption; 
"raidership;" government interference in business; and 
administrative burdens for opening, running, and closing a business. 
 Peruashev also said that Atameken helps support actual projects by 
Kazakhstani entrepreneurs by "bringing" such projects to development 
institutions.  Finally, while he never actually acknowledged the 
Forum of Entrepreneurs, Peruashev echoed Batalov by stating that 
 
ASTANA 00002511  003.2 OF 004 
 
 
Atameken's focus is on medium-sized and large business. 
 
10. (SBU) Ken Mack of the (Kazakhstan-based) American Chamber of 
Commerce expressed great enthusiasm for the PPPI as a vehicle for 
addressing the problems of the Kazakhstani business climate.  He 
stated his opinion that corruption is "the number one problem, the 
root of all the other ones."  Mack told S/R Mermoud that he has been 
pursuing with Batalov the idea of a joint AmCham-Forum of 
Entrepreneurs paper, which he hopes to have ready by the October 
22nd  PPPI inauguration.  This paper, Mack said, will go into detail 
on how corruption is damaging the economy and provide ideas on how 
it can be stemmed. 
 
11. (SBU) Other representatives of the private sector also welcomed 
the PPPI's goal of raising the difficult issues and shedding light 
on the obstacles to business development in Kazakhstan.  "Another 
voice would be helpful; in this culture persistence pays off," 
stated Dennis Price (of Kuat).  Ablyazov of BTA bemoaned the lack of 
democratic institutions, particularly of a vibrant media, of 
regional officials' accountability (via elections), and of a strong 
judiciary.  He identified these deficits as the root causes of 
corruption and portrayed the government's efforts against corruption 
as window dressing.  Ablyazov endorsed the PPPI's focus on 
corruption, stating, "the more comments like these, the more they 
affect our government...  But the real change will come when 
business penetration is such that people have something to lose and 
something to defend."  He added, however, that as the governing 
elite acquires its own businesses, its interests are becoming more 
similar to those of business, leading to an "evolutionary change." 
 
The "Thirty Corporate Leaders:" Kazakhstan's Domestic PPP 
------------------------------- ------------------------- 
 
12. (SBU) Private sector representatives expressed some optimism 
about the GOK's recently launched domestic public-private 
partnership program, known as "the Thirty Corporate Leaders." 
Batalov called it "not a bad idea."  The plan, he explained, is to 
quickly launch large projects, which would then "pull up" 
medium-sized companies.  "Of course," Batalov mused, "a lot of our 
ideas start out well," strongly implying that implementation tends 
to be the problematic part.  Ablyazov sounded decidedly positive on 
the program, which he described as a m
echanism that forces 
bureaucrats ("from above") to assist business development (in lieu 
of democratic pressure acting "from below").  Ablyazov stated that 
even if only ten successful projects emerge from the program, it 
will still be a major success.  "I believe that in ten years," he 
stated, "this will be a diversifed economy."  Nurlan Kapparov of 
KazInvest Bank sounded equally positive.  The program, he said, 
facilitates close interaction between business and the president on 
a group basis (instead of on individual basis "like before"). 
Although the program does not focus on solving problems for all 
businesses (beyond the chosen thirty or so), it at least initiates 
the conversation in that direction.  "You do thirty half-billion 
dollar projects," summed up Kapparov, "and you've diversified the 
economy." 
 
East-West: The Way Ahead? 
------------------------- 
 
13. (SBU) A theme featuring in several of S/R Mermoud's discussions 
was the prospect of establishing an East-West corridor across 
Kazakhstan for transportation of goods from China to Europe. 
Kapparov stated that such a corridor must bypass Russia, which has 
its own shared border with China and is, therefore, a "competitor." 
The corridor, he explained, would rely on four terminals: in western 
China, on Kazakhstan's Chinese border, on Kazakhstan's Caspian 
coast, and on Georgia's Black Sea coast.  The total cost of the 
project, Kapparov said, would be $1.5-2.0 billion.  Ablyazov 
trumpeted the same idea which, he said, makes sense both politically 
and economically due to Russia's "inflexibility."  The corridor, he 
said, would reduce the transportation time of Chinese goods to 
Europe by 5-6 days (compared to the current sea route) as well as 
lower the cost.  According to Ablyazov, the GOK has already included 
the transport corridor project into its "Thirty Corporate Leaders" 
program. 
 
