Monthly Archives: July 2008

08ASTANA1375, KAZAKHSTAN – GOVERNMENT TAKING FURTHER MEASURES

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1375.
Reference ID Created Released Classification Origin
08ASTANA1375 2008-07-31 12:20 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0001
PP RUEHWEB

DE RUEHTA #1375/01 2131220
ZNY CCCCC ZZH
P 311220Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2876
INFO RUCNCIS/CIS COLLECTIVE 0589
RUEHVI/AMEMBASSY VIENNA 0653
RUEHVEN/USMISSION USOSCE 1932

C O N F I D E N T I A L ASTANA 001375 
 
SIPDIS 
 
E.O. 12958: DECL: 07/31/2018 
TAGS: PGOV PREL KCRM ECON KZ
SUBJECT: KAZAKHSTAN - GOVERNMENT TAKING FURTHER MEASURES 
AGAINST RAKHAT ALIYEV IN WAKE OF WSJ ARTICLE 
 
Classified By: Pol/Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
------- 
SUMMARY 
------- 
 
1. (C) A Wall Street Journal article in which Rakhat Aliyev 
made new charges of corruption against President Nazarbayev 
and his family appears to have provoked the government to 
strike back with an anti-Aliyev media campaign and a threat 
of new charges against him.  Some of Aliyev's allegations to 
the Journal appear to be unsubstantiated.  Prime Minister 
Masimov called in the Ambassador to explain that one claim in 
the article about his own business interests was true, but 
had been listed on his public disclosure forms.   End 
Summary. 
 
------------------------------------------- 
ALIYEV PROVIDES "NEW DETAILS" ON CORRUPTION 
------------------------------------------- 
 
2. (C) A July 22 Wall Street Journal (WSJ) article bills 
itself as providing "new details" on the corruption of 
President Nazarbayev and his family.  The article, which is 
entitled "Kazakhstan Corruption: Exile Alleges New Details," 
relies heavily on an interview with and documents provided by 
ex-Nazarbayev son-in-law Rakhat Aliyev, the sole named 
source.  Aliyev claimed to the Journal that Nazarbayev holds 
vast hidden ownership stakes in various Kazakhstani 
industries, takes illicit commissions from firms doing 
large-scale business in Kazakhstan, controls a large network 
of off-shore bank accounts, and hired a consulting firm to 
burnish his image in the West and "spy" on his political 
rivals and enemies abroad.  In reality, Aliyev did not 
substantiate with documentary evidence some of his most 
significant "revelations" -- e.g., that Nazarbayev secretly 
owns nuclear company Kazatomprom through offshore entities. 
(Comment: We do not see how Nazarbayev could own a state 
enterprise in which the government is the 100 percent 
shareholder.  End Comment.)  It is also unclear whether the 
activities of the consulting firm -- a main focus of the 
article -- were in any way illegal. 
 
--------------------------------------------- - 
MASIMOV: BUSINESS INTEREST WAS FULLY DISCLOSED 
--------------------------------------------- - 
 
3. (C) Immediately after the article was published on July 
22, Prime Minister Masimov called in the Ambassador for a 
tete-a-tete to discuss it just prior to Masimov's scheduled 
meeting with visiting Special Envoy for Eurasian Energy 
Issues Boyden Gray.  Masimov noted that the article claims 
that he is a co-owner of a Singapore-based company together 
with a Kazakhstani banker named Aigul Nuriyeva who, according 
to the article, helps manage the Nazarbayev family finances. 
Masimov explained to the Ambassador that his share in this 
company is not a secret, as the asset is listed on his 
financial disclosure forms. 
 
--------------------------------------------- 
MEDIA CAMPAIGN AND NEW CHARGES AGAINST ALIYEV 
--------------------------------------------- 
 
4. (C) The Journal article appears to have provoked a new 
Kazakhstani government move against Aliyev.  On July 29, 
anti-Aliyev articles appeared simultaneously in three 
Kazakhstani newspapers:  government-owned Kazakhstanskaya 
Pravda; privately-owned, centrist, populist Vremya; and 
privately-owned, largely pro-government Litr.   The 
Kazakhstanskaya Pravda opinion piece explained that articles 
sometimes appear in the foreign press based on "cock and bull 
stories" from the "turncoat" Aliyev, who wraps himself in 
democratic clothing, trying to use it to cover up his 
unprecedented crimes.  Quite unusual for Kazakhstanskaya 
Pravda, the piece cited opposition leader Zharmakhan 
Tuyakbay, who remarked that today one could easily form a 
whole club of those aggrieved by Aliyev.  The Vremya article 
noted that the "Vienna recluse" continues to carry out his 
war of kompromat, bombarding the Kazakhstani and 
international media with his newest "revelations." It 
contended that there is a danger that Aliyev will be turned 
into some kind of Boris Berezovskiy, becoming the principal 
Kazakhstani "democrat" in the eyes of western society.  Most 
significantly, the Litr article detailed the history of 
Aliyev's "corporate raiding" -- i.e., his obtaining control 
of businesses for free or at below market prices by 
threatening and blackmailing the businesses' owners. 
 
5. (U) The following day, July 30, the Interfax newswire 
reported that according to a reliable source, the National 
 
Security Committee (KNB) was investigating a new case against 
Aliyev and his associates -- this time, on charges of 
"corporate raiding."  The source claimed that the money 
generated from the "raiding" was used by Aliyev for his 
preparations to overthrow the government -- a crime he was 
convicted of in March. 
 
------- 
COMMENT 
------- 
 
6. (C) The Wall Street Journal piece raises a broader policy 
question:  what impact do such allegations of corruption 
about Nazarbayev and his family (and the reali
ty that may 
stand behind them) have on Kazakhstan's political stability? 
 The fact of the matter is that in the wake of Aliyev's 
demise, Nazarbayev took relatively quick action to ensure 
that his family would be less of a source of political 
friction.  Daughter Dariga Nazabayeva essentially disappeared 
from the political scene.  (Note: She had been a member of 
parliament and head of a separate political party, Asar. 
After the forced merger of Asar with Nur Otan, she was a 
deputy chair of the combined party.  She was not elected to 
the new parliament in August 2007 and is no longer in the Nur 
Otan leadership.  End Note.)  Remaining son-in-law Timur 
Kulibayev was removed from his position as deputy head of the 
Samruk state holding company (which owns state oil and gas 
company KazMunaiGas).  At present, Kulibayev's only position 
is as head of KazEnergy -- an industry association of oil and 
gas companies -- though admittedly, he has been raising his 
profile in recent months.  At this juncture, no Nazarbayev 
relative would appear to have an inside track, or even much 
of a chance, to succeed him as president. 
 
7. (C) Comment continued:  Of additional note, despite the 
first family's accumulation of assets, Nazarbayev has done 
quite a good job ensuring that the country's burgeoning 
wealth is shared with other elite clans and factions -- not 
to mention the fact that there has been a very significant 
reduction in the country's poverty rate over the past ten 
years, from roughly 50 percent of the population to the 
current level of 9 percent.  It is even still possible -- 
though rare -- for the super rich to flirt with the 
opposition camp, as in the case of Bank TuranAlem head 
Mukhtar Ablyazov and Kazkommertsbank owner Nurzhan 
Subkhanberdin.  Finally, to nip public discontent in the bud, 
the government has been more aggressively addressing the 
issue of official corruption.  Cynics, of course, might say 
that recent anti-corruption campaigns have less been a move 
forward toward the rule of law, and more a tool deployed to 
promote specific political or economic interests.  However, 
the Presidential Administration's polling, like ours, 
undoubtedly shows that corruption has emerged over the past 
few years as a major public concern.  End Comment. 
ORDWAY

Wikileaks

08ASTANA1374, KAZAKHSTAN – PRESIDENTIAL ADVISOR YERTYSBAYEV

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1374.
Reference ID Created Released Classification Origin
08ASTANA1374 2008-07-31 11:55 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0000
PP RUEHWEB

DE RUEHTA #1374 2131155
ZNY CCCCC ZZH
P 311155Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2875
INFO RUCNCIS/CIS COLLECTIVE 0588
RUEHVEN/USMISSION USOSCE 1931

C O N F I D E N T I A L ASTANA 001374 
 
SIPDIS 
 
E.O. 12958: DECL: 07/31/2018 
TAGS: PGOV KDEM PHUM KZ
SUBJECT: KAZAKHSTAN - PRESIDENTIAL ADVISOR YERTYSBAYEV 
SUGGESTS THE POSSIBILITY OF EARLY ELECTIONS 
 
Classified By: Pol/Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
1. (C) Nazarbayev advisor (and former Culture and Information 
Minister) Yermukhamet Yertysbayev told the Ambassador on July 
21 that the government is looking for a way to bring in a 
multi-party parliament before taking over the OSCE 
chairmanship in 2010.  Early elections, he explained, are not 
likely in 2008, given the domestic economic situation, but 
are a possibility for 2009. Yertysbayev maintained that 
Nazarbayev was inclined to hold early elections, a position 
that Yertysbayev was strongly pushing.  He admitted that the 
final decision would be Nazarbayev's and had not yet been 
taken. 
 
2. (C) The Ambassador suggested that it might be difficult 
for the government to conduct free and fair elections given 
that oblast akims (governors) believe they have to outdo 
themselves in "delivering" votes for Nazarbayev's Nur Otan 
party.  Yertysbayev admitted that this is a danger, and that 
new elections could thus yield a "multi-party parliament" 
consisting of Nur Otan plus a Nur Otan surrogate party such 
as Adilet, rather than a genuine opposition party. 
 
3. (C) Yertysbayev explained to the Ambassador that in his 
view, Kazakhstan currently has only three viable political 
parties:  Nur Otan, Azat, and the unregistered Alga. 
(Comment:  Yertysbayev was thus discounting the relevance of 
Zharmakhan Tuyakbay's OSDP and Serikbolsyn Abdildin's 
Communists.  Based on our own observations, OSDP and the 
Communist Party are, in fact, less organized and less active 
than Azat and Alga.  End Comment.)  Both Azat and Alga have 
good financing, Yertysbayev maintained, with Kazkommertsbank 
owner Nurzhan Subkhanberdin providing funds to Azat, and Bank 
TuranAlem Chairman Mukhtar Ablyazov bankrolling Alga from the 
shadows.  Yertysbayev contended that Alga's registration has 
been held up specifically because Ablyazov has not been 
transparent in his support for Alga. 
 
4. (C) The Ambassador stressed to Yertysbayev the importance 
of moving forward on democratic reforms, expressing specific 
concerns about the government's domination of the broadcast 
media and restrictions on rallies and protests.  In response, 
Yertysbayev said he was optimistic that the government would 
follow through on its Madrid commitments. 
5. (C) Comment:  There are several arguments against 
Nazarbayev deciding to hold early parliamentary elections -- 
most important, that another round of bad elections would be 
worse for Kazakhstan's image than maintaining the one-party 
parliament.  On the other hand, no parliament since the 
country's independence has sat through its full term.   The 
fact that Nazarbayev recently met separately with opposition 
leaders Abilov and Tuyakbay could indicate that a deal is the 
horizon about bringing the opposition into parliament. 
Yertysbayev gave an interview for the July 24 edition of the 
opposition newspaper Svoboda Slova (his second Svoboda Slova 
interview in the months since he was named a Nazarbayev 
advisor) in which he publicly implied his personal support 
for early elections.  As Yertysbayev put it to Svoboda Slova, 
when Kazakhstan becomes the first Asian country to chair the 
OSCE, "we want Kazakhstan to look respectable, (we want) the 
Europeans to see that the full spectrum of basic political 
forces is represented in the Kazakhstani parliament."  The 
timing of elections, he stressed, is an issue for Nur Otan to 
decide, just like in Britain, where the ruling party names 
the date of early elections -- a date when political and 
economic conditions are most favorable for that party.  End 
Comment. 
ORDWAY

Wikileaks

08ASTANA1368, KAZAKHSTAN – ASTANA CONFERENCE DISCUSSES SULFUR STORAGE,

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1368.
Reference ID Created Released Classification Origin
08ASTANA1368 2008-07-30 10:31 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9283
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1368/01 2121031
ZNR UUUUU ZZH
O 301031Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2865
INFO RUCNCIS/CIS COLLECTIVE 0586
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 001368 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EPET SENV PGOV PREL KZ
SUBJECT:  KAZAKHSTAN - ASTANA CONFERENCE DISCUSSES SULFUR STORAGE, 
TRANSPORTATION, AND SALE 
 
SUMMARY 
------- 
 
1. (U) The Kazakhstan-Canada Business Association (KCBA), in 
partnership with Canada's Alberta Sulfur Research Ltd. organized the 
First International Conference on Sulfur Reutilization and 
Sustainable Development in Astana on July 9.  Representatives of the 
Ministry of Energy and Mineral Resources, Ministry of Industry and 
Trade, Shell, Chevron, TengizChevrOil, Agip KCO, the Kazakhstan Oil 
and Gas Institute, the nuclear joint venture Inkai (owned by 
Kazakhstan's national nuclear holding company Kazatomprom and 
Canada's Cameco Corporation), the nuclear joint venture Catco (owned 
by Kazatomprom and France's Areva), and others discussed the 
environmental impact of sulfur, its storage, transportation, and 
utilization, and other regulatory and business issues relevant to 
sulfur.  End Summary. 
 
SULPHUR SOLD TO 24 COUNTRIES 
---------------------------- 
 
2. (U) As of January 1, 2008, Tengizchevroil (TCO) was storing 8.4 
million tons of sulfur in open-air storage at the Tengiz oil field. 
In 2007, TCO produced 1.6 million tons of sulfur.  TCO's second 
generation expansion will result in significantly increased sulfur 
production, up to 2.4 million tons per year.  According to TCO Rail 
Transportation Manager Ruslan Davletukayev, of the 2 million tons of 
sulfur sold by TCO in 2007, 40% (approximately 800 thousand tons) 
were sold to Mediterranean countries (Morocco, Israel, Egypt, etc.); 
32% to Russia and other CIS countries; 24% to China; and 4% to 
Kazakhstan.  Sulfur is supplied to 24 countries in one of four forms 
-- granulated, liquid, flake, or lump form.  During the second half 
of 2008, TCO plans to introduce additional granulating equipment, 
thereby increasing the production of granulated sulfur, which is the 
standard form for shipping and the one preferred by customers.  TCO 
also ships liquid sulfur in 300 special heated tank-cars to the CIS 
(mostly to Russia's Balakov Plant).  Flake sulfur is shipped to 
China and the CIS in 700 covered rail wagons.  According to Chinese 
regulations, flake sulfur must be shipped in 50-kilogram 
polypropylene bags, and be granted special shipment permission from 
a lab at the Urumchi railway station.  Sulfur in lumps is shipped in 
standard gondolas (semi-wagons), covered with a special fabric, to 
the CIS, Morocco, Egypt, and other countries. 
 
OFFICIAL CLAIMS OPEN SULFUR STORAGE IS A HAZARD 
----------------------------- ----------------- 
 
3. (U) Raushan Sarmurzina, Director of the Petrochemical Department 
at the Ministry of Energy and Mineral Resources, claimed that 
although sulfur is not classified as a toxic element, long-term open 
storage may have adverse environmental effects, including the 
formation of sulfuric acid, sulfur oxidation (decay), and discharge 
of toxic hydrogen sulfide.  (Note: TCO's position is that it takes 
appropriate measures to minimize the risks associated with open 
storage of block sulfur.  End Note.) 
 
4. (U) Rita Sagyndykova, Senior Manager of the Kazakhstan Oil and 
Gas Institute (KOGI); Almagul Kushugulova, Director of Genetics and 
Biochemistry Lab at the National Center for Biotechnology; and Paul 
Davis, General Manager of Alberta Sulphur Research Ltd. enumerated 
the advantages of underground sulfur storage over above-ground 
sulfur storage.  Sulfur oxidation is reduced through underground 
sulfur storage.  Moreover, with above-groud storage, controlling 
acid run-off is costly, and to neutralize the effects of exposure, 
sulfur blocks must be coated with some form of coating (including 
acrylics, limestone, breathable membranes capped in soil, or 
spray-on layers).  Similarly, with above-ground storage, sulfur 
block temperatures must be controlled to prevent decay. 
 
5. (U) In March 2007, President Nazarbayev called for the creation 
of a National Sulfur Storage Center (NSSC).  According to 
Sagyndykova, the legal aspects of the NSSC must be carefully 
considered because there is no precedent for the establishment and 
operation of such a center either in Kazakhstan or abroad.  The 
Ministries of Energy and Environmental Protection are expected to 
monitor and control NSCC compliance with legislation and 
environmental regulations. The project will be designed by KOGI and 
the tender process for construction and operation administrated by 
the Caspi social-entrepreneurial corporation. 
 
SULFUR UTILIZATION 
------------------ 
 
6. (U) Campbell Keir, Managing Director of Shell Kazakhstan 
Development; Aibat Sherikbayev, Acting Chairman of KCBA; Pascal 
Bernasconi, Director of Catco; Serghey Breus, General Director of 
Inkai; and Almagul Kushugulova proposed alternative uses of sulfur 
such as making asphalt, concrete, and micro-fertilizers.  Shell 
specifically has an extensive history of sulfur utilization, working 
for more than 60 years with regional authorities in Canada. 
 
 
ASTANA 00001368  002 OF 002 
 
 
7.
 (U) Sulfur is used to produce sulfuric acid, which is a vital 
component in the processing of uranium.  One processed kilogram of 
uranium requires as much as 50-150 kilograms of sulfuric acid for 
production, and the demand for sulfuric acid is expected to increase 
as Kazakhstan boosts its uranium output from 9,000 tons in 2008 to 
an expected 12,000 in 2009.  During her press interview at the 
forum, Sarmurzina mentioned that Kazatomprom plans to build two 
sulfuric acid plants, one in Kyzylorda Oblast and the second in the 
city of Stepnogorsk in North Kazakhstan Oblast, which are expected 
to respectively process 250,000 and 300,000 tons of sulfur 
respectively annually. 
 
TRANSPORTATION PROBLEMS HINDER SALES 
------------------------------------ 
 
8. (U) Most of the speakers acknowledged the challenges TCO 
continues to face regarding sulfur transportation. For example, of 
the 22,500 rail cars TCO owns, 4,300 are used to ship sulfur. 
Sulfur is shipped via one of two hubs -- Alashankou (on the border 
with China), and the Ilyichevsk seaport in the Ukraine.  TCO also 
faces complications with additional shipment requirements posed by 
Kazakhstan's Temir Zholy national railway company.  According to 
Sarmurzina, as much as 3 million tons of sulfur a year could be sold 
if transportation capacity was expanded. 
 
COMMENT 
------- 
 
9. (SBU) With sulfur prices at record levels, TCO is effectively 
sitting on $4-6 billion worth of sulfur, and the consortium's sulfur 
sales are becoming an important profit stream, yielding $120 million 
during the first quarter of 2008.  A June meeting between Chevron 
CEO Dave O'Reilly and President Nazarbayev has reportedly produced 
an acceptable compromise on the $300 million environmental fine 
levied against TCO for sulfur storage.  TCO, of course, has 
maintained all along that it received all the necessary permits for 
sulfur production and that no permits are necessary -- or available 
-- for continued sulfur storage.  End Comment. 
 
ORDWAY 
 
 
 
3

Wikileaks

08ASTANA1361, KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, JULY 6 – JULY 19,

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1361.
Reference ID Created Released Classification Origin
08ASTANA1361 2008-07-28 09:58 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO7531
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1361/01 2100958
ZNR UUUUU ZZH
R 280958Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2852
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0584
RUEHAK/AMEMBASSY ANKARA 2173
RUEHBUL/AMEMBASSY KABUL 0406
RUEHNE/AMEMBASSY NEW DELHI 0509
RUEHAST/USOFFICE ALMATY 0617

UNCLAS SECTION 01 OF 02 ASTANA 001361 
 
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 KTDB KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, JULY 6 - JULY 19, 
2008 
 
ASTANA 00001361  001.2 OF 002 
 
 
1.  Summary:  This information is drawn primarily from the 
Kazakhstani local press, and has not been verified for accuracy. 
 
- New Transfer Pricing Law Signed 
- Kazakhstan-Russia Cooperation on Financial Supervision 
- Kyrgyzstan to Receive Kazakhstani Wheat 
- New Head of ABN AMRO Bank Kazakhstan 
- Economic Statistics 
- KazMunayGas Buys 51% of MangistauMunayGas 
- KMG to Explore Myortviy Kultuk 
- Karachaganak Consortium Paying Crude Export Duty 
- Kazakhmys in Merger Talks with Metalloinvest 
- New President of British Gas Kazakhstan 
- Energy Statistics for January-June 2008 
 
New Transfer Pricing Law Signed 
------------------------------- 
 
2.  President Nazarbaev signed a new transfer pricing law on July 5, 
which, in the words of Finance Minister Zhamishev, is not designed 
to collect as much tax as possible, but rather to ensure that taxes 
are paid in the country where income is generated.  The new law 
specifies an "arm's length principle" and provides for preliminary 
approval of transaction prices.  Zhamishev believes the law will 
allow fiscal authorities to more easily identify companies that 
avoid paying taxes via offshore transactions. 
 
Kazakhstan-Russia Cooperation on Financial Supervision 
--------------------------------------------- --------- 
 
3.  Kazakhstan's Financial Supervision Agency (FSA) and the Central 
Bank of Russia signed a memorandum on matters of bank supervision 
which promises an increased exchange of information between monetary 
officials regarding banks and their subsidiaries operating in the 
two countries.  Specifically, details of banks' shareholders, 
management structure, affiliates, activities, and financial status 
are to be shared in an effort to assist monetary officials in taking 
decisions on bank permits and licenses.  The memorandum also 
specifies cooperation on bank inspections and outlines plans to set 
conditions for data protection in Kazakhstan and Russia. 
 
Kyrgyzstan to Receive Kazakhstani Wheat 
--------------------------------------- 
 
4.  Despite a standing ban on wheat exports, Kazakhstan will fulfill 
its pledged shipments of wheat to Kyrgyzstan.  According to the 
Kazakhstan Embassy in Bishkek, immediately following Kyrgyz 
President Kurmanbek Bakiyev's recent visit to Kazakhstan, the two 
countries reached an agreement on Kazakhstan's supplying 50,000 tons 
of grain to Kyrgyzstan.  Kyrgyzstan has already received 10,000 tons 
of grain, and the remaining 40,000 tons will be shipped in the near 
future. 
 
New Head of ABN AMRO Bank Kazakhstan 
------------------------------------ 
 
5.  Rudi Geerdink will replace Jurgen Rigterink as Chairman of the 
Managing Board and Country Head of ABN AMRO Bank Kazakhstan, 
according to a bank press release from July 16.  Geerdink joined ABN 
AMRO in 2000 after working on risk management at PriceWaterhouse. 
 
Economic Statistics 
------------------- 
 
6.  According to the Ministry of Economy and Budget Planning, GDP 
growth for the first six months of 2008 was 5.1% on an annualized 
basis.  Inflation for the month of June was 1.2%.  On an annualized 
basis, prices for food products grew by 29.3%, for paid services by 
15%, and for non-food products by 11.6%.  June-on-June inflation was 
20%. 
 
7.  For the first five months of 2008, Kazakhstan's external trade 
was $41.596 billion, an increase of 41.8% over the same period the 
previous year.  Exports grew by 60% to $28.012 billion and imports 
increased 14.8% to $13.584 billion.  The main destination countries 
 
ASTANA 00001361  002.2 OF 002 
 
 
for Kazakhstani exports were Italy (17.4% of total exports), 
Switzerland (15.2%), China (9.2%), Russia (8.6%), France (8.2%), the 
Netherlands (5.3%), Iran (3.4%), Israel (3.3%), Ukraine (3.3%) and 
Turkey (2.6%).  The list of the largest exporters to Kazakhstan 
included Russia (39.1% of total imports), China (9.9%), Germany 
(7%), the U.S. (5.3%), Ukraine (5.2%), Japan (3.2%), Italy (2.8%), 
Turkey (2.6%), France (2.3%), and the UK (1.7%). 
 
KazMunayGas Buys 51% of MangistauMunayGas 
----------------------------------------- 
 
8.  Kazakhstan's national oil and gas company, KazMunayGas (KMG), 
signed an agreement to purchase a 51% stake in MangistauMunayGas 
company (MMG), which had been majority owned by Indonesia
's Central 
Asia Petroleum Corp.  Former KMG president Uzakbay Karabalin has 
been appointed MMG director general.  MMG owns 36 oil and gas fields 
and a 58% stake in the Pavlodar Petrochemical Plant. 
 
KMG to Explore Mertviy Kultuk 
------------------------------ 
 
9.  Kazakhstan's Ministry of Energy and Mineral Resources and KMG 
signed a contract for the exploration and production of hydrocarbons 
in the Mertviy Kultuk offshore section of the Caspian Sea.  The 
recoverable oil resources are estimated at 164 million tons.  A 50% 
stake in this project will be given to a legal entity which will be 
established by a group of Kazakhstani investors. 
 
Karachaganak Consortium Paying Crude Export Duty 
--------------------------------------------- --- 
 
10.  Karachaganak Petroleum Operating B.V. (KPO) paid $82.5 million 
in crude export duties in June.  On July 17, the Finance Ministry 
published on its website an updated list of companies subject to 
Kazakhstan's new crude export duty, with KPO the sole addition to 
this latest version of the list. 
 
Kazakhmys in Merger Talks with Metalloinvest 
-------------------------------------------- 
 
11.  The largest copper producing company in Kazakhstan, Kazakhmys, 
is holding preliminary negotiations with Russia's Metalloinvest 
holding company regarding a potential merger.  Metallinvest annually 
produces 6 million tons of steel and 40 million tons of ore. 
 
New President of British Gas Kazakhstan 
--------------------------------------- 
 
12. Peter Dranfield replaced Lewis Affleck as president of British 
Gas Kazakhstan.  Dranfield has been in charge of BG operations in 
Egypt, Trinidad and Tobago, and most recently Oman.  He previously 
worked in Kazakhstan during the 1990s. 
 
Energy Statistics for January-June 2008 
--------------------------------------- 
 
13.  According to the National Statistics Agency, Kazakhstan's crude 
production was 29.19 million tons during January-June 2008, a 7.8% 
increase over the same period in 2007.  Gas condensate production 
rose 4% to 6.44 million tons.  Kazakhstan extracted 53.95 million 
tons of coal during January-June, a 19.8% increase. 
 
ORDWAY 
1 
 
 
4

Wikileaks

08ASTANA1360, KAZAKHSTAN – EURASIAN ENERGY COORDINATOR MANN

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1360.
Reference ID Created Released Classification Origin
08ASTANA1360 2008-07-28 08:51 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO7470
PP RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHPW RUEHROV RUEHSR
DE RUEHTA #1360/01 2100851
ZNY CCCCC ZZH
P 280851Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2850
INFO RUCNCIS/CIS COLLECTIVE 0582
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SCA COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001360 
 
SIPDIS 
 
E.O. 12958: DECL: 07/28/2018 
TAGS: EPET PREL PGOV EINV KZ AJ TX GG
SUBJECT: KAZAKHSTAN - EURASIAN ENERGY COORDINATOR MANN 
DISCUSSES ENERGY TRANSPORT WITH SAMRUK DEPUTY HEAD KABYLDIN 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
------- 
SUMMARY 
------- 
 
1. (C) Samruk Deputy Chairman Kairgeldy Kabyldin told 
visiting Eurasian Energy Diplomacy Coordinator Steven Mann on 
July 24 that the international oil and gas companies have 
insisted on ownership stakes in the pipeline portion of the 
Kazakhstan-Caspian Transportation System (KCTS) -- i.e., the 
pipeline which will bring crude from the oil fields to 
Kazakhstan's Caspian coast.  President Nazarbayev offered 
Chevron a lead role in the pipeline, but no final agreement 
has yet been reached.  Kabyldin indicated he believed that 
the Azeris were slow-rolling bringing the Baku-Supsa pipeline 
back on line.  They have been pressing Kazakhstan to use more 
expensive transport options, including rail, he claimed.  End 
Summary. 
 
------------------------ 
FORWARD MOVEMENT ON KCTS 
------------------------ 
 
2. (C) Eurasian Energy Diplomacy Coordinator Ambassador 
Steven Mann met on July 24 in Astana with Kairgeldy Kabyldin, 
Deputy Chairman of Kazakhstan's Samruk state holding company 
and former Managing Director of the transport division of 
Kazakhstan's state oil and gas company, KazMunaiGas (KMG). 
(Note:  Samruk is the 100 percent owner of KMG.  End Note.) 
Kabyldin was accompanied by KMG Vice President Daniyar 
Berlibayev. 
 
3. (C) Kabyldin explained to Mann that Samruk and KMG's 
priorities in energy transport include expansion of the 
Caspian Pipeline Consortium (CPC) pipeline, implementation of 
the Kazakhstan-Caspian Transportation System (KCTS), and the 
construction of oil and gas pipelines to China -- for which, 
he noted, the Chinese have provided financial guarantees to 
the Kazakhstanis.   He reminded Mann that Kazakhstan and 
Azerbaijan had signed an Inter-Governmental Agreement (IGA) 
on KCTS in August 2007.  Negotiations between the two sides 
on the details of the trans-Caspian segment -- the terminals 
and the tankers -- are on-going.  Kabyldin met in June with 
SOCAR president Rovnag Abdullayev, with SOCAR and KMG 
agreeing to set up a joint venture company, each owning 50 
percent, to develop the trans-Caspian segment.  The Azeris, 
he said, do not want to give any ownership stakes to the 
international oil and gas companies. 
 
4. (C) The Kazakhstanis, Kabyldin continued, are in 
discussions with the international companies regarding the 
pipeline portion of KCTS, which would bring crude from the 
Tengiz field and later from Kashagan to the Caspian.  The 
Kazakhstanis are ready to guarantee access and specific 
tariffs to the companies with an agreement that would spell 
out all of the necessary details, but the companies have 
insisted on their own ownership shares in the pipeline, 
explaining that ownership best ensures their rights over the 
long-run.  Kabyldin admitted that if the companies hold 
ownership stakes, the funding for the pipeline should come 
more quickly and easily.  Mann said that as far as he knew, 
the Kazakhstanis had offered Chevron a lead role on the 
project.  Kabyldin responded that President Nazarbayev did, 
in fact, offer this option to Chevron CEO David O'Reilly in 
June, at the ceremony for the second generation expansion of 
TengizChevrOil (TCO), but that no final agreement has yet 
been reached.  He stressed that Kazakhstan and Chevron's 
interests are largely aligned -- with both wanting to move 
forward quickly in implementing KCTS and in securing transit 
access from Baku onward. 
 
---------------------------------- 
AZERIS SLOW-ROLLING ON BAKU-SUPSA? 
---------------------------------- 
 
5. (C) Kabyldin explained that Azerbaijan's priority for 
transport from Baku onward is BTC first and foremost, 
followed by railway to the Black Sea and the Baku-Novorossisk 
and Baku-Black Sea pipelines, including Baku-Supsa. 
Kazakhstan, however, is particularly interested in the 
Baku-Supsa pipeline, which remains out of utilization.  In 
fact, Kazakhstan would in the future like to get an ownership 
share in Baku-Supsa -- a move the Georgians are ready to 
support.  Kabyldin indicated he believed the Azeris are 
slow-rolling bringing Baku-Supsa back on line, arguing that 
in the two years it has supposedly been under repair, a whole 
new pipeline could have been built.  "One person whose name 
you know," he contended, is behind the delays, and that 
person's interests are so strong that Kazakhstan has been 
 
ASTANA 00001360  002 OF 002 
 
 
pressed to ship 25 million tons of crude by rail rather than 
using a pipeline.  In fact, it costs $30 per ton to ship 
crude from Baku to Batumi by rail, in comparison with just 
$0.40 per barrel to use the Baku-Supsa pipeline, Kabyldin 
noted.  (Comment: Mann believes that Kabyldin was referring &#x000A
;to Baku insider Abdulbari Gozel.  End Comment.) 
 
6. (C) Kabyldin explained that the Kazakhstanis are ready to 
pay a higher price to use Baku-Supsa, though the issue of 
whether the additional money would be paid to the Azerbaijani 
government or Baku-Supsa operator AIOC is a sensitive one. 
The Azeris, he stressed, can not themselves fill both BTC and 
Baku-Supsa.  If they fill BTC, Baku-Supsa will largely be 
empty.  A number of companies operating in Kazakhstan -- 
including Chevron and ConocoPhillips -- will have extra 
volumes of Kazakhstani crude that could be shipped through 
Baku-Supsa. 
 
7. (C) Mann asked Kabyldin which figures below President 
Aliyev are currently most influential in Azerbaijan's energy 
sector.  Kabyldin responded that in his view, this group 
would include SOCAR President Abdullayev, Deputy Mezhlis 
Speaker (and former head of SOCAR's foreign investment 
division) Valekh Aleskerov, and Energy Minister Natik Aliyev. 
 