14. (SBU) Although Transport Minister Akhmetov did not mention the 
East-West corridor, he spoke extensively about transportation 
infrastructure development plans, which appeared consistent with 
building such a corridor.  He mentioned the development of Caspian 
ports, holding tenders for construction of railroads, and building 
toll highways (pointing out that these would likely be the first 
such highways in the CIS).  "We have huge territory and are 
landlocked.  Development of railroads and highways is very important 
to us," said Akhmetov, adding that he sees opportunities for 
involvement by U.S. companies in the development of various 
infrastructure and logistical projects.  S/R Mermoud suggested 
 
ASTANA 00002511  004.2 OF 004 
 
 
consideration of north-south transportation links, particularly to 
Afghanistan, in addition to the East-West corridor. 
 
15. (SBU) Kazyna's Chairman Kelimbetov did provide an indication of 
some Kazakhstani interest in developing regional north-south 
economic links.  Kazyna, Kelimbetov said, is looking at creation of 
joint investment funds with Kyrgyzstan and Tajikistan (each with the 
starting capital of about $100 million).  He added that Kazyna is 
also considering setting up a joint equity fund with Afghanistan but 
called this project "terribly difficult."  At the same time, 
Kelimbetov noted, Kazyna is looking to create a joint investment 
fund with Russia, with a starting capital of $1 billion. 
 
 
Customs and Taxes: the Latest Sagas 
----------------------------------- 
 
16. (SBU) Prime Minister Masimov assured S/R Mermoud that the two 
issues currently affecting U.S. commercial interests in the areas of 
customs and taxation are "within [his] competence]" and should soon 
be resolved.  Commenting on the long-standing Parker Drilling 
dispute under the bilateral U.S.-Kazakhstani tax treaty, Finance 
Minister Korzhova appeared to portray this as an isolated case and 
not a negative signal about Kazakhstan investment climate.  The more 
recent customs problem emerged on August 26, when the Customs 
Committee (which operates under the aegis of the Ministry of 
Finance) abruptly introduced a requirement for submission of export 
declarations for goods entering Kazakhstan.  Since U.S. regulations 
prohibit submission of such declarations, the inflow of U.S. goods 
into Kazakhstan abruptly stopped.  Moreover, new customs regulations 
appear to have briefly prevented entry of hard currency into the 
country, leading to a momentary, panicky sell-off of the tenge. 
Ablyazov called the episode "an example of state institutions 
malfunctioning."  Batalov commented wryly, "in 'normal' countries, 
such measures - if enacted - are well-announced."  S/R Mermoud noted 
to Prime Minister Masimov the importance of resolving both of these 
issues prior to the October 22 inauguration of the bilateral 
Initiative. 
 
Additional Engagement and Advocacy 
--------------------------------- 
 
17. (SBU) S/R Mermoud encouraged further U.S.-Kazakhstani 
public-private engagement on several fronts.  He suggested to Prime 
Minister Masimov the possibility, schedule permitting, of arranging 
a New York Stock Exchange "bell-ringing" during the latter's October 
visit to New York; Masimov responded favorably.  S/R Mermoud also 
recommended that Tax Committee Chairman Rakhmetov engage in dialogue 
with AmCham to facilitate a direct exchange of views and help ensure 
that foreign investors' concerns on taxation are addressed by the 
policymakers.  Rakhmetov accepted the idea.  Further, S/R Mermoud 
encouraged the CEO of Meloman, a pioneer Kazakhstani conglomerate 
importing licensed DVDs and CDs from the U.S. to Kazakhstan, to 
engage with AmCham. 
 
18. (SBU) S/R Mermoud advocated on behalf of Boeing in his 
discussions with Prime Minister Masimov and Transport Minister 
Akhmetov.  (Note: Air Astana, Kazakhstan's de facto domestic 
airline, is considering purchasing wide-body aircraft.  End note.) 
Masimov and Akhmetov praised Boeing but were non-committal in their 
responses.  S/R Mermoud suggested to Masimov the possibility of 
having a signing ceremony with Boeing during his October trip to the 
U.S. 
 
Comment 
------- 
 
19. (SBU) Comment.  Some of S/R Mermoud's more outspoken 
interlocutors astutely pointed out that the development of 
democratic institutions is the surest means of stemming corruption 
that is poisoning Kazakhstan's otherwise attractive business 
environment.  At the same time, there was a broad consensus that the 
proposed bilateral Public-Private Partnership Initiative can serve 
as an effective mechanism for addressing the difficult issues and 
promoting reform.  Combining the tough discussions with appropriate 
"sweeteners" - such as business and educational exchanges and, 
particularly, face time with potential U.S. investors - is likely to 
pique Kazakhstani interest and make the GOK more receptive to 
constructive criticism.  End comment. 
 