------------------------------------ 
KAZAKHSTAN INTERESTED IN TURKMEN GAS 
------------------------------------ 
 
8. (C) KMG Vice President Berlibayev told Mann that 
Kazakhstan and Turkmenistan have always had good cooperation 
on gas.  Kazakhstan is interested in an off-shore Turkmen gas 
block that is adjacent to the area in the Caspian where 
Kazakhstan's "N Block" is located.  Mann expressed surprise 
that Uzbekistan had agreed to a pipeline transiting its 
territory to send Turkmen gas to China.  Berlibayev responded 
that the Uzbeks had told him they agreed to the pipeline 
because they never believed it would be built.  He added that 
Turkmengas head Tachberdy Tagiyev had told the Kazakhstanis 
that the gas Turkmenistan promised to China is 
newly-discovered gas, from the right bank of the Amu-Darya 
river.  Kabyldin told Mann that Kazakhstan has an interest in 
trans-Caspian gas pipelines as alternative gas routes, but 
this is a very sensitive issue, as it is important not to 
irritate Russia or China.  (Comment:  Kabyldin was apparently 
stressing Kazakhstan's support for alternative routes as a 
matter of policy.  For the foreseeable future, Kazakhstan 
will not have meaningful volumes of gas available to supply 
to a trans-Caspian gas pipeline.  End Comment.) 
ORDWAY

Wikileaks

08ASTANA1355, SCENESETTER FOR CODEL REID’S AUGUST 7-8 VISIT TO

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1355.
Reference ID Created Released Classification Origin
08ASTANA1355 2008-07-28 04:49 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7329
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1355/01 2100449
ZNR UUUUU ZZH
O 280449Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2841
INFO RUCNCIS/CIS COLLECTIVE 0578
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 04 ASTANA 001355 
 
SENSITIVE 
SIPDIS 
 
H PLEASE PASS TO CODEL REID 
 
E.O. 12958: N/A 
TAGS: PREL OREP PGOV ECON OVIP OTRA KZ
 
SUBJECT: SCENESETTER FOR CODEL REID'S AUGUST 7-8 VISIT TO 
KAZAKHSTAN 
 
------- 
Summary 
------- 
 
1. (SBU) Your visit to Kazakhstan comes at a particularly opportune 
time.  With its recent selection as 2010 OSCE chairman and thriving 
energy sector, Kazakhstan is showing increasing confidence on the 
international stage.  The country is rightly proud of its 
achievements:  a booming economy, largely harmonious multi-ethnic 
society, and rapidly expanding national capital.  The country 
celebrated Astana's 10th anniversary as Kazakhstan's capital on July 
6 (which was also President Nazarbayev's 68th birthday) with gala 
festivities that were attended by Russian President Medvedev, 
Turkish President Gul, Jordan's King Abdullah and six other foreign 
heads of state. 
 
2. (SBU) Kazakhstan has proven to be a reliable security partner and 
a steady influence in a turbulent region.  The pace of democratic 
reform, however, has been slow, with political institutions, civil 
society, and the independent media still underdeveloped.  Our 
fundamental strategic objective is a secure, democratic, and 
prosperous Kazakhstan that embraces market competition and the rule 
of law; continues partnering with us on the global threats of 
terrorism, WMD proliferation, and narco-trafficking; and develops 
its energy resources in a manner that bolsters global energy 
security.  We would welcome your assistance in underlining to the 
Kazakhstani government the importance of: 
 
-- continuing Kazakhstan's strong support for Coalition efforts in 
Afghanistan 
 
-- following through on the democratic reform commitments Kazakhstan 
made when selected to be 2010 OSCE chairman 
 
--------------------------------------------- ----- 
Strong Growth, But Short- and Long-Term Challenges 
--------------------------------------------- ----- 
 
3. (SBU) Kazakhstan is the region's economic powerhouse, with an 
economy larger than that of all the other Central Asian states 
combined.  Economic growth averaged 9.2% a year during 2005-07, and 
the percentage of the population living below the subsistence level 
dropped from 28% in 2001 to under 10% at present.  The energy sector 
is the dominant earner, with oil exports accounting for roughly a 
third of GDP.  In the long term, Kazakhstan must focus on 
diversifying its economy, building up non-extractive industries, 
agriculture, and the service sector.  In the short term, Kazakhstan 
is facing duel challenges of rising inflation, propelled by soaring 
international prices on food and agricultural commodities, and 
reduced economic growth, a reflection of the domestic impact of the 
global financial crisis.  The government imposed a temporary ban on 
wheat exports in April to ensure adequate domestic supply and to 
keep prices down on bread.  As Kazakhstan produces much more wheat 
than it consumes, we anticipate the ban will be lifted by September, 
once the government has confirmed that the annual wheat harvest was 
successful. 
 
------------------------ 
An Emerging Energy Power 
------------------------ 
 
4. (SBU) Kazakhstan exported just over 60 million tons of crude oil 
in 2007 and is expected to be one of the world's top ten oil 
producers soon after 2015.  The country also has significant natural 
gas reserves, but for now gas exports are relatively limited, in 
part because gas is being reinjected to maximize crude output.  U.S. 
companies have significant ownership shares in each of Kazakhstan's 
three major oil and gas projects:  Tengiz, Kashagan, and 
Karachaganak.  Tengiz (with 50% Chevron and 25% ExxonMobil stakes) 
recently inaugurated a second generation expansion which will 
increase its crude production from 400,000 barrels per day to 
540,000 later this year.  Kashagan (with 16.7% ExxonMobil and 8.3% 
ConocoPhilips stakes) is the largest oil field discovery since 
Alaska's North Slope and perhaps the world's most technically 
complex oil development project.  In January, the Kazakhstani 
government and the Kashagan consortium's international partners 
agreed on revised terms for the Kashagan contract which resulted in 
a new operatorship model, financial compensation to Kazakhstan for 
several years of production delays and significant cost overruns, 
and an increased ownership stake and management role for 
Kazakhstan's state oil and gas company, KazMunaiGas (KMG). Kashagan 
is expected to commence production in 2013.  Karachaganak (with a 
20% Chevron stake) is one of the world's largest oil and gas 
condensate fields, producing 10.4 million tons of oil and 12 billion 
cubic meters of gas in 2007. 
 
5. (SBU) The Kazakhstanis recognize they do not have the capability 
 
ASTANA 00001355  002 OF 004 
 
 
to exploit their oil and gas resources on their own, especially 
given the complexity of Kazakhstan's oil and gas projects. 
Kazakhstan thus continues to welcome foreign investment in energy 
explor
ation and production, and both the Kazakhstani government and 
the international companies are committed to an enduring 
relationship.  That said, Kazakhstan has grown increasingly 
assertive in its energy sector in recent years, reexamining the 
terms of existing contracts, driving a harder bargain with 
prospective investors, and aggressively pursuing environmental and 
tax claims against international oil companies. 
 
6. (SBU) With major production increases on the horizon, Kazakhstan 
must develop additional transport routes to bring its oil and gas to 
market.  Our policy is to encourage Kazakhstan to seek diverse 
routes, which will ensure the country's independence from transport 
monopolists.  Currently, the bulk of Kazakhstan's crude oil is 
exported via Russia, including through the Transneft system and the 
independently-owned Caspian Pipeline Consortium (CPC) pipeline. 
Near-term crude production increases are likely to flow by rail 
through Russia, by tanker across the Caspian Sea to Baku, and 
through the CPC pipeline, should an agreement be reached with Russia 
on CPC expansion.  We believe that a trans-Caspian oil pipeline must 
be built to handle later production growth; however, Kazakhstan is 
reluctant to openly pursue this option in the absence of an 
agreement on delimitation of the Caspian Sea among the five Caspian 
littoral states. 
 
--------------------------- 
Democratic Development Lags 
--------------------------- 
 
7. (SBU) While the Kazakhstani government articulates a strategic 
vision of democracy, it has lagged on the implementation front. 
This in part reflects the political reality that President 
Nazarbayev remains extraordinarily popular, while the opposition is 
weak and fractured.  It also is a result of the government's 
resistance to competitive political processes.  In May 2007, 
significant amendments were adopted to Kazakhstan's constitution 
which were touted as strengthening parliament, but also removed 
terms limits on Nazarbayev.  In parliamentary elections held in 
August 2007, Nazarbayev's Nur Otan party officially received 88 
percent of the vote and took all the seats in parliament.  The OSCE 
election observation mission concluded that the elections did not 
meet OSCE standards. 
 
8. (SBU) When Kazakhstan was selected as 2010 OSCE chairman at the 
November 2007 OSCE Madrid ministerial meeting, Foreign Minister 
Tazhin publicly committed that his country would undertake several 
democratic reforms.  Specifically, he promised that by the end of 
2008, Kazakhstan would amend its election and media legislation 
taking into account the recommendations of the OSCE's Office of 
Democratic Institutions and Human Rights (ODIHR), as well as 
liberalize registration procedures for political parties and media 
outlets.  (Note:  Tazhin also promised that Kazakhstan would support 
the OSCE's "human dimension" and preserve ODIHR's mandate, including 
its critical role in election observation.  End Note.)  The 
government has thus far taken limited steps toward implementing its 
"Madrid commitments," including establishing working groups, with 
civil society and opposition participation, to discuss amendments to 
the election and media legislation.  In a June 29 address to the 
OSCE Parliamentary Assembly, President Nazarbayev publicly discussed 
the commitments for the first time.  Though much work remains, there 
is sufficient time for Kazakhstan to follow through by year's end -- 
and we have been repeatedly reassured by the government that it will 
do so.  We have made clear that reneging on the commitments would 
undermine Kazakhstan's effectiveness as future OSCE chair. 
 
----------------------------------------- 
Concerns on the Media and Religion Fronts 
----------------------------------------- 
 
9. (SBU) While Kazakhstan's diverse print media includes a plethora 
of newspapers sharply critical of the government and of President 
Nazarbayev personally, the broadcast media is almost exclusively in 
government hands and maintains a pro-government line, with little 
coverage of opposition parties.  The government apparently blocked 
several opposition websites in late 2007 for uploading recordings of 
embarrassing conversations between senior government officials 
(which were likely made by Nazarbayev's former son-in-law, Rakhat 
Aliyev, who was recently convicted in absentia of plotting a coup). 
Access has not been restored to all of these sites.  In April, the 
English- and Kazakh-language websites of Radio Free Europe/Radio 
Liberty (RFE/RL) became inaccessible to customers of state-owned 
Kazakhtelecom.  We raised the RFE/RL issue with senior officials. 
The government did not admit to actively blocking the RFE/RL 
websites, but they subsequently became accessible again in early 
June. 
 
ASTANA 00001355  003 OF 004 
 
 
 
10. (SBU) While Kazakhstan prides itself on its religious tolerance, 
religious groups not traditional to the country -- such as 
evangelical Protestants, Jehovah's Witnesses, Hare Krishnas, and 
Scientologists -- have faced difficulties.  There has recently been 
a significant increase in negative media coverage of 
"non-traditional" religions which appears to have been orchestrated 
in part by the government.  The Kazakhstani parliament is currently 
considering a package of amendments to the country's religion law 
which would assert greater government control over non-traditional 
groups.  While the latest draft text represents an improvement over 
the original version, it retains several problematic provisions, 
including ones that would create a distinction between large and 
small religious groups, limiting the rights of the latter.  At the 
urging of the U.S. and our OSCE partners, Kazakhstan submitted the 
legislation for review by ODIHR.  We want to ensure that Kazakhstan 
takes into account ODIHR's recommendations in the final version -- 
as senior Kazakhstani officials have promised us they will do. 
 
-------------------- 
Afghanistan and Iraq 
-------------------- 
 
11. (SBU) Kazakhstan is an important partner for Afghanistan's 
Operation Enduring Freedom (OEF).  To date, Kazakhstan has 
facilitated over 4000 cost-free overflights for U.S. military 
aircraft supporting OEF.  Kazakhstan is also providing Afghanistan 
with $2.88 million in assistance in 2008, which is being used for 
food and seed aid and to construct a hospital, school, and road. 
The Kazakhstanis are encouraging their private sector to seek out 
investment opportunities in Afghanistan, and have indicated that 
they want to make Afghanistan a focal point for their OSCE 
chairmanship.  In addition, Kazakhstan is the sole Central Asian 
country participating in Operation Iraqi Freedom (OIF).  Since 
August 2003, the Kazakhstanis have maintained a military engineering 
unit in Iraq which has disposed of over 4.5 million pieces of 
unexploded ordnance. 
 
---------------------------------------- 
U.S. Government Assistance to Kazakhstan 
---------------------------------------- 
 &#x000
A;12. (SBU) We are implementing a broad range of assistance programs 
in Kazakhstan to advance U.S. national interests and strengthen the 
U.S.-Kazakhstan strategic partnership.   Non-proliferation 
cooperation has been a hallmark of our bilateral relationship since 
Kazakhstan became independent and agreed to give up the nuclear 
arsenal it inherited from the USSR.  Our bilateral Nunn-Lugar 
Cooperative Threat Reduction (CTR) program has facilitated the 
dismantlement of Kazakhstan's intercontinental ballistic missile 
launchers, closure of test tunnels and boreholes at the former 
Soviet nuclear test site in Semipalatinsk, and elimination of an 
anthrax weapons production facility.  The Department of Defense and 
Department of Energy were allocated over $90 million in FY 2008 for 
ongoing programs in the nuclear field, including the effort to 
secure and store spent fuel from a closed plutonium production 
reactor in western Kazakhstan, and for a biological threat reduction 
program aimed at ensuring effective Kazakhstani control of dangerous 
pathogens.  On-going State Department non-proliferation programs 
focus on securing Kazakhstan's borders to prevent the spread of 
WMD-related materials. 
 
13. (U) USAID, with just under $13 million in Kazakhstan funding in 
FY 2008, is implementing programs in three areas: democracy, health, 
and economic development.  The democracy program includes activities 
to strengthen civil society and independent media and to enhance the 
dialogue between the government and the public on important policy 
issues.   Funding for health is aimed at promoting reform of the 
health care system, improving maternal and child health, and 
controlling tuberculosis and HIV.   The economic development 
program, which is essentially being phased out following FY 2009, 
receives co-financing from the Kazakhstani government.  It has 
focused, inter alia, on strengthening the government's 
economic-policymaking capabilities, promoting fiscal transparency, 
and fostering economic diversification and the development of small- 
and medium-sized enterprises. 
 
14. (SBU) Our military assistance aims to increase Kazakhstan's 
interoperability with U.S. and NATO forces, enhance Kazakhstan's 
participation in the Partnership for Peace, and increase 
Kazakhstan's capacity to serve in global peacekeeping operations. 
With $2.3 million in FMF and IMET funding plus a $10 million Section 
1206 allocation for FY 2008, we are providing boats and refurbished 
Huey-II helicopters for a Caspian Sea counter-terrorism rapid 
reaction force and are training Kazakhstani military personnel. 
Other U.S security assistance programs are enhancing Kazakhstan's 
effectiveness in combating drug trafficking, promoting law 
 
ASTANA 00001355  004 OF 004 
 
 
enforcement reform, and bolstering Kazakhstan's efforts to prevent 
trafficking in persons. 
 
15. (U) Approximately 200 Kazakhstanis -- including high school, 
undergraduate, and graduate students, as well as government 
officials and private sector leaders -- are being sent to the U.S. 
in 2008 on public diplomacy-funded exchange programs, such as the 
FLEX, Muskie, and International Visitors Leadership programs. 
(Note:  Overall, approximately 2000 Kazakhstanis are studying full 
time in the United States, including 700 funded by the Kazakhstani 
government's Bolashak scholar program.  In addition, almost 4000 
Kazakhstani students are participating this year in the private 
sector-sponsored Summer Work/Travel Program, which affords foreign 
students an opportunity to temporarily work in and travel throughout 
the U.S. during their summer vacations.  End Note.)  The first Peace 
Corps volunteers arrived in Kazakhstan in July 1993.  Our Peace 
Corps program currently averages 130 volunteers in country at any 
time, with two-thirds involved in educational activities and the 
remainder engaged in organizational and community development. 
 
ORDWAY

Wikileaks

08ASTANA1348, S) KAZAKHSTAN: ADDITIONAL INFORMATION ON DPRK –

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1348.
Reference ID Created Released Classification Origin
08ASTANA1348 2008-07-25 09:32 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0001
PP RUEHWEB

DE RUEHTA #1348 2070932
ZNY SSSSS ZZH
P 250932Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2835
INFO RUEHAH/AMEMBASSY ASHGABAT 7339
RUEHBJ/AMEMBASSY BEIJING 0050
RUEHEK/AMEMBASSY BISHKEK 8312
RUEHDBU/AMEMBASSY DUSHANBE 2376
RUEHBUL/AMEMBASSY KABUL 0405
RUEHNT/AMEMBASSY TASHKENT 8179

S E C R E T ASTANA 001348 
 
SIPDIS 
 
DEPARTMENT FOR EAP, NEA, ISN, SCA, AND T 
 
E.O. 12958: DECL: 07/25/2018 
TAGS: PARM PREL MNUC KNNP KZ
SUBJECT: (S) KAZAKHSTAN: ADDITIONAL INFORMATION ON DPRK - 
IRAN FLIGHT DELIVERED 
 
REF: A. STATE 80081 
     B. ASTANA 1342 
 
Classified By: PolEcon Chief Steve Fagin, for reasons 1.4 b and d 
 
(S)  On July 25, we delivered ref. A points to Sergey 
Saveliev, the Deputy Director of Department of MFA's 
International Organizations and International Security Sergey 
Saveliyev.  He thanked us for the prompt notification and 
clarified that Kazakhstan's denial of overflight clearance 
was still making its way through the MFA and has not yet been 
passed to the North Koreans.  He said it is still possible 
that the flight is a non-proliferation risk, but expressed 
worry that denying a diplomatic flight would earn Kazakhstan 
significant criticism at the NAM meeting.  Nevertheless, he 
said, Kazakhstan still intends to deny the overflight flight, 
citing technical reasons (the request did not list the 
purpose of travel).  Saveliyev reiterated yesterday's request 
for the positions of other Central Asia states on DPRK 
overflights (ref. B). 
ORDWAY

Wikileaks

08ASTANA1346, KAZAKHSTAN – GOVERNMENT MOVING FORWARD ON TAX CODE REFORM

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1346.
Reference ID Created Released Classification Origin
08ASTANA1346 2008-07-25 02:49 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5765
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1346/01 2070249
ZNR UUUUU ZZH
R 250249Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2831
INFO RUCNCIS/CIS COLLECTIVE 0575
RUEHAST/USOFFICE ALMATY 0612

UNCLAS SECTION 01 OF 03 ASTANA 001346 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV PGOV KZ
SUBJECT:  KAZAKHSTAN - GOVERNMENT MOVING FORWARD ON TAX CODE REFORM 
 
ASTANA 00001346  001.2 OF 003 
 
 
Summary 
------- 
 
1.  Following presidential guidance, a Government of Kazakhstan 
(GOK) Tax Working Group quickly produced proposed amendments to the 
tax code.  USAID assistance in the areas of corporate income tax, 
value added tax (VAT) and the attendant administrative procedures 
was well received.  On June 18, Prime Minister Masimov chaired a 
round table presentation and discussion of the concepts included in 
draft tax code amendments.  The stated goals in drafting were that 
the tax code should comply with the principles of clarity, equity, 
transparency, and coherence and that the amendments should 
incorporate international best practice to support voluntary 
compliance, including in registration, assessment and payment of 
taxes.  In general, the proposals clearly move toward those goals. 
While specific rates were not mentioned, it is likely that the rates 
for corporate income tax will be significantly reduced.  End 
Summary. 
 