20. (U) This cable has been cleared by Special Representative 
Mermoud. 
 &#x0
00A;ORDWAY

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07ASTANA2432, CODEL FALEOMAVAEGA MEETS WITH PRESIDENT NAZARBAYEV

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Reference ID Created Released Classification Origin
07ASTANA2432 2007-09-10 07:42 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7232
RR RUEHDBU
DE RUEHTA #2432/01 2530742
ZNR UUUUU ZZH
R 100742Z SEP 07 ZDK PER MSMC
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0581
INFO RUEHAH/AMEMBASSY ASHGABAT 7241
RUEHEK/AMEMBASSY BISHKEK 8138
RUEHDBU/AMEMBASSY DUSHANBE 2241
RUEHMO/AMEMBASSY MOSCOW 1489
RUEHNT/AMEMBASSY TASHKENT 8032
RUEHVEN/USMISSION USOSCE 1825

UNCLAS SECTION 01 OF 02 ASTANA 002432 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
SCA/CEN FOR M. O'MARA 
 
C O R R E C T E D  C O P Y  original garbled 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KZ
SUBJECT: CODEL FALEOMAVAEGA MEETS WITH PRESIDENT NAZARBAYEV 
 
ASTANA 00002432  001.2 OF 002 
 
 
1. (SBU) Summary: In a one-hour meeting with Congressmen 
Faleomavaega and Cannon and the Ambassador, President 
Nazarbayev discussed Kazakhstan's development, praised U.S.- 
Kazakhstan relations, critiqued U.S. foreign policy and 
offered advice on Russia.  Nazarbayev called Kazakhstan the 
United States' strongest ally in the region on terrorism, 
non-proliferation, and extremism and said that Kazakhstan 
still hopes for U.S. support for its OSCE chairmanship bid. 
He remarked that U.S. talk of spreading democracy in the 
Middle East and Central Asia "raises questions."  In 
Afghanistan, "you can't have democracy," he opined. 
Nazarbayev expressed concern about relations between Russia 
and the West, saying that "no one is setting policy on 
Russia."  End Summary. 
 
2. (SBU) President Nazarbayev began his one-hour meeting with 
Congressmen Faleomavaega and Cannon and the Ambassador by 
thanking the U.S. for its support and for its "friendly 
advice" and "good criticism."  Nazarbayev remarked that U.S. 
assistance is important for Kazakhstan's independence because 
of its difficult position "among Russia, China, and the 
Islamic world." He also highlighted key areas of U.S.- 
Kazakhstan cooperation, calling Kazakhstan the United States' 
strongest regional ally on issues such as non-proliferation, 
terrorism, and extremism.  "We are supporting the U.S in Iraq 
and Afghanistan," he said, "and believe these are our common 
missions."  Nazarbayev added that Kazakhstan is ready for the 
chairmanship of the OSCE, and believes and hopes that the 
U.S. will support its bid. 
 
3. (SBU) Nazarbayev then assessed Kazakhstan's progress.  At 
the time of the collapse of the Soviet Union, Kazakhstan's 
development was ahead of only Turkmenistan and Tajikistan 
among Soviet republics, according to Nazarbayev. Now, he 
said, "we are in first place." In economic and political and 
social achievement, "Kazakhstan is the most progressive," he 
claimed.  Nazarbayev noted that the economy has grown 10% 
annually and that the well-being of the population has 
increased significantly.  He described recent constitutional 
amendments as further advancing democracy by strengthening 
the parliament and giving presidential functions to the 
parliament and local authorities. 
 
4. (SBU) Turning his attention to U.S. foreign policy, 
Nazarbayev said that a missile defense system in Europe might 
be the right idea, but that the timing and manner of 
implementation is wrong.  He lectured on U.S. efforts to 
promote democracy in Central Asia and the Middle East, 
efforts which he believes "raise questions." Many of the 
leaders who support the U.S. in the region are not democrats, 
he said.  The opposition in the region is composed of 
extremists, communists/socialists, and nationalists. 
Nazarbayev emphasized that "here is a different culture" and 
that movement must come gradually.  He was particularly 
skeptical about Afghanistan and Iraq.  "You can't have 
democracy in Afghanistan, he said. "The day your troops leave 
it would be an Islamic country." He predicted a similar 
scenario in Iraq. 
 
5. (SBU) Nazarbayev next analyzed Russia and its relations 
with West.  Talks of a missile defense system are creating a 
wave of nationalism in Russia, opined Nazarbayev.  All 
Russians are applauding as Russia resumes strategic bomber 
flights and pursues a new generation of weapons.  "We don't 
feel very happy about this escalation," said Nazarbayev.  "I 
told Putin this is a stupid policy.  Russia should not 
confront the western world," he added. 
 