Tax Code Reform: A Government of Kazakhstan Priority 
------------------------ --------------------------- 
 
2.  In his annual address to the nation on February 6, President 
Nazabayev made reform of the tax code a priority task for this year. 
 In particular, he said: "The current tax code has played a positive 
role in economic growth; however, its potential is practically 
exhausted. The code includes over 170 privileges and preferences, 
which are constantly and unsystematically increasing. The government 
shall elaborate a new tax code. It shall facilitate modernization 
and diversification of the economy, withdrawal of businesses from 
the 'shadows,' as well as combine administration with the interests 
of tax-payers.  But most importantly, it shall envisage reduction of 
the total tax burden for non-primary economic sectors, particularly 
for small and medium sized-businesses.  The estimated budget losses 
shall be compensated by increased economic returns from the 
extractive sector." 
 
3.  On February 8, Prime Minister Masimov issued an order putting 
Deputy Prime Minister Orynbayev in charge of a 25-member, 
multi-agency Working Group ("the WG") led by the Ministry of Economy 
and Budget Planning (MEBP) and including all relevant ministries and 
agencies as well select representatives of the business sector to 
develop and submit the draft tax code for government consideration 
by July 1, 2008.  Organizing the WG process was completed by early 
April, when drafting began in earnest.  Given the short time frame 
the focus was on substantial amendments (as opposed to a new code) 
to the code which would bring it in line with the President's 
objectives of improving the efficiency and effectiveness of the 
system. 
 
4.  In early April, the WG presented a specific list of issues on 
which international expert assistance was requested, including a 
number of well-defined points of procedure and principles related to 
corporate income tax, taxation of the financial sector, and value 
added tax (VAT), with particular reference to improving VAT refunds. 
 Additional issues included enhanced self-assessment, sector 
specific issues for transport, real estate, agriculture, and support 
for small and medium enterprises (SMEs); and proposals to streamline 
and improve tax administration.  Following donor coordination 
discussions, a focused program of USAID technical assistance was 
agreed to in the areas of corporate income tax, VAT, and related 
changes for tax administration. 
 
USG Support: U.S.-Kazakhstan Program for Economic Development 
------------------------ ------------------------------------ 
 
5.  USAID collaboration with the Government of Kazakhstan (GOK) in 
the area of economic development is currently organized under the 
jointly-funded Program for Economic Development (PED).  In 2008, 
USAID is implementing nine projects under the PED including the 
"Economic Reform to Enhance Competitiveness" (EREC) Project, which 
has within its scope of work specific tasks to build capacity with 
MEBP in a variety of areas related to fiscal policy development and 
implementation.  In early March, USAID representatives and a 
technical team from the EREC Project met with MEBP to discuss the 
full range of EREC implementation issues within the frame of the 
PED. At that meeting, MEBP gave strong direction to prioritize USAID 
assistance via EREC on the tax code. 
 
6.  Given the accelerated time-line for preparing the new tax code, 
the EREC team operated in "drafting mode", focused on providing 
targeted, substantive reviews of proposed draft text for amendments 
to the tax code, as requested. Associated brief policy reviews 
incorporated a comparison to a range of international best 
practices, analysis of amendment effectiveness in achieving goals, 
and any possible recommendations for improvement designed to 
maximize effectiveness of assistance by ensuring that discussion 
targeted the identified needs of the Working Group. 
 
The Current Situation 
--------------------- 
 
 
ASTANA 00001346  002.2 OF 003 

 
 
7.  On June 18, Prime Minister Masimov chaired a round table 
presentation and discussion of the draft tax code in Astana, which 
included the full range of GOK ministries and agencies, 
representatives of the Mazhilis and Senate, representatives of the 
business sector, and donors. Deputy Prime Minister Orynbayev made 
the lead presentation which focused on a summary of key changes 
under a number of headings, including implementation of the 
"directly applicable law" principle; corporate income tax; VAT; 
reform of small businesses taxation; reform of agriculture taxation; 
property tax for legal entities and individual entrepreneurs; social 
tax; optimization of tax concessions; reform of international 
taxation; reform of mineral resources users' taxation; and tax 
administration.  The stated goals in drafting were that the tax code 
should comply with the principles of clarity, equity, transparency, 
and coherence and that it should incorporate international best 
practice to support voluntary compliance, including in registration, 
assessment and payment of taxes.  In general the proposals clearly 
move toward those goals. 
 
8.  With regard to the corporate income tax, the key changes are to: 
adapt the tax code to the application of International Financial 
Reporting Standards (IFRS); cancel advance payments for corporate 
income taxes for SMEs; and increase the period for tax loss 
carry-forward to 10 years from the current 3 years. With regard to 
the VAT, the key changes are: a well-defined and phased approach to 
streamlining and speeding up refunds through the introduction of a 
risk assessment system for targeting audits; and a phased 
elimination of deferrals for imports of machinery and equipment not 
produced in Kazakhstan (by 2011) and of intermediate goods for 
industrial production not produced in Kazakhstan (by 2012).  With 
regard to tax administration, the key changes are to: increase the 
length of time for submission of tax returns while establishing a 
uniform period both for filing and payment; introduce a system of 
risk management for audit that meets international standards for 
clarity and transparency; and increase the automation of tax 
administration processes. 
 
9.  With regard to proposed changes for the reform of small business 
and agricultural taxation, of property tax for legal entities and 
individual entrepreneurs of social tax; and for the elimination of 
tax concessions and reform of international and mineral resources 
taxation, the proposals are broadly in line with the directions of 
tax policy recommendations developed since 2006 in collaboration 
with the World Bank under the Joint Economic Research Program (Tax 
Strategy Paper: Volume I "A Strategic Plan for Increasing the 
Neutrality of the Tax System in Non-Extractive Sectors; Volume II: 
Tax Administration Issues). 
 
10.  With regard to changes in taxation of mineral resource users, 
the proposed changes include replacement of royalty with a tax on 
mining operations (TMO) that shall be paid for each type of mineral 
resources produced in Kazakhstan.  The volume of hydrocarbons and 
the solid mineral resources (SMR) contained in the ore (concentrate, 
solution) will be taxed. Rates shall be established following the 
decision on how much the corporate income tax will be in the new tax 
code provided that the change in the total tax burden ensures 
acceptable profitability for mineral resources users (no less than 
10%); TMO rates for oil, including gas condensate shall be 
established as per ascending scale with consideration of the volume 
(recoverable reserves, production) based on the world price. For 
low-profitable, high-viscosity, watered, low-yield and worked-out 
deposits there shall be established decreasing coefficients to the 
TMO rates. For natural gas, including gas hydrocarbons, extracted 
together with the liquid hydrocarbons, the rate would be 15%. 
 
11. In the area of international taxation: the concept of 
"constructive dividends" (the amounts paid by a company to the 
shareholder, founder, participant or its interrelated parties for 
goods, works or services which violate the "arm's length" principle) 
will be introduced and tax agents will be allowed to independently 
apply the provisions of international agreements and take decisions 
on release from the tax or refusal at the moment of income payment 
to a non-resident, on the basis of the residency certificate. 
 
Opportunities and Risks 
----------------------- 
 
12.  The proposed changes to the tax code to be considered by the 
GOK in July are generally quite positive, although it remains to be 
seen whether they will be substantially revised during the period of 
government review.  While the government has yet to propose tax 
rates, it is likely that corporate income tax will be reduced from 
30% to 15%, that social tax will be changed from a regressive 5-20% 
tax to a flat 10%, and that there will be a declining VAT.  Current 
simplified regimes for SMEs, contrary to USAID advice, would remain. 
 
 
13.  In Kazakhstan, as throughout Central Asia and the former Soviet 
Union, there is often a significant gap between law and its 
implementation.  The current tax code is often not implemented 
according to its spirit, much less its letter, and there remain 
significant implementation risks with the new code. 
 
ASTANA 00001346  003.2 OF 003 
 
 
 
14. Representatives of Kazakhstan's business community have 
expressed their concern about not being involved in process of 
elaborating the amendments.  Their proposals notably include VAT 
exemption for businesses that provide services, granting 5-year tax 
exemptions to manufacturing businesses, reduction of the corporate 
income tax to 10%, and reduction of social tax to 5% or replacement 
of social tax with compulsory medical insurance. 
 
ORDWAY

Wikileaks

08ASTANA1343, U.S. ENVIRONMENTAL EXPERT DISCUSSES CLIMATE CHANGE WITH

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1343.
Reference ID Created Released Classification Origin
08ASTANA1343 2008-07-25 01:47 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5750
RR RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1343 2070147
ZNR UUUUU ZZH
R 250147Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2827
INFO RUCNCIS/CIS COLLECTIVE 0574
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHAST/USOFFICE ALMATY 0611

UNCLAS ASTANA 001343 
 
STATE FOR OES, SCA/CEN (O'MARA), SCA/PPD (HOUGE) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV SOCI PREL ENRG KZ
 
SUBJECT: U.S. ENVIRONMENTAL EXPERT DISCUSSES CLIMATE CHANGE WITH 
KAZAKHSTANI AUDIENCES 
 
1.  As part of its U.S. speaker program, U.S. Embassy Astana 
sponsored the July 7-12 visit to Kazakhstan of environmental law 
expert Dr. John Dernbach in order to familiarize Kazakhstani 
audiences with the concepts of sustainable economic growth and the 
importance of energy conservation in mitigating the effects of 
global climate change.  Dr. Dernbach is Professor of Environmental 
Law at Widener University in Harrisburg, Pennsylvania.  He had a 
variety of meetings, public lectures, and round tables with 
Kazakhstani government officials, environmental organizations, 
journalists, USG program alumni, and members of the general public 
in four cities:  Almaty, Astana, Ust-Kamenogorsk, and Ridder.  Dr. 
Dernbach gave practical recommendations to the Ministry of 
Environmental Protection on the Kazakhstani Environmental code and 
on improving energy efficiency. 
 
2.  During his public lectures at the American Cultural Centers in 
Almaty and Ust-Kamenogorsk, Dr. Dernbach explained that with the 
proper policies in place, economic growth and environmental 
protection can go hand in hand, and that ecological preservation can 
actually support other development goals.  He addressed the negative 
effects of global climate change on the Eurasian continent in terms 
of its effects on human health, agriculture, water resources, and 
economic security. Dr. Dernbach's lectures were covered by both 
national and regional media, including the Panorama and Megopolis 
newspapers, KTV, and several internet news sites.  Additionally, 
ecological NGOs in Ridder expressed strong interest in having Dr. 
Dernbach's forthcoming book on sustainable development translated 
into Russian. 
 
3. In a meeting on July 8 with the Ministry of Environmental 
Protection, Dr. Dernbach highlighted the concept of sustainable 
development and the inseparability of economic development and 
environmental protection.  He noted that in the United States, 
states such as California and Pennsylvania have been at the 
forefront of efforts to reduce greenhouse gas emissions.  He also 
linked Kazakhstan's desire to become one of the fifty most 
competitive countries in the world to certain benchmarks that 
developed countries must meet in environmental standards.  While Dr. 
Dernbach applauded Kazakhstan for developing a new environmental 
code and a program on sustainable development, he noted several 
omissions from the code and made some specific recommendations.  For 
instance, he suggested several cost-effective measures that 
Kazakhstan could immediately put in place to promote energy 
efficiency and reduce air pollution.  These include building codes 
for new construction, thermostats in office buildings and 
apartments, energy-saving appliances, and emissions standards for 
automobiles.  He also suggested that Kazakhstan begin a program on 
waste management and recycling.  The Ministry of Environmental 
Protection representatives admitted that Kazakhstan currently has 
low energy efficiency standards, and appeared open to considering 
his suggestions. 
 
4. Comment:  This was a particularly effective speaker program.  Dr. 
Dernbach communicated the main conceptual ideas on sustainable 
development in a very persuasive manner.  The program succeeded in 
raising the awareness of diverse audiences in Kazakhstan about the 
issues of sustainable development and climate change, especially its 
relevance to Central Asia.  This program was a good start in 
encouraging discussion of environmental policies and attitudes among 
government officials, NGOs, and youth in Kazakhstan.  In September, 
post will sponsor a follow-on speaker program by bringing to 
Kazakhstan a U.S. expert on waste management and recycling.  End 
Comment.

Wikileaks

08ASTANA1342, S) KAZAKHSTAN DENIES DPPK OVERFLIGHT

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1342.
Reference ID Created Released Classification Origin
08ASTANA1342 2008-07-24 11:56 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0000
PP RUEHWEB

DE RUEHTA #1342 2061156
ZNY SSSSS ZZH
P 241156Z JUL 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2826
INFO RUEHAH/AMEMBASSY ASHGABAT 7338
RUEHBJ/AMEMBASSY BEIJING 0049
RUEHEK/AMEMBASSY BISHKEK 8311
RUEHDBU/AMEMBASSY DUSHANBE 2375
RUEHBUL/AMEMBASSY KABUL 0404
RUEHNT/AMEMBASSY TASHKENT 8178

S E C R E T ASTANA 001342 
 
SIPDIS 
 
DEPARTMENT FOR EAP, NEA, ISN, AND T 
 
E.O. 12958: DECL: 07/24/2018 
TAGS: PREL PARM MNUC KNNP KZ
SUBJECT: (S) KAZAKHSTAN DENIES DPPK OVERFLIGHT 
 
REF: STATE 79112 
 
Classified By: PolEcon Chief Steve Fagin, for reasons 1.4 b and d 
 
(S) On July 24, we delivered reftel points to MFA's Deputy 
Director of International Security and International 
Organizations Department Sergey Saveliyev.  He thanked us for 
the information and notified us that Kazakhstan has denied 
overflight clearance to the DPRK flight.  Saveliev also 
requested information on the positions of other Central Asian 
states on DPRK overflights.  This, he said, would help the 
GOK formulate a concrete policy position.  He anticipated 
pressure from the newly accredited DPRK Ambassador to 
Kazakhstan (who is resident in Moscow). 
ORDWAY

Wikileaks

08ASTANA1341, KAZAKHSTAN: OSCE HUMAN DIMENSION DEMARCHE DELIVERED

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1341.
Reference ID Created Released Classification Origin
08ASTANA1341 2008-07-24 11:08 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0023
RR RUEHWEB

DE RUEHTA #1341 2061108
ZNR UUUUU ZZH
R 241108Z JUL 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 2825

UNCLAS ASTANA 001341 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM PREL OSCE KDEM KZ
SUBJECT: KAZAKHSTAN: OSCE HUMAN DIMENSION DEMARCHE DELIVERED 
 
REF: STATE 76294 
 
(SBU)  We delivered reftel points to MFA's Acting Director of 
OSCE Department Maksim Sholin.  Sholin thanked us for the 
advance points on the OSCE Human Dimension meeting. 
Kazakhstan will be represented at the meeting at the 
appropriately high level, he said, although the final 
decision on representation has not yet been made.  In 
response to the individual points raised, Sholin said that 
the GOK was working on fulfilling the Madrid commitments, and 
he expects draft laws on elections, media, and political 
parties to go to Parliament in the Fall.  He reiterated the 
GOK's commitment to maintaining ODIHR's mandate intact and 
said he will pass our concern about lack of verbal support to 
FM Tazhin.  On the pending religion law, Sholin said that 
OSCE's religious freedom expert held several meetings with 
the government in June, and he expects that the draft 
legislation will reflect OSCE's recommendations. 
ORDWAY

Wikileaks

08ASTANA1327, KAZAKHSTAN – DISCUSSIONS WITH GOK ON CO-FINANCING HEALTH

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1327.
Reference ID Created Released Classification Origin
08ASTANA1327 2008-07-23 11:32 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO4101
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #1327 2051132
ZNR UUUUU ZZH
R 231132Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2814
INFO RUEHAST/USOFFICE ALMATY 0594
RUCNCIS/CIS COLLECTIVE 0573

UNCLAS ASTANA 001327 
 
STATE FOR OGAC, SCA/CEN (O'MARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID SOCI PGOV PREL KZ
 
SUBJECT: KAZAKHSTAN - DISCUSSIONS WITH GOK ON CO-FINANCING HEALTH 
SECTOR REFORM 
 
Summary 
------- 
 
1. (U) Summary:  The DCM and USAID held a productive meeting with 
Minister of Health Dernovoi on July 15 to discuss a new joint 
strategy in the health sector, the "Partnership for Health 
Development" (PHD).  The proposal would combine USG assistance funds 
with matching funds from the GOK to support reform in the health 
sector.  The PHD is modeled on the successful Partnership for 
Economic Development (PED), which involves co-funding from the GOK 
to support economic reform and development objectives.  While the 
Ministry of Health strongly supports this idea, there are issues to 
be worked out, including specifying the GOK funding mechanism.  End 
Summary. 
 
Minister of Health Supports Partnership Model 
--------------------------------------------- - 
 
2. (U) On July 15, the Deputy Chief of Mission and the Director for 
USAID's Health Program for Central Asia met with Minister of Health 
Dernovoi to discuss future cooperation in the health sector.  The 
meeting was timely, as both the Ministry of Health and USAID are 
currently devising new strategic plans for Kazakhstan's health 
sector during the next five years.  Minister Dernovoi has secured 
commitments of higher funding levels from the government budget, 
together with funding from the World Bank for the reforms envisaged. 
 Minister Dernovoi and the Embassy are seeking resources for USAID's 
participation in this effort.  Funding from the GOK to support the 
PHD would provide the technical assistance required by the new 
health strategy. 
 
3. (U) Based on the successful model on the Program for Economic 
Development (PED) between the USG and GOK, USAID and the Ministry of 
Health (MOH) are now working on a Program for Health Development 
(PHD), which would involve co-financing of assistance programs 
between the USG and the GOK.  Under the proposed compact, USAID 
would contribute an estimated $2.5 million per year over the next 
five years for health sector reform (including for TB and HIV/AIDS 
prevention and treatment), and the GOK would match these funds. 
 
4. (U) Minister Dernovoi noted that the co-financing model is very 
attractive and promising.  However, this proposal requires 
high-level support from the Cabinet of Ministers and Ministry of 
Foreign Affairs (MFA).  Dernovoi suggested that the USG draft a 
letter to Prime Minister Masimov outlining our ideas and plans for 
future collaboration in the health sector using the PED model.  He 
also instructed his staff to have follow-on meetings with USAID 
officials to work out all the details. 
 
Financing Issues To Be Worked Out 
--------------------------------- 
 
5. (U) A subsequent working level meeting was held with Ministry of 
Health officials to discuss the details of the proposed PHD.  One 
issue is whether the GOK can use funds from a World Bank loan for 
the health sector to finance their share of the PHD, or whether they 
need to use funds directly from their state budget.  We are 
exploring whether periodic audits will be required if funds are 
transferred to USAID from MOH as part of the GOK's loan agreement 
with the World Bank.  Another issue is who would sign such a joint 
compact on behalf of the USG and on behalf of the GOK.  (Comment: 
We think it would be logical for the U.S. Ambassador to sign such a 
document as the interagency representative of all USG agencies at 
post which receive USG assistance funds in the health sector.  End 
Comment.)  On the Kazakhstani side, the Ministry of Health and the 
Ministry of Foreign Affairs would presumably sign the compact. 
 
Comment 
------- 
 
6. (U) We see the proposed PHD, modeled on the successful PED, as a 
positive way to support implementation of health sector reform, 
which is a high priority in our Mission Strategic Plan. 
Furthermore, as a mid-level developing country, Kazakhstan can 
devote more of its own budgetary resources to match USG assistance 
dollars.  USAID will continue meeting with the Ministry of Health to 
finalize the details of this proposed partnership. End Comment. 
 
ORDWAY

Wikileaks

08ASTANA1321, KAZAKHSTAN – LAUNCH OF THE PUBLIC PRIVATE ECONOMIC

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1321.
Reference ID Created Released Classification Origin
08ASTANA1321 2008-07-23 01:47 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3769
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1321/01 2050147
ZNR UUUUU ZZH
O 230147Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2808
INFO RUCNCIS/CIS COLLECTIVE 0569
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 04 ASTANA 001321 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EAID PREL PGOV KZ
 
SUBJECT: KAZAKHSTAN - LAUNCH OF THE PUBLIC PRIVATE ECONOMIC 
PARNTERSHIP INITIATIVE 
 
------- 
SUMMARY 
------- 
 
1. (U) Special Representative for Commercial and Business Affairs 
Frank Mermoud and Commerce DAS Paul Dyck joined Kazakhstani Prime 
Minister Masimov and a delegation of U.S. and Kazakhstani public and 
private sector officials to launch the U.S.-Kazakhstan 
Public-Private Economic Partnership Initiative (PPEPI) in Astana on 
June 24. Discussion was organized around the PPEPI's six pillars. 
All sides acknowledged the need to tackle difficult issues so as to 
further improve Kazakhstan's investment climate.  Participants had 
an opportunity to directly address questions of concern to Prime 
Minister Masimov.  The launch concluded with the issuance of a Joint 
Statement, which envisions the formation of a PPEPI Coordination 
Committee and PPEPI working groups.  End Summary. 
 
------------------------------------------- 
PROMOTING A HEALTHY BUSINESS CLIMATE IS KEY 
------------------------------------------- 
 
2. (U) The U.S.-Kazakhstan Public-Private Economic Partnership 
Initiative (PPEPI) was launched in Astana on June 24.  The all-day 
program supported by EEB/CBA, SCA, and U.S. Embassy Astana included 
sessions devoted to each of the PPEPI's six pillars (economic 
diversification, anti-corruption, transparency, exchanges of experts 
and technology, regional integration, WTO accession) and a keynote 
address by Prime Minister Masimov, following which he answered 
questions from the audience.  In addition to the four official PPEPI 
partners -- the USG, Kazakhstani government, American Chamber of 
Commerce in Kazakhstan (AmCham), and Kazakhstan's Atameken National 
Economic Chamber -- the U.S.-Kazakhstan Business Association (USKBA) 
and Kazakhstan's Forum of Entrepreneurs also played prominent roles 
at the launch. 
 
3. (U) Vice Minister of Industry and Trade Edil Mamitbekov delivered 
opening remarks at the June 24 event, reminding the audience that 
the U.S. is the largest source of foreign investment in Kazakhstan. 
He expressed the hope that PPEPI would strengthen U.S.-Kazakhstan 
economic ties through "long-term dialogue," establish greater 
confidence between U.S. and Kazakhstani businesses, and contribute 
to Kazakhstan's economic diversification.  In his follow-on address, 
senior Commerce Department representative DAS Paul Dyck explained 
that the PPEPI was unique in being private-sector driven.  He 
stressed the need to further strengthen Kazakhstan's business 
climate.  Atameken's Azat Peruashev noted in his own remarks that 
the Kazakhstani government had recently adopted decisions aimed at 
reducing administrative barriers to business activity.  The AmCham's 
Ken Mack stressed that the principal aim of PPEPI should be to 
provide policy recommendations that would promote a healthy business 
environment.  He noted that for much of the audience, economic 
diversification is the most important PPEPI pillar, but the key to 
diversification, he argued, is progress on the other five pillars, 
especially anti-corruption. 
 
------------------------ 
ECONOMIC DIVERSIFICATION 
------------------------ 
 
4. (U) A session on economic diversification followed the addresses 
by Mamitbekov, Dyck, Peruashev, and Mack.  Timur Nurashev, Chairman 
of the Ministry of Industry and Trade's Investment Committee, noted 
the economic progress Kazakhstan had already made, attracting 80 
percent of all the foreign investment in the Central Asia region. 
World Bank Kazakhstan Country Director Sergey Shatalov argued that 
successful economic diversification will require legal stability, 
political stability, regulatory efficiency, and strong 
anti-corruption measures.  He contended that tax privileges and 
other investment benefits may be important at the initial stage of 
promoting investment, but in the long-run they can be economically 
distorting. 
 
--------------- 
ANTI-CORRUPTION 
--------------- 
 
5. (U) During a session on anti-corruption measures, Customs 
Committee Deputy Chairman Serzhan Duysembayev readily admitted that 
corruption is an "acute problem" in the customs service.  The 
Customs Committee had done an analysis and found 58 different types 
of customs-related corruption.  As a result, he explained, Customs 
was changing its procedures to decrease opportunities for 
corruption.  Yerlan Sagadiyev, an advisor to Prime Minister Masimov, 
told the audience that Kazakhstan's new Tax Code -- which is 
expected to be adopted by the end of the year -- would increase 
transparency and reduce corruption.  The economic aim of tax reform, 
he explained, was to gradually shift the tax burden from production 
to wealth.  Raimbek Batalov of the Forum for Entrepreneurs argued 
that the situation with small- and medium-sized enterprises (SMEs) 
 
ASTANA 00001321  002 OF 004 
 
 
is not sustainable.  They are hampered by corruption and the shadow 
economy.  Though the government has recently taken steps to reduce 
administr
ative barriers to business activity, it must do more on 
that front.  In addition, in order to assist SME development it is 
necessary to improve Kazakhstan's infrastructure, reform the tax and 
customs codes, provide better SME financing, and improve education 
and human capital. 
 
------------ 
TRANSPARENCY 
------------ 
 
6.  (U) Leading off a session on transparency, Asian Development 
Bank Country Director Steven Wermert focused on government tenders. 
He contended that the lack of prequalification requirements for 
bidders deters prospective foreign participants who presume that 
less qualified but politically connected domestic companies are 
advantaged in the tender process.  Karl Bach, Project Manager of the 
World Bank's Central Asia Corporate Governance project, highlighted 
the importance of bringing Kazakhstani corporate governance in line 
with international standards.  He argued that progress remains slow 
on implementing accounting and corporate disclosure.  Businesses are 
especially reluctant, he said, to provide better information on 
conflicts-of-interest and related-party transactions.  Dina 
Shazhenova, Executive Secretary of the Ministry of Economy and 
Budget Planning, discussed the government's efforts to improve 
transparency through making state services more accessible, 
including through e-government initiatives. 
 
----------------------------------- 
EXCHANGES OF EXPERTS AND TECHNOLOGY 
----------------------------------- 
 
7. (U) In a session on exchange of experts and technology, Nick 
Olds, Country Manager for ConocoPhillips, argued that effective 
integration of knowledge and technology is critical to achieving the 
goal of economic diversification.  Atameken's Azat Peruashev argued 
for exchange of American stock market expertise with Kazakhstanis. 
USAID Central Asia Regional Director Bill Frej proposed partnering 
the 30 Kazakhstani firms selected to participate in the government's 
"30 Corporate Leaders Program" with foreign companies as means to 
facilitate technology transfer and enhance cooperation. 
 
-------------------- 
REGIONAL INTEGRATION 
-------------------- 
 
8. (U) In a session on regional integration, USKZBA's Bill Veale 
stressed the importance of transport, logistics, and trade 
facilitation in developing regional economic links.  The Lancaster 
Group's Nurlan Kapparov argued that Kazakhstan has great potential 
as a transit bridge between Europe and Asia.  He emphasized the need 
to develop railway, highway, air routes, and pipelines to maximize 
Kazakhstan's attraction as a transit corridor.  Ali Takesh of Philip 
Morris complained that differing and complex customs procedures have 
made it impossible for his company to export production from 
Kazakhstan to Uzbekistan. 
 
------------- 
WTO ACCESSION 
------------- 
 
9. (U) During a session on WTO accession, Betsy Hafner, USTR's 
Director for Russia and Eurasia, argued that low tariffs and open 
access to services markets -- two sensitive points in Kazakhstan's 
WTO negotiations -- are both good for Kazakhstan.  High tariffs, she 
contended, increase prices for consumers, increase input costs for 
producers, and encourage smuggling.  Hafner explained that open 
access to services ensures supplies of services at world prices, 
benefiting manufacturers as well as consumers.  Discussing yet 
another sensitive area, she contended that rigid controls on foreign 
labor are counter-productive, discouraging foreign investment. 
Zhanar Aitzhanova, Vice-Minister of Industry and Trade and 
Kazakhstan's lead WTO negotiator, described numerous initiatives to 
both improve the investment climate and speed Kazakhstan's WTO 
accession.  Aitzhanova highlighted current efforts to liberalize the 
financial services sector, and asked that the U.S. take into account 
the WTO accession conditions it has requested from Russia when 
negotiating Kazakhstan's accession. 
 
---------------------------------- 
MASIMOV ANSWERS AUDIENCE QUESTIONS 
---------------------------------- 
 
10. (U) State Department Special Representative for Commercial and 
Business Affairs Frank Mermoud introduced Prime Minister Masimov, 
thanking him for his leadership and for his participation in the 
launch event.  Mermoud noted that significant advancements in 
reducing trade barriers would benefit the public and private sectors 
 
ASTANA 00001321  003 OF 004 
 
 
of both countries.  In his keynote address, Masimov reminded the 
audience that Kazakhstan had already attracted over $80 billion in 
foreign investment and was aiming to become one of the world's 50 
most competitive countries.  Masimov stressed that the PPEPI pillars 
were all focus areas for the Kazakhstani government.  Following his 
prepared remarks, Masimov responded to audience questions, 
addressing, inter alia, fairness, transparency, and competition.  He 
also admitted the need to reduce corruption in both tax and customs 
by streamlining and simplifying procedures.  In response to a 
question about pressures on foreign businesses from regional 
authorities, Masimov acknowledged the problem, and said that the 
inconsistent application and enforcement of laws by regional 
authorities is a critical concern for the central government.  After 
the question and answer period, the AmCham's Ken Mack read out the 
agreed-to PPEPI Joint Statement, which envisions the formation of a 
PPEPI Coordination Committee and PPEPI working groups. (see para 12 
for the Joint Statement text). 
 
------- 
COMMENT 
------- 
 
11. (SBU) Earlier concerns, particularly on the part of the AmCham, 
that the Kazakhstanis would try to turn the launch event away from 
the ambitious aims of PPEPI and into yet another routine investment 
conference proved to be unfounded.  Instead, there was a clear 
understanding that the PPEPI is not about directly cutting business 
deals, but rather about proposing policy changes that, if 
implemented, will ultimately lead to more foreign investment, 
economic growth, and economic diversification.  The Kazakhstanis 
were, in fact, very accommodating in agreeing to almost all of the 
requests of the USG and AmCham regarding both the format of the 
launch event and the substance of the PPEPI Joint Statement.  This 
included enshrining all six original PPEPI pillars in the Joint 
Statement and ensuring all were covered at the launch.  Prime 
Minister Masimov also delivered on his promise to reserve a time 
block to answer participants' questions following his keynote 
address.  That the Kazakhstanis have become much more open to 
seriously discussing tough, uncomfortable issues related to the 
investment climate was best evidenced by the remarks of Customs 
Committee Deputy Chairman Duysembayev, who minced no words about 
corruption in the customs service.  Our next step should be to move 
forward expeditiously in forming several PPEPI working groups, so as 
not to lose the momentum from the successful launch event.  End 
Comment. 
 
-----------
---- 
JOINT STATEMENT 
--------------- 
 
12. (U) The following is the full text of the PPEPI Joint 
Statement. 
 
BEGIN TEXT 
 
JOINT STATEMENT ON THE U.S.-KAZAKHSTAN PUBLIC-PRIVATE ECONOMIC 
PARTNERSHIP 
 
Astana, June 24, 2008 
 
Building on the United States-Kazakhstan strategic partnership and 
recognizing the fundamental role of the private sector in creating 
sustained economic growth, the Governments of the United States and 
Kazakhstan have established the Public-Private Economic Partnership 
to invest our public and private sectors in a shared vision of 
stability, prosperity, and reform in Kazakhstan. 
 
The Partnership will propose policy reforms and other actions to 
remove impediments to, and create opportunities for, successful 
investment in Kazakhstan.  It is intended to advance the following 
objectives: 
 
(1) Development of robust anti-corruption measures; 
 
(2) Economic diversification, with a special emphasis on small- and 
medium-sized enterprises; 
 
(3) Transparency and good governance, in particular measures that 
improve the investment climate by reducing corruption, removing 
administrative and legislative barriers, and strengthening the rule 
of law; 
 
(4) Scientific and technical cooperation and exchanges of 
specialists between universities, research institutes, and private 
business; 
 
(5)  Highlighting the advantages that membership in the World Trade 
Organization will give to American and Kazakhstani investors and 
traders as well as positive impact on bilateral trade relations and 
 
ASTANA 00001321  004 OF 004 
 
 
the overall economies of both countries; 
 
(6) Regional economic integration that will bolster the 
independence, sovereignty, and security of the countries of the 
region, ensuring their sustainable development and prosperity. 
 
The Governments of the United States and Kazakhstan, The American 
Chamber of Commerce in Kazakhstan, the Chamber "Atameken" are 
expected to be Partners in the Partnership.  The Partnership also 
welcomes the support and participation of U.S. and Kazakhstani 
private companies and business associations. 
 
The Partnership is intended to advance the key objectives mentioned 
above and facilitate dialogue on reform through working groups, 
consisting of one or more representatives of each of the Partners, 
as well as experts from international institutions and the private 
sector.  The working groups will formulate proposals on legislation, 
policies, strategies and programs for achieving the Partnership 
objectives which will be submitted to the two Governments for 
review. 
 