6. (SBU) Nazarbayev was also critical of Western strategies 
toward Russia.  "I have a feeling that no one is setting 
policy on Russia," he said.  Russia needs to be embraced, he 
suggested, and not pushed away.  Western countries must 
consider that Russian pride has been hurt with the collapse 
of the Soviet Union, but instead they are talking with a 
"blunt and rude message." This ineffective approach, he 
stated, concerns Kazakhstan because "it splits the world into 
confrontation." 
 
7. (SBU) Finally, Nazarbayev discussed disarmament.  He 
accused nuclear-weapons states of discrimination, because 
they continue to develop their arsenals while others are not 
allowed to pursue nuclear weapons.  He recommended that the 
U.S. reduce its arsenal and promise to stop further 
development of nuclear weapons.  He also suggested that the 
 
ASTANA 00002432  002.2 OF 002 
 
 
U.S. introduce a new treaty to replace the Treaty on the 
Non-Proliferation of Nuclear Weapons that would forbid the 
use, development, or transportation of nuclear weapons. 
 
8. Codel Faleomavaega did not clear this cable. 
ORDWAY

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07ASTANA2414, EXBS: KAZAKHSTAN ADVISOR’S MONTHLY REPORTING CABLE (AUGUST

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Reference ID Created Released Classification Origin
07ASTANA2414 2007-09-07 05:44 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0668
RR RUEHAST RUEHDBU
DE RUEHTA #2414/01 2500544
ZNR UUUUU ZZH
R 070544Z SEP 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0560
RHFJUSC/USCUSTOMS WASHDC
RUEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSJGA/COMDT COGARD WASHINGTON DC
RUEKJCS/SECDEF WASHDC 0059
RHEBAAA/USDOE WASHDC
RUEKJCS/JCS WASHDC
RUCQAAA/USCINCCENT MACDILL AFB FL
RUEHRL/AMEMBASSY BERLIN 0441
RUEHEK/AMEMBASSY BISHKEK 8131
RUEHNT/AMEMBASSY TASHKENT 8025
RUEHKB/AMEMBASSY BAKU 0017
RUEHDBU/AMEMBASSY DUSHANBE 2233
RUEHAH/AMEMBASSY ASHGABAT 7238
RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 03 ASTANA 002414 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR ISN/ECC PVANSON, ACHURCH, JHARTSHORN 
DEPT FOR ISN/ECC-AMT LSPRINGER 
DEPT FOR EUR/ACE RBUCK 
DEPT FOR SCA/RA JSCHLOSSER 
DEPT FOR SCA/CEN MO'MARA 
CBP/INA FOR CDONOFRIO AND RWATT 
USDOE/NNSA CWALKER, TPERRY AND EDESCHLER 
DOC FOR DCREED AND GPETERSEN-BEARD 
USCG FOR BGOLDEN 
AMEMBASSY BERLIN FOR CUSTOMS ATTACHE 
AMEMBASSY TASHKENT, BISHKEK, BAKU, DUSHANBE AND ASHGABAT FOR EXBS 
ADVISORS 
 
E.O. 12958: N/A 
TAGS: ETTC MNUC PARM PREL KSTC KNNP KZ
SUBJECT:  EXBS: KAZAKHSTAN ADVISOR'S MONTHLY REPORTING CABLE (AUGUST 
2007) 
 
I. BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY MANAGERS: 
 
       TDY EXBS Advisor Kevin Cummings arrived at post on August 2, 
2007 and departed on August 31, 2007. Permanent EXBS Advisor Robert 
Colbert is scheduled to arrive at post on October 4, 2007. The EXBS 
Advisor position will not be staffed from the period September 1, 
2007 to October 4, 2007. 
 
 
 
II. COMPLETED ACTIONS FOR THE REPORTING PERIOD 
 
A. SITE ASSESSMENTS AND MEETINGS CONDUCTED 
 
1. On August 14 we received a letter from the Border Guard office in 
Uralsk Region to change the installation location of two of the four 
shelters scheduled for delivery in August-September time period. 
After numerous discussions with Border Guard as to Border Guard 
Headquarters concurrence with the regional request and the 
documentation required by the Department of State to support the 
requested modification, we received a formal request with a valid 
justification from H. Berkaliyev, First Deputy Director, on August 
22, 2007. The document was translated and forwarded to the 
Department of State for review and a decision. The Department 
approved the location change on Sept 24 and the EXBS office has been 
working with the border guard, customs and the contractor to affect 
an expedited clearance. At present the shipment is scheduled to 
arrive at Uralsk on September 10. An EXBS representative will meet 
the convoy of 16 trucks at Uralsk to assist in the clearance 
process. 
 