In accordance with objectives of the Partnership, the Coordination 
Committee, consisting of six people, including one representative of 
each of the Partners as well as Ambassador of the Republic of 
Kazakhstan to the United States and the U.S. Ambassador in the 
Republic of Kazakhstan is to coordinate the activity of the working 
groups. 
 
At a minimum, the following working groups are to be created: 
 
(1) on issues of economic diversification and small and medium 
business development; 
(2) on securing transparency and creating conditions for efficient 
economic activity; 
(3) scientific and technical cooperation; 
(4) on issues of regional economic integration; and 
(5) on issues relevant to the reduction of corruption and the 
improvement of the investment climate. 
 
In order to maintain a permanent dialogue within the framework of 
the Partnership, the United States and Kazakhstan plan to conduct a 
Kazakhstani-American Forum on the issue of Public-Private Economic 
Partnership on a regular basis every 1-2 years. 
 
END TEXT 
 
ORDWAY

Wikileaks

08ASTANA1309, KAZAKHSTAN – BURKITBAYEV SURPRISE CHOICE AS NEW

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1309.
Reference ID Created Released Classification Origin
08ASTANA1309 2008-07-21 11:29 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO2295
PP RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHTA #1309/01 2031129
ZNY CCCCC ZZH
P 211129Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2786
INFO RUCNCIS/CIS COLLECTIVE 0567
RUCNCLS/SCA COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001309 
 
SIPDIS 
 
E.O. 12958: DECL: 07/21/2018 
TAGS: EPET PGOV EINV PINR KZ
SUBJECT: KAZAKHSTAN - BURKITBAYEV SURPRISE CHOICE AS NEW 
KMG HEAD 
 
Classified By: Pol-Econ Chief Steven H. Fagin, Reasons 1.4 (b) and (d) 
 
------- 
Summary 
------- 
 
1. (C) Serik Burkitbayev, chairman of "Samgau," replaced 
Uzakbay Karabalin as KazMunayGas president on May 29. 
Burkitbayev is a long-time government insider with a mixed 
record.  Contacts at KazMunayGas and western oil and gas 
companies called the move a surprise and saw no obvious 
explanation for the change.  At a ceremony at Tengiz on June 
5, several western oil executives said that one key issue for 
KMG will be whether First Vice President Maksat Idenov 
retains his position.  Idenov told us on July 10 that he has 
established a good relationship with Burkitbayev and is 
actively engaged.  End Summary. 
 
---------------------------------------- 
Serik Burkitbayev: An Old-School Insider 
---------------------------------------- 
 
2. (SBU) On May 29, Serik Burkitbayev, chairman of the 
"Samgau" National Science and Technology Holding Company, was 
named the new president of KazMunayGas (KMG), replacing 
Uzakbay Karabalin.   Unlike his three immediate predecessors, 
all of whom hail from western Kazakhstan's Atyrau oblast, 
Burkitbayev was born in Zhambul oblast in the south.  In 
contrast to Karaballin, Burkitbayev speaks English.  While 
his sole prior energy sector experience was his tenure as 
director of the Oil and Gas institute during 2003-2007, 
Burkitbayev has a reputation as a solid manager who quickly 
grasps the technical details of projects. 
 
3. (C) Burkitbayev has held a number of high-ranking 
positions and has at times been at the center of controversy. 
 In 1996, as president of Kazakhtelecom, Burkitbayev was 
blamed for bankrupting Kazpochtabank, at the time one of the 
biggest and most stable banks in the country, when he ordered 
all Kazakhtelekom accounts transferred to Kazcommertsbank and 
publicly declared Kazpochtabank insolvent -- a charge that 
was not true. (Comment: The move against Kazpochtabank was 
initiated by then Prime Minister Kazhegeldin, with whom 
Burkitbayev has been closely linked). 
 
4. (C) In 1997, Burkitbayev annulled Kazakhtelecom's contract 
with Deutschetelecom and sold a 40 percent share to Daewoo, 
which was a producer of telecommunications equipment, not an 
operator.  Kazakhtelecom then bought telecommunications 
equipment from Daewoo which was not compatible with local 
equipment.  In order to repay the loans necessary to purchase 
the equipment, telephone tariffs were raised.  In 1998, 
Burkitbayev misled the government by reporting 
Kazakhtelecom's expenses acquiring Daewoo equipment as Daewoo 
investments in Kazakhtelecom. 
 
5. (SBU) As Minister of Transport and Communications from 
1998-2000, Burkitbayev was accused by local newspapers of 
creating artificial obstacles to thwart potential competitors 
of Kazakhtelecom and of lobbying for two Turkish companies 
(Rumeli Telekom and Telsim Mobil) that purchased a 60 percent 
stake in the second biggest mobile network operator in 
Kazakhstan.  The owners of the Turkish companies, part of the 
so-called Uzan family, were charged with financial crimes in 
Turkey in 2005. 
 
6. (SBU) Burkitbayev has twice faced corruption 
investigations.  In 1999, the State Anti-Corruption Committee 
investigated Burkitbayev for his role in allowing a single 
private company to control all of the government's 
telecommunications services.  In 2001, the Almaty 
Prosecutor's Office investigated Burkitbayev's activities as 
president of Kazakhtelecom.  In neither instance were charges 
ultimately levied against Burkitbayev. 
 
7. (C) In 2005, the U.S. company BSI became embroiled in a 
dispute over payment for the sale of its shares in the joint 
venture Byelkamit to a group of Kazakhstani companies.  After 
an agreement was reached, the Kazakhstani purchasers 
attempted to renege on payment, while still acquiring the 
shares.  The Kazakhstani companies involved were owned by 
Burkitbayev. 
 
------------------------------ 
Oil Insiders Surprised by Move 
------------------------------ 
 
8. (C) Oil and gas executives gathered at Tengiz on June 5 
for a ceremony to mark Tengiz's second generation expansion 
expressed surprise at the KMG shake-up.  Jay Johnson, 
Managing Director of Chevron International's Eurasian Unit, 
 
ASTANA 00001309  002 OF 002 
 
 
said the move was unexpected.  He added that he hoped KMG 
First Vice President Maksat Idenov would remain in his 
position, a view echoed by several western oil 
representatives.  Steve Rose, ExxonMobil Kazakhstan General 
Manager, said that he received a letter after the change from 
Karabalin in which Karabalin wrote that he looked forward to 
continuing to work with ExxonMobil, although he did not say 
in what capacity.  (Comment: Karabalin was subsequently named 
head of MangistauMunayGaz, a company in which KMG is 
acquiring a majority share.  Idenov told us that Karabalin is &#x000A
;under investigation for corruption and may be arrested. 
Given the relationship between Idenov and Karabalin, this may 
be more wishful thinking than an accurate prediction.  End 
Comment.) 
 
9. (C) Sagyndyk Nuraliyev, BP Country Representative, saw 
Burkitbayev's appointment as a move against Timur Kulibayev. 
According to Nuraliyev, both Burkitbayev and Idenov owe their 
loyalties to President Nazarbayev, whereas Karabalin is close 
to Kulibayev.  (Comment:  Kulibayev appears firmly entrenched 
again in the inner circle.  He recently explained to the 
Ambassador that he first brought Burkitbayev in to KMG, as 
head of the Kazakhstan Oil and Gas Institute, a KMG 
subsidiary.  Kulibayev described Burkitbayev as a "good 
manager."  Burkitbayev's appointment thus does not appear to 
be a move to lessen Kulibayev's influence, but Burkitbayev is 
still viewed as the "President's Man".  Patty Graham, 
ExxonMobil General Relations and Public Affairs Director for 
Kazakhstan, told us that in a recent meeting, Kulibayev was 
unable to confirm whether Burkitbayev would be attending an 
ExxonMobil anniversary celebration in Saudi Arabia. 
According to Graham, Kulibayev has in the past been able to 
immediately answer for his closest allies.  End Comment.) 
 
10. (C) Arman Darbayev, KMG Executive Director for Oil 
Transportation and Service Projects, told us on June 11 that 
his colleagues at KMG also had not expected the change in KMG 
leadership.  Darbayev doubted the veracity of rumors that 
Karabalin will return to KMG.  Given the friction between 
Karabalin and Idenov, as long as Idenov remains KMG First 
Vice President, a Karabalin return appears to be unlikely, he 
argued. 
 
------- 
Comment 
------- 
 
11. (C) Serik Burkitbayev takes over at KMG at a crucial time 
for the company, which is on the cusp of real transformation, 
but is also stretched thin because of a number of recent 
purchases and new projects.  Given Burkitbayev's past record, 
his appointment is not cause for optimism, but he can dispel 
doubts by supporting Maksat Idenov's efforts to reform KMG. 
For his part, Idenov told us on July 10 that he has 
established a good relationship with Burkitbayev and is 
actively engaged.  End Comment. 
ORDWAY

Wikileaks

08ASTANA1288, USOSCE DCM SCOTT DISCUSSES MADRID COMMITMENTS

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1288.
Reference ID Created Released Classification Origin
08ASTANA1288 2008-07-18 11:44 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0821
PP RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1288/01 2001144
ZNR UUUUU ZZH
P 181144Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2765
INFO RUCNCIS/CIS COLLECTIVE 0565
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 001288 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI PREL ECON KZ
 
SUBJECT: USOSCE DCM SCOTT DISCUSSES MADRID COMMITMENTS 
 
1.  SUMMARY: During his June 26-30 trip to Kazakhstan, USOSCE DCM 
Kyle Scott met with government officials and opposition and civil 
society leaders to discuss Kazakhstan's Madrid commitments.  In 
meetings held after President Nazarbayev's June 29 speech, 
government officials strove to reassure DCM Scott that the promised 
legislation on elections, political parties, and media will be ready 
by the end of the year. OSCE Center in Astana also expressed 
cautious optimism that the President's speech will translate into 
direct action from the government.  Civil society leaders are less 
optimistic that the new legislation will go beyond "cosmetic 
changes."  One leading activist said democratic transition will come 
only after the ruling elite negotiate full protection for its 
economic assets.  The push to pass the new religion law seems to 
have slowed, although civil society activists and the OSCE are still 
watching the legislation closely.  END SUMMARY. 
 
2. USOSCE DCM Kyle Scott traveled to Kazakhstan June 26 - 30 to 
attend the OSCE Parliamentary Assembly (PA) as well as to gather 
information on Kazakhstan's progress on the Madrid commitments.  He 
spent two days in Almaty, where he met with leaders of civil 
society, religious groups, independent media, and opposition 
parties, and several days in Astana, where one day was devoted to 
bilateral meetings with the government. 
 
----------------------------------------- 
GOVERNMENT PROMISES PROGRESS ON MADRID... 
----------------------------------------- 
 
3. DCM Scott's bilateral meetings came directly on the heels of 
President Nazarbayev's speech at the OSCE PA in which he publicly 
discussed the Madrid commitments.  As could be expected, the 
government was eager to reassure us that the promised legislative 
changes will be ready before the end of the year.  The President's 
Internal Policy Director Erlan Karin said that the draft laws on 
election, political parties, and media were already in the works. 
He stressed that while the government bureaucracy was lagging, the 
political will was there.  According to Karin, the President's 
speech was a sign of the shift of priorities within the government. 
While it was previously "focused on stability," its new focus is 
"stability of development."  "Madrid is just the beginning," said 
Karin. 
 
4.  Similar assurances were made by the Culture and Information 
Minister Mukhtar Kul-Mukhammed and Central Election Commission (CEC) 
Chairman Kuandyk Turgankulov.  Kul-Mukhammed said the draft 
legislation on media should go to the Mazhelis in September, and 
Turgankulov expects the new election law to be ready by December. 
In answer to DCM Scott's question on Nazarbayev's promise of "at 
least a two party Parliament," Turgankolov said the new law will 
likely drop the Mazhelis threshold requirement for the 
second-highest winner to assure multi-party representation. 
 
5.  In DCM Scott's meeting with the OSCE Center in Astana, Head of 
Center Ambassador Keltchewsky and Deputy Head Jeannette Kloetzer 
both expressed cautious optimism about Kazakhstan's progress.  "The 
trend is positive," said Kloetzer.  She noted that the officials who 
were previously reluctant to "cross the line" now had the 
President's official sanction to move forward.  Keltchewsky added 
that the speech presented a unique opportunity to gain momentum on 
the Madrid commitments.  Kloetzer and Keltchewsky agreed with DCM 
Scott that the Centre faces an important job of unitizing this 
opportunity to make sure the new legislation truly upholds the 
spirit of OSCE principles. 
 
------------------------------------------- 
... BUT CIVIL SOCIETY SEES LITTLE MOVEMENT 
------------------------------------------- 
 
6. During meetings held in Almaty before Nazarbayev's speech, 
opposition party leaders shared a predictably less optimistic view 
of Kazakhstan's political scene.  CPK's Serikbolsyn Abdildin derided 
the one-party Mazhelis as a corrupt institution that simply 
rubber-stamps the government's initiatives.  Azat's Tulegen Zhukeyev 
added that the opposition parties are kept artificially weak by the 
"cynical fixing of elections," something only pressure from "the 
West" can alleviate.  NSDP's Amirzhan Kosanov struck a more 
optimistic note, saying that public demand that Kazakhstan fulfill 
its Madrid commitments should bring about positive changes.  All 
agreed that the new law on political parties will be ready on 
schedule, but worried that it will only include "cosmetic changes." 
 
 
7.  Representatives of the independent press were equally 
pessimistic on the new law on the media.  At a round-table on media 
freedom, watchdog NGO Adil Soz's Tamara Kaleyeva said that the 
proposals under consideration from the government would do little to 
change the current restrictive environment.  The biggest issues -- 
strict registration requirements for print media and criminal 
penalties for libel -- are not being addressed, she said. 
In
kar.info's journalist Sergey Duvanov and Tarzhargan Weekly's 
 
ASTANA 00001288  002 OF 002 
 
 
editor Taszhargan Bapi noted that the government's use of libel laws 
was responsible for much of the self-censorship in print media and 
television.  On the question of freedom of the internet, Duvanov 
said that opposition news websites were still being periodically 
blocked. 
 
8.  Discussing the law of elections, Republican Network of 
Independent Monitors' (RNIM) Taskyn Rakhimbekova said she doesn't 
expect much from new legislation.  Rakhimbekova's NGO monitored 25% 
of the polls during the last elections, and in her opinion, count 
irregularities were more the result of overzealousness on the part 
of local akims than defects in the election law.  The akims are 
directly appointed and do not want to jeopardize their job security, 
she said.  While a new law on elections would be progress, 
Rakhimbekova does not believe it would not bring substantial 
changes. 
 
9. Kazakhstan Bureau for Human Rights' Yevgeniy Zhovtis gave a more 
nuanced view of the situation.  Zhovtis told DCM Scott that while he 
has no doubts that the government will pass the necessary 
legislation before the end of the year, he does not expect it to 
bring any seismic shifts to the political scene.  In his opinion, 
true political reform will not take place until the ruling elite can 
successfully negotiate full protection for its economic assets. 
"How many countries have billionaires on the Presidential staff?" he 
asked, referring to Presidential Administrator Bulat Utemuratov, who 
recently made the Forbes' 2008 World's Richest People list. 
Many in Nazarbaev's circle stand to loose their fortunes if removed 
from power, explained Zhovtis, and are understandably reluctant to 
introduce any major changes to the current order.  It is his belief 
that true democratic reform will be a slow process involving careful 
negotiations within the ruling circle. (Comment: In fact, the 
appearance of Utemuratov and other Kazakhstanis on the Forbes list 
demonstrates progress toward transparency and legalization of 
assets, either through IPOs that converted assets into publicly 
traded shares or, as was the case with Utemuratov sale of assets, to 
major western companies that have conducted due diligence on their 
purchase.  The result brings these riches out of the shadow somewhat 
reduces the long-term vulnerability of their owners.  End comment.) 
 
 
--------------------------------------- 
PROMISING SIGNS ON RELIGION LEGISLATION 
--------------------------------------- 
 
10. Along with the Madrid commitments, the draft religion 
legislation was a frequent topic of DCM Scott's conversations. 
During a meeting with Helsinki Committee's Ninel Fokina and 
representatives of Jehovah's Witnesses and Hare Krishnas, Fokina 
said that while the newest version of the law is an improvement over 
the original, it still represents "significant threat to religious 
freedom." 
OSCE Almaty Liaison Office's Human Dimension Officer Eugenia Benigni 
told DCM Scott that OSCE/ODIHR continues to watch the legislation 
closely.  Her office organized several meetings between a visiting 
religious freedom expert from ODIHR and the MFA and Committee on 
Religious Affairs.  She said that the OSCE also plans to do training 
sessions on religious freedom for government officials in 
mid-September.  (Note: September is when the Mazhelis will likely 
pick up the legislation after its summer holiday.  End Note.)  OSCE 
Astana Centre's Kloetzer noted that the drive to pass the law has 
slowed, something she ascribes to the successful intervention from 
the NGOs and international community.  President Administration's 
Karin cautiously let us know that the support for the law was 
lessening.  Careful to underline that the final decision will come 
from the Mazhelis, he said that the Administration had "several 
conversations with [Mazhelis] members" on potential issues with the 
new legislation.  According to Karin, Kazakhstan's "two main 
religious groups" -- presumably Muslims and Orthodox Christians -- 
were also beginning to have second thoughts about the law. 
 