2. As part of the justification documentation the Border Guard 
provided EXBS with a series of decrees that spelled out the GOK plan 
to establish three major transport corridors. The shelters are going 
to a newly established transport corridor on the border with Russia. 
These documents were shared with INL and DITRO. 
 
3. On August 29 TDY Advisor met with the Customs Head of Head of 
Export and Import Control Department, Mr. Ermek Smagulov. The 
primary purpose of the meeting was to present documents requesting 
an exemption for all duties and taxes related to the above 
referenced importation of four shelters and to inform him as to the 
imminent arrival of a permanent EXBS Advisor and to provide some 
basic background on Mr. Robert Colbert.  Mr. Smagulov expanded the 
meeting to discuss his appreciation for the excellent assistance 
provided Customs under the EXBS program. Apparently he receives 
reports from the field on all training. He wanted to make EXBS aware 
of Kazakh Customs priorities. He would like additional IBIT 
trainings but wanted these trainings to be in Kazakhstan to allow 
for more attendees at each session and a more economic program for 
EXBS. He explained that there are three major customs regions and he 
would like one IBIT delivered in each region. In addition he 
requested Risk Management training and additional Administrative 
Enforcement and PIT training. 
 
 
 
 
 
B.  TRAINING DURING THE REPORTING PERIOD 
 
 1.  No training was delivered during this period, 
 
 
ASTANA 00002414  002 OF 003 
 
 
C. EQUIPMENT DELIVERED DURING THE REPORTING PERIOD 
 
      1. No equipment delivered during this reporting period. 
 
D. IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 
 
 1. Task Order 79 Donations. As indicated above it is expected that 
the four shelters being donated to Border Guard will arrive at 
Uralsk on September 10 and an EXBS representative will assist in 
clearance process. All required documentation was provided to Border 
Guards and Customs by EXBS including exemption request from all 
duties and taxes under the CTR. 
 
 2. Department of Energy Second Line of Defense (DOE/SLD) has begun 
installation of the first portal monitor at the Customs Academy. 
They are awaiting access to the next three sites: Kordai,Karusu and 
Siptai Bitir.  Note that the site access for DOE is being handled by 
the local contractor, N
TC, who has preferred status with Customs 
since they also have a contract with the GOK for maintenance of 
border facilities. 
 
 3. We requested a meeting with the Border Guard for the new Cw 
Guard EXBS Caspian Regional Maritime Advisor, Michael Fisher. 
Requested to meet with the First Deputy Director of Border Guard 
Services in Astana on S%QrED14ith the representatives of the 
Maritime Division of Kazakhstan's Border Service in Aktau. The 
purpose of this visit was to evaluate the status of the vessels, 
negotiate a maintenance agreement with vendors and establish access 
procedures to vessels for EXBS and maintenance personnel. 
 
On August 31, the Border Guard notified EXBS that they would be 
unavailable that week because there was a Border Guard Senior 
Officers Council the week of September 9-13.  They suggested we 
provide an alternative date after September 17. Mr.Fisher was 
notified and requested to provide alternative dates. It is clear 
that the maritime training presently scheduled for October will be 
moved back. 
 
     4. The decision as the distribution plan for the five CT30 KITS 
that are in the EXBS office has been agreed upon. The decision is to 
donate one to the Customs Academy and one to the Border Guard 
Academy for training of officers. The remaining three will be 
donated to the border posts: Dostyk (BG), Jibek Joli 
(Customs),Zhana-Zhol (Customs). This distribution plan is based upon 
information contained in port assessments made by EXBS Advisors. 
 
 
      5. There are two Ludlum Survey Meters in the EXBS office that 
were shipped from DOE. These should be donated to the Customs. The 
new EXBS Advisor will discuss this with Customs Headquarters staff 
to determine the most appropriate locations. Note that we were able 
to acquire the Russian translation of the manual which is quite 
technical. This was forwarded from another EXBS office. 
 
 
 
E. SIGNIFICANT DEVELOPMENTS IN EXPORT CONTROLS, NONPROLIFERATION, OR 
RELATED BORDER SECURITY 
 
1. None. 
 
ASTANA 00002414  003 OF 003 
 
 
 
F. CASPIAN SECURITY INFORMATION 
 
     1. None 
 
III. RED FLAG ISSUES. 
 
1. None. 
 
POC for this report is EXBS Program Manager Gulnara Abildaeva, 
Email: AbildaevaG@state.gov, Phone +7 (3172) 70 2320; EXBS Program 
Assistant Oxana Limareva, Email: LimarevaO@state.gov, Phone +7 
(3172) 70 2237. 
 
  Ordway

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