11. COMMENT:  It is clear that the President's speech gave the 
government a green light on the Madrid commitments. The government 
will likely produce the "Madrid" legislation before the end of the 
year.  Whether it will be the "new beginning" that Karin promises, 
or the "cosmetic changes" that civil society predicts, remains to be 
seen. 
 
DCM Scott did not have a chance to clear this cable. 
 
ORDWAY

Wikileaks

08ASTANA1286, KAZAKHSTAN SHARES INFORMATION ON POSSIBLE

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1286.
Reference ID Created Released Classification Origin
08ASTANA1286 2008-07-18 10:01 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0003
PP RUEHWEB

DE RUEHTA #1286 2001001
ZNY SSSSS ZZH
P 181001Z JUL 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC PRIORITY 2763

S E C R E T ASTANA 001286 
 
SIPDIS 
 
DEPARTMENT FOR EUR, ISN, SCA, T 
 
E.O. 12958: DECL: 07/18/2016 
TAGS: PARM PREL MNUC KN KZ
SUBJECT: KAZAKHSTAN SHARES INFORMATION ON POSSIBLE 
PROLIFERATION CONCERN 
 
Classified By: DCM Kevin Milas for reasons 1.4 b and d 
 
(S)  On July 15, MFA's Americas Department Head Talgat Kaliev 
passed us an overflight clearance request submitted to the 
GOK from North Korea's official flag carrier Air Koryo.  The 
request is for an Air Koryo IL-62 aircraft to travel on 
charter pax flight from Pyongyang International Airport 
(listed by its civil aviation identifier code 0III) to Tehran 
Mehrabad International Airport (listed by code ZKPY).  The 
flight leaves North Korea on July 28 and returns July 31. 
The request was filed by Dubai-based United Aviation Services 
(UAS).  (Comment: UAS is a flight operations company that 
frequently acts as an intermediary for diplomatic overflight 
and landing clearances. End comment.)  Kaliev told us that 
Kazakhstan will likely deny the overflight clearance, just as 
it denied the clearance, on our request, to a North Korea - 
Syria flight in April (reftel). 
ORDWAY

Wikileaks

08ASTANA1283, KAZAKHSTAN STILL MULLING IAEA MESA SEAT

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1283.
Reference ID Created Released Classification Origin
08ASTANA1283 2008-07-18 02:46 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0000
OO RUEHWEB

DE RUEHTA #1283 2000246
ZNY SSSSS ZZH
O 180246Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2761
INFO RUEHAM/AMEMBASSY AMMAN IMMEDIATE 0034
RUEHGB/AMEMBASSY BAGHDAD IMMEDIATE 0035
RUEHLB/AMEMBASSY BEIRUT IMMEDIATE 0010
RUEHEG/AMEMBASSY CAIRO IMMEDIATE 0084
RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 0073
RUEHDM/AMEMBASSY DAMASCUS IMMEDIATE 0038
RUEHLO/AMEMBASSY LONDON IMMEDIATE 0516
RUEHOT/AMEMBASSY OTTAWA IMMEDIATE 0001
RUEHFR/AMEMBASSY PARIS IMMEDIATE 0240
RUEHRH/AMEMBASSY RIYADH IMMEDIATE 0158
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 0762
RUEHUNV/USMISSION UNVIE VIENNA IMMEDIATE 0058

S E C R E T ASTANA 001283 
 
SIPDIS 
 
E.O. 12958: DECL: 07/17/2018 
TAGS: PREL KNNP IAEA AORC SY KZ
SUBJECT: KAZAKHSTAN STILL MULLING IAEA MESA SEAT 
 
REF: STATE 76033 
 
Classified By: DCM Kevin Milas for reasons 1.4 (b) and (d) 
 
1. (S)  On July 17, DCM delivered reftel points to Deputy 
Foreign Minister for Multilateral Affairs Nurlan Danenov and 
Director of Multilateral Affairs Office Balibai Sadikov.  He 
stressed the high-level of commitment by the USG to this 
issue and our willingness to engage at the highest levels, if 
necessary.  He also mentioned Kazakhstan's self-imposed July 
20 deadline. He underscored that the longer the Syrians had 
to advance their candidacy, the more difficult it will be to 
turn around.  Finally, he added that we believe that support 
for Syria was soft, and if Kazakhstan advanced its candidacy, 
some countries that have already committed to Syria might be 
inclined to support Kazakhstan. 
 
2.  (S)  Mr. Dudenov said the GOK was seriously considering 
putting itself forward, but that the final decision would not 
be reached "for a few days."  He noted Kazakhstan's expanding 
involvement in multilateral organizations and said the IAEA 
Board of governors would be the logical next step, but 
stressed that the GOK still needed time to explore the 
support it has within the MESA group.  He thanked us for the 
offer to work on Kazakhstan's behalf, saying KZ would 
certainly let us know should help be needed.  Dudenov said 
that it would be hard to reach Foreign Minister Tazhin (who's 
on leave), but that he will do his utmost to get in touch 
with him and pass our message.  Director of Multi-lateral 
Affairs Sadikov asked for our assessment of the positions of 
Iraq, Saudi Arabia, and Egypt.  In a subsequent follow up 
phone call, Sadikov repeated this request, and further asked 
for the U.S. position on Kazakhstan's entry into the Missile 
Technology Control Regime (MTCR).  DCM replied he would ask 
Washington for responses on both issues.  Also, in the course 
of the conversation, Dudenov gently raised the Common World 
Forum (to be hosted in Astana in October) and said Kazakhstan 
was hoping for high-level participation from the U.S. 
 
3.  (S)  COMMENT: In asking about the MTCR and the Common 
World form, Kazakhstan is not attaching any conditions or 
asking for a tit-for-tat on their candidacy for the IAEA BOG. 
 Nonetheless, it was clear that positive U.S. actions in 
these areas would be seen as a sign of mutual support between 
the United States and Kazakhstan.  END COMMENT 
ORDWAY

Wikileaks

08ASTANA1282, KAZAKHSTAN STILL CONSIDERING REQUEST ON UNIVERSAL

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1282.
Reference ID Created Released Classification Origin
08ASTANA1282 2008-07-18 02:43 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXYZ0000
RR RUEHWEB

DE RUEHTA #1282 2000243
ZNR UUUUU ZZH
R 180243Z JUL 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 2760

UNCLAS ASTANA 001282 
 
SIPDIS 
 
DEPT FOR IO/T - CHRIS WOOD 
 
E.O. 12958: N/A 
TAGS: AORC ECON ETRD WTRO KZ
SUBJECT: KAZAKHSTAN STILL CONSIDERING REQUEST ON UNIVERSAL 
POSTAL UNION 
 
REF: STATE 66814 
 
(U) We delivered reftel points and accompanying diplomatic 
note to MFA's Director of International Organizations 
Department Asel Utegenova on July 7.  Ms. Utegenova agreed to 
pass our message on to the Ministry of Economy and Trade. 
She said the MFA could not give us an immediate response 
since the GOK position would have to be coordinated with 
other agencies.  In a follow-up conversation on July 16, Ms. 
Utegenova said the GOK was still working on a response, but 
promised to update us as soon as possible. 
ORDWAY

Wikileaks

08ASTANA1279, KAZAKHSTAN – ASTANA CELEBRATES 10TH ANNIVERSARY IN GRAND

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1279.
Reference ID Created Released Classification Origin
08ASTANA1279 2008-07-17 01:57 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9323
PP RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1279/01 1990157
ZNR UUUUU ZZH
P 170157Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2755
INFO RUCNCIS/CIS COLLECTIVE 0562
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 03 ASTANA 001279 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI PREL ECON KZ
 
SUBJECT: KAZAKHSTAN - ASTANA CELEBRATES 10TH ANNIVERSARY IN GRAND 
STYLE 
 
------- 
SUMMARY 
------- 
 
1. (SBU) Astana celebrated its 10th anniversary as Kazakhstan's 
capital on July 6.  The jubilee consisted of a week of events, 
ranging from monument dedications and gala concerts to an official 
anniversary ceremony attended by nine foreign heads of state, 
including Russian President Medvedev.  The government appeared to 
spare no expense in preparing Astana for the anniversary -- with 
work continuing around the clock in recent months to pave roads, 
finish off key construction projects, and bedeck the city with 
festive billboards and placards.  In his speech at the official 
ceremony, President Nazarbayev justified his decision to move the 
capital to Astana as in Kazakhstan's "strategic interests."  The 
glitzy city has become a point of genuine pride for a sizeable 
portion of the population.  End Summary. 
 
----------------- 
GRAND CELEBRATION 
----------------- 
 
2. (SBU) Astana celebrated its 10th anniversary as Kazakhstan's 
capital in grand style.  Astana's "birthday" is officially July 6 -- 
moved from a date in early June several years ago to improve the 
chances for good weather and to coincide with President Nazarbayev's 
birthday -- but the 10th anniversary events extended a whole week, 
from June 30 through July 7.  (Note: Elsewhere in Kazakhstan the 
celebration actually began earlier, with events scheduled on a 
rolling basis in the country's oblast centers.  End Note.)  The 
beginning of the festivities overlapped with the annual meeting of 
the OSCE Parliamentary Assembly, which Astana hosted from June 28 to 
July 3.  Immediately before going out of session for the summer, 
parliament passed legislation making the "Day of the Capital" a 
permanent national holiday -- and thus a day off from work. 
 
3. (SBU) The domestic credit crunch resulting from the global 
financial crisis had stalled many of Astana's key construction 
projects since last year.  Beginning in the spring, however, the 
government embarked on a crash effort to complete as many as 
possible for the 10th anniversary.  Remarkable progress was made in 
a short period, though some notable projects did not get finished in 
time -- including a new bridge spanning the city's Ishim River, a 
massive new concert hall (the "Palace of Independence") around the 
corner from the Embassy, and a domed sports stadium.  (Note: The 
official 10th anniversary ceremony with foreign heads of states in 
attendance could thus not be conducted in the concert hall, as 
planned, but rather had to be moved across the street to Astana's 
"Peace and Reconciliation" pyramid.  However, a gala jubilee concert 
was nevertheless staged in the unfinished stadium, amid exposed 
rafters and girders.  End Note.)  In the run up to the celebration, 
the government also repaved Astana's major streets -- many 
simultaneously, causing major traffic snarls for weeks -- and 
repaired sidewalks all over town.  An army of several thousand 
laborers, many seemingly migrants from Uzbekistan and Kyrgyzstan, 
was mobilized for the work.  Almost overnight, more than a dozen new 
monuments were erected around the capital, each one a "gift" from 
one of Kazakhstan's oblasts.  The monuments were unveiled and 
dedicated during the 10th anniversary festivities. 
 
----------------------- 
"FROM ASTANA WITH LOVE" 
----------------------- 
 
4. (SBU) The government also designed an attractive "Astana 10" logo 
and branded the celebration with a motto -- "From Astana with Love." 
 Virtually every single billboard in Astana, thousands of lampposts, 
and the corrugated metal walls surrounding hundreds of construction 
sites were festooned with giant placards, banners, and posters 
bearing the logo, motto (in Kazakh, Russian, and English, in 
Nazarbayev's own handwriting), and other graphic designs created for 
the jubilee.   The logo also made its way onto pins, tee shirts, 
baseball caps, and knapsacks -- and was painted on buses all over 
the country.  Astana city authorities set up a trilingual website -- 
www.astana10.com -- to publicize the celebration.  The site includes 
a glitzy ad-agency style webpage entitled "celebration concept," 
which lists such "aims" for the anniversary event as "the 
positioning of the first president of the Republic of Kazakhstan as 
a leader of world-scale" and "confirmation of the correctness of the 
decision to move the capital." 
 
------------------------------------------ 
THIRTY-TWO CRITERIA FOR MOVING THE CAPITAL 
------------------------------------------ 
 
5. (SBU) The key 10th anniversary events took place over the July 
5-6 weekend.  On those days, the streets of Astana's cavernous 
government quarter were full as perhaps never before -- with a 
notably large number of Kazakh speakers, an indication that 
 
ASTANA 00001279  002 OF 003 
 
 
thousands traveled or were bused in to the city from the provinces. 
Nine foreign heads of state -- Russian President Medvedev (making 
his second trip to Astana since taking o
ffice), Turkish President 
Gul, Georgia's Saakashvili, Armenia's Sargsyan, Azerbaijan's Aliyev, 
Kyrgyzstan's Bakiyev, Tajikistan's Rakhmon, Turkmenistan's 
Berdymukhamedov, and Jordan's King Abdullah -- attended the official 
10th anniversary ceremony on July 5, a VIP event that included 
several hours of speeches.  In his own address, Nazarbayev justified 
the transfer of the capital to Astana as having been compelled by 
the "strategic interests of the nation."  He claimed that 32 
criteria had been taken into account in selecting the location of 
the new capital, including socio-economic indicators, the 
environment, labor resources, transport infrastructure, and -- oddly 
enough, given the ultimate choice of sub-Siberian Astana -- climate. 
 Describing nine ways in which Astana had fundamentally changed the 
life of the country, Nazarbayev contended that moving the capital 
there had "completed the process the constructing Kazakhstan's new 
statehood," created social mobility, and facilitated the revival of 
a "governing elite."  Astana, he argued, had significantly grown in 
international significance, and was a clear example of innovative 
architecture and of the nation's success. 
 
----------------------- 
"FROM MOSCOW WITH LOVE" 
----------------------- 
 
6. (SBU) On the evening of July 5, Astana hosted a spectacular 
five-hour "From Moscow with Love" concert, a gift from Moscow mayor 
Yuriy Luzhkov, who flew in a number of big-name performers for the 
event, from the aging Latvian pop star Laima Vaikule to the ageless 
Russian crooner Iosif Kobzon.  Dima Bilan, the 2008 Eurovision Song 
Contest winner, was the finale act. Luzhkov himself was invited to 
Astana for the 10th anniversary festivities together with another 
100 or so big city mayors.  A session of the International Forum of 
Capitals and Large Cities was held on the margins of the jubilee. 
 
 
------------------- 
"ASTANA - MY HEART" 
------------------- 
 
7. (SBU) On July 6, Nazarbayev participated in the dedication of the 
Kazakh Yeli ("Kazakh nation") monument, a 91-meter tall obelisk 
positioned in front of the Palace of Independence (see para 3 above) 
-- with its height symbolizing 1991, the year Kazakhstan gained its 
statehood.  That evening, Nazarbayev hosted a private dinner for 
senior government officials, other Kazakhstani elites, and foreign 
ambassadors.  Nazarbayev sat at the head table, together with his 
closest political confidants -- including Senate chairman Tokayev, 
Astana mayor Tasmagambetov, Nur Otan Party deputy chairman 
Dzhaksybekov, and Astana Musical Academy rector Ayman 
Mukhahodzhayeva.  Also at the head table were wife Sara and daughter 
Dariga.  In remarks to those present, after describing the 
contributions of the various categories of guests (ministers, 
regional governors, Presidential Administration, intelligentsia and 
the diplomatic corps) Nazarbayev praised his wife in glowing terms 
-- an unexpected gesture given that she had appeared to be sidelined 
in recent years.  Ukrainian pop star Sofia Rotary performed at the 
dinner and enticed Nazarbayev onto the dance floor. 
 
8. (SBU) After the dinner, Nazarbayev attended a gala VIP show, 
"Astana - My Heart," staged in an amphitheater in front of Astana's 
"White House" and broadcast live on national television.  This show 
was dominated by Kazakh folk and pop performers, though Sofia Rotary 
proved to be the crowd pleaser and American star Whitney Houston 
sang several numbers as the closing act -- which was following by a 
thundering fireworks display. 
 
-------------------------- 
VICTORY ON THE GOLF COURSE 
-------------------------- 
 
9. (SBU) The Astana jubilee would not have been complete without 
sports activities.  An enthusiastic tennis fan, Nazarbayev, 
accompanied by Cypriot tennis star Marcos Baghdatis, opened up a 
modern new Astana tennis center, where international tournaments 
will be played.  Nazarbayev also played in a golf tournament at 
Astana's sole golf club (riding around the course in a miniaturized 
Cadillac Escalade golf-cart).  Other tournament participants 
included senior government officials, business leaders, and 
representatives of the diplomatic community.  Players were paired up 
into two-man teams.  One Embassy Astana staffer -- a former golf pro 
-- was paired with Minister of Industry and Trade Vladimir Shkolnik. 
 Though no scores were released, he and Shkolnik were declared to 
have come in second place.  The crowd applauded wildly when 
Nazarbayev and his partner were announced to be the winners. 
 
------- 
COMMENT 
 
ASTANA 00001279  003 OF 003 
 
 
------- 
 
10. (SBU) Love it or hate it, Astana has made great strides in just 
a few short years.  Its rapid transformation from sleepy, remote, 
provincial city to gleaming national capital is the most remarkable 
development in the country's post-independence period, topping even 
the discovery and exploitation of Kazakhstan's vast Caspian crude 
reserves.  Though many Kazakhstanis -- notably the Almaty elite -- 
still deeply resent the transfer of the capital and the money spent 
moving it ($7 billion thus far, according to Nazarbayev himself), 
Astana is a point of pride for millions of the country's citizens. 
It may very well prove to be President Nazarbayev's most lasting 
legacy -- a futuristic steel, concrete, and glass "monument" that 
endures and perhaps even thrives well beyond the date when 
Kazakhstan's hydrocarbon resources are fully exhausted.  End 
Comment. 
 
Pictures of the event can be found on the Embassy's site at 
 
http://kazakhstan.usembassy.gov/news07062008. html 
 
ORDWAY

Wikileaks

08ASTANA1271, SCENESETTER FOR SPECIAL ENVOY BOYDEN GRAY’S JULY 22-23

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1271.
Reference ID Created Released Classification Origin
08ASTANA1271 2008-07-16 04:37 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7845
PP RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1271/01 1980437
ZNR UUUUU ZZH
P 160437Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHBS/USEU BRUSSELS PRIORITY
INFO RUEHC/SECSTATE WASHDC PRIORITY 2751
RUCNCIS/CIS COLLECTIVE 0559
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 03 ASTANA 001271 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EPET ECON PGOV PREL KZ
 
SUBJECT: SCENESETTER FOR SPECIAL ENVOY BOYDEN GRAY'S JULY 22-23 
VISIT TO KAZAKHSTAN 
 
------- 
Summary 
------- 
 
1. (SBU) Your visit to Astana will acquaint you more intimately with 
the dynamic developments in Kazakhstan's energy sector.  U.S. and 
Kazakhstani strategic interests are essentially aligned regarding 
Kazakhstan's vast energy resources.  The Kazakhstanis agree with us 
that U.S. and Western companies must continue to play a leading role 
in Kazakhstan's energy exploration and development.  The 
Kazakhstanis also recognize that expanding and diversifying 
transport routes will best enable them to capture the maximum 
benefits of their energy wealth.  Kazakhstan's importance as an 
energy supplier is poised to grow dramatically in the coming years 
as new projects, notably the Kashagan field, commence production and 
existing ones expand.  Crude is the focus for now, with much of the 
available natural gas reinjected to maximize crude output.  With the 
January signing of an MOU on revised terms for the Kashagan 
contract, Kazakhstan and the international oil companies are seeking 
to further enhance their cooperation.  Kazakhstan's growing success 
on the upstream side is leading to greater attention to keeping the 
mid-stream on track, i.e., to ensuring adequate transport routes for 
bringing increased volumes to market.  Near-term crude production 
increases are likely to flow by rail through Russia, by tanker 
across the Caspian to Baku, and through the CPC pipeline, should it 
be expanded.  A trans-Caspian oil pipeline would appear to be the 
most attractive option to handle later production increases. 
Privately, the Kazakhstanis agree and have quietly begun planning. 
However, the public line continues to call for an agreement on 
delimiting the Caspian before constructing such a pipeline.  End 
Summary. 
 
------------------------ 
An Emerging Energy Power 
------------------------ 
 
2. (SBU) Kazakhstan exported just over 60 million tons of crude oil 
in 2007 and is expected to be one of the world's top ten oil 
producers soon after 2015.  The country also has significant natural 
gas reserves -- 1.8 trillion cubic meters is a low-end estimate -- 
but for now, natural gas exports are relatively small, just 10.2 
billion cubic meters in 2007, in large part because gas is being 
reinjected to maximize crude output.  U.S. companies have 
significant ownership stakes in Kazakhstan's three largest oil and 
gas projects:  Kashagan, Tengiz, and Karachaganak. 
 
3. (SBU) Kashagan was the largest oil field discovery since Alaska's 
North Slope and is perhaps the world's most technically complex oil 
development project.  In January, the Kazakhstani government and the 
Kashagan consortium's international partners signed an MOU on 
revised terms for the Kashagan contract, which include a new 
operatorship model, up to $5 billion in financial compensation to 
Kazakhstan for several years of production delays and significant 
cost overruns, and an increased ownership stake and management role 
for Kazakhstan's state oil and gas company, KazMunaiGas (KMG). 
Under the new terms, ExxonMobil, Shell, and Total are expected to be 
co-operators, each with a specific area of responsibility.  The role 
of Eni, the original sole operator, is being dramatically reduced; 
it will complete phase one development and perhaps manage phase two 
onshore activity.   Efforts to turn the January MOU into a detailed, 
formal agreement have not yet succeeded, though in June additional 
MOUs were signed postponing first crude production from 2011 to 
2013, and reconfirming a fixed tax regime for the project.  In any 
event, the January deal appears to have paved the way for further 
cooperation between Kazakhstan and the international oil companies 
on new projects, with ExxonMobil, ConocoPhillips, and Chevron all 
bullish about their prospects.   Kashagan's current equity 
stakeholders are as follows:  KMG (16.81%), ExxonMobil (16.66%), 
Shell (16.66%), Total (16.66%), Eni (16.66%), ConocoPhillips 
(8.28%), and Inpex (Japan) (8.28%). 
 
4. (SBU) Tengiz -- with a 50% Chevron stake, 25% ExxonMobil, 20% 
KMG, and 5% LukArco - is the world's deepest operating "super-giant" 
oil field, with the top of the reservoir at about 12,000 feet deep. 
  With the project's second generation expansion coming on line, 
crude production at Tengiz is increasing this year from 400,000 
barrels per day to 540,000.  A "future growth option" could increase 
production by an additional 60 percent by 2015.  The Tengiz project 
is reportedly Chevron's most valuable asset worldwide -- worth $24 
billion to the company and yielding $2.7 billion in profit for 
Chevron in 2007.   The Tengiz consortium is currently fighting a 
$300 million environmental fine levied for on-site storage of 
several million tons of sulfur.  The consortium maintains that it 
received all the proper permits for sulfur production, and that no 
permits are necessary -- or available -- for continued sulfur 
storage.  A meeting between Chevron CEO Dave O'Reilly and President 
Nazarbayev in June apparently produced an acce
ptable compromise on 
the fines.  With sulfur prices at record levels, Tengiz is storing 
 
ASTANA 00001271  002 OF 003 
 
 
$4-6 billions worth of sulfur.  Sulfur sales in the first quarter of 
2008 netted $120 million, and the stockpile is now being reduced. 
The major bottleneck is rail transportation capacity. 
 
5. (SBU) Karachaganak (with a 32.5% BP Group stake, 32.5% Eni, 20% 
Chevron, and 15% Lukoil) is one of the world's largest oil and gas 
condensate fields.  Karachaganak produced 10.4 million tons of oil 
and 12 bcm of gas in 2007. 
 
------------------------- 
Bringing Energy to Market 
------------------------- 
 
6. (SBU) With major production increases on the horizon, Kazakhstan 
must develop additional transport routes to bring its crude to 
market.  Currently, the bulk of Kazakhstan's oil is exported via 
Russia, including through the Transneft system and the 
independently-owned Caspian Pipeline Consortium (CPC) pipeline, in 
which Chevron holds a 15% interest.  Near-term crude production 
increases are likely to flow by rail through Russia, by tanker 
across the Caspian Sea to Baku, and through the CPC pipeline, should 
an agreement be reached with Russia on CPC expansion.  The 
Kazakhstani government is focusing its efforts on the 
Kazakhstan-Caspian Transportation System (KCTS), which envisions a 
pipeline (Eskene-Kuryk) moving crude to Kazakhstan's Caspian coast, 
from where it will be transported by a "virtual pipeline" of tankers 
to Baku.  Using large tankers, it might be possible for KCTS to move 
up to 1.8 million barrels per day.  Kazakhstan and Azerbaijan signed 
a general Inter-Governmental Agreement on KCTS in August 2007, but 
the two sides have not yet reached agreement on a more detailed 
document, with the Kazakhstanis claiming that Azerbaijan is 
slow-rolling the process. 
 
7. (SBU) A trans-Caspian oil pipeline would appear to be the most 
attractive option to handle production increases expected in the 
longer-term.  Kazakhstani officials agree in private, but in public 
maintain that an agreement on delimitation of the Caspian Sea among 
the five Caspian littoral states is a prerequisite - at least 
politically, if not legally -- for moving forward on such a 
pipeline.  That said, KMG has set up a division to develop 
trans-Caspian pipeline options, purportedly providing $20 million in 
funding for its work. 
 
8. (SBU) Moving increased volumes of Kazakhstani oil from Baku 
onward will also be a challenge.  It will require expansion of 
existing pipelines or construction of new ones that run through 
Georgia, such as Baku-Tbilisi-Ceyhan (BTC) and pipelines to the 
Batumi and Supsa on the Black Sea coast. 
 
--- 
Gas 
--- 
 
9. (SBU) All indications are that Kazakhstani will only have limited 
gas for export over the short- and mid-run.  Over 90 percent of 
Kazakhstan's current gas exports flow through Russia, though the 
country hopes to export 5 bcm annually to China beginning next year. 
 While the Kazakhstani government appears to favor increased gas 
production, the economics -- together with the geological realities 
-- argue for reinjecting most gas for now in order to maximize crude 
production.  Tengiz last year produced just 4 bcm of gas, with 2.3 
bcm used for domestic consumption and the rest sold to Russia; its 
second generation expansion this year will result in a production 
increase, but to just 7 bcm.  Kashagan will also principally 
reinject once it comes on line.  These low volumes raise doubts 
about the economic viability of, for example, building even a small 
gas pipeline to Turkmenistan that would link up with a trans-Caspian 
gas pipeline.  (One alternative might be swap arrangements that used 
Kazakhstani gas to satisfy Turkmen commitments to Russia, thus 
freeing up additional Turkmen volumes to move across the Caspian.) 
 
------------------------------------------- 
Welcoming to Investment, But More Assertive 
------------------------------------------- 
 
10. (SBU) Both the Kazakhstani government and the international 
companies are committed to an enduring relationship, and Kazakhstan 
continues to welcome foreign investment in energy exploration and 
production.  Nonetheless, the country has grown increasingly 
assertive in its energy sector in recent years. Kazakhstan pushed 
hard to renegotiate the existing Kashagan contract (alleging 
contract violations by the consortium), seeking much more onerous 
terms with prospective investors, and aggressively pursuing 
environmental and tax claims against international oil companies. 
(See para 5 above for details on the Tengiz consortium's 
environmental fine.)  In October 2007, President Nazarbayev signed 
legislation which gives the government the right to terminate a 
subsoil use contact if it determines that a company's actions 
 
ASTANA 00001271  003 OF 003 
 
 
violate Kazakhstan's national economic security interests. 
Nazarbayev has stressed publicly that the legislation would be not 
be applied retroactively, against contracts that already existed 
when the legislation went into effect.  The Kazakhstani government 
this May introduced an export duty on crude oil and oil products; 
however, Kashagan, Tengiz, and Karachaganak are exempt from the 
duty, as their contracts specify a fixed tax regime.  The Prime 
Minister has told the Ambassador repeatedly in private that these 
three contracts will have to be ratified by the Parliament in order 
to retain their stabilized tax regimes. 
 
----------- 
KazMunaiGas 
----------- 
 
11. (SBU) KazMunaiGas (KMG), Kazakhstan's state oil and gas company, 
is a vertically-integrated concern with over 30,000 employees and 25 
subsidiaries responsible for exploration, extraction, processing, 
transportation, and sales.  KMG is responsible for 16% of 
Kazakhstan's crude production and 65% of the country's oil 
transport.  It also controls 30% of Kazakhstan's crude refining 
capacity and 100% of its gas trunk pipelines.  In 2007, KMG became 
the sole owner of Georgia's Batumi oil terminal and purchased a 
controlling stake in Rompetrol, which owns two refineries in Romania 
and several hundred gas stations throughout Europe.  These 
acquisitions are important elements in Kazakhstan's efforts to 
diversify transport routes and should facilitate movement of 
Kazakhstani oil from the Black Sea onward.  KMG First Vice President 
Maksat Idenov has ambitious plans for restructuring KMG and 
implementing administrative reforms that would make the company more 
manageable, streamlined, and transparent.  In May, KMG President 
Uzakbai Karabalin, who had apparently tried to oust Idenov, was 
dismissed from his post.  Karabalin was replaced by Serik 
Burkitbayev -- a surprise candidate who during 2003-07 headed 
Kazakhstan's Oil and Gas Institute, an engineering, research, and 
design organization. 
 
ORDWAY

Wikileaks

08ASTANA1263, EXBS KAZAKHSTAN ADVISOR’S MONTHLY REPORTING CABLE (JUNE

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1263.
Reference ID Created Released Classification Origin
08ASTANA1263 2008-07-15 02:23 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6877
RR RUEHAST
DE RUEHTA #1263/01 1970223
ZNR UUUUU ZZH
R 150223Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2745
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSJGA/COMDT COGARD WASHINGTON DC
RUEKJCS/SECDEF WASHDC 0111
RUEKJCS/JCS WASHDC 0051
RUCQAAA/USCINCCENT MACDILL AFB FL
RUEHRL/AMEMBASSY BERLIN 0477
RUEHEK/AMEMBASSY BISHKEK 8301
RUEHNT/AMEMBASSY TASHKENT 8174
RUEHKB/AMEMBASSY BAKU 0050
RUEHDBU/AMEMBASSY DUSHANBE 2373
RUEHAH/AMEMBASSY ASHGABAT 7336
RUEHAST/USOFFICE ALMATY 0565

UNCLAS SECTION 01 OF 02 ASTANA 001263 
 
SIPDIS 
 
DEPT FOR ISN/ECC YWONG, ACHURCH, JHARTSHORN, SROBINSON 
DEPT FOR ISN/ECC-AMT LSPRINGER 
DEPT FOR EUR/ACE DFISCHER 
DEPT FOR SCA/RA JSPILSBURY 
DEPT FOR SCA/CEN MO'MARA 
CBP/INA FOR SBAKER AND BPICKETT 
USDOE/NNSA CWALKER, TPERRY AND EDESCHLER 
DOC FOR DCREED 
USCG FOR SHABETIMICHAEL 
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 (JUNE 
2008) 
 
I. BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY MANAGERS: 
 
1. On June 23, 2008, the Department of Energy's National Nuclear 
Security Administration (NNSA), in cooperation with the Kazakhstan 
Customs Control Committee, commissioned the first eight sites 
outfitted with radiation detection equipment completed under a joint 
project.  The radiation detection systems will help detect the 
illicit smuggling of nuclear and radiological materials passing 
through Kazakhstan's borders and were installed at seven crossing 
points and at one training facility.  Since 2006, NNSA's Second Line 
of Defense (SLD) program has worked with the Kazakhstan Customs 
Control Committee to identify sites and install radiation detection 
equipment to improve Kazakhstan's overall radiation detection 
capabilities.  The completion of the first group of eight sites 
represents the accomplishment of the first major milestone to be 
achieved under the joint project. 
 
2.  Kazakhstani President Nursultan Nazarbayev has signed into law a 
bill on the ratification of the International Convention for the 
Suppression of Acts of Nuclear Terrorism.  Kazakhstan took over two 
years to ratify the convention, which was signed in New York on 
September 14, 2005. 
 
3.  On June 29, 2008, in Astana, Kazakhstan, at the 17th  session of 
the Parliamentary Assembly of the Organization for Security and 
Co-Operation in Europe (OSCE), Kazakhstan President Nursultan 
Nazarbayev stated in an address that he believes that the Nuclear 
Non-Proliferation Treaty is asymmetrical, imposes sanctions only on 
non-nuclear states, and does not induce members of the nuclear club 
to reduce their nuclear arsenals. 
 
4.  On June 6, 2008, under the auspices of the Global Initiative to 
Combat Nuclear Terrorism, Kazakhstan conducted an 
operational-tactical exercise "Atom Anti-Terror - 2008" in Almaty, 
Kazakhstan. This exercise was targeted to improve interaction 
between the state bodies of Kazakhstan in order to prevent and 
localize any possible terrorist threat against the Nuclear Physics 
Institute. 
 
II. COMPLETED ACTIONS FOR THE REPORTING PERIOD 
 
A. SITE ASSESSMENTS AND MEETINGS CONDUCTED 
 
1.  From June 10-12, 2008 the EXBS Kazakhstan team attended the 2008 
EXBS Advisor Conference in Washington, DC. 
 
2. On June 30, 2008, the EXBS Program Coordinator contacted Mr. 
Savelyev, Head of International Security Office of the Ministry of 
Foreign Affairs, requesting the Kazakhstani government's 
participation in the Export Control Forum to be conducted in Zagreb, 
Croatia, from September 29 to October 1, 2008. During this meeting, 
Mr. Savelyev indicated that the Government of Kazakhstan would send 
a delegation to this forum upon receiving an invitation letter from 
the U.S. Department of State. 
 
B. TRAINING DURING THE REPORTING PERIOD 
 
1. None. 
 
C. EQUIPMENT DELIVERED DURING THE REPORTING PERIOD 
 
1.  EXBS delivered hydraulic filters, fuel/water separators, and 
$5,000 worth of fuel to the Maritime Border Guards in Bautino, 
Kazakhstan in preparation for the SAFE Boat Operations Course to be 
conducted in Bautino, Kazakhstan, from July 8 to July 25, 2008. 
 
 
ASTANA 00001263  002 OF 002 
 
 
D. IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 
 
1.  None. 
 
E. SIGNIFICANT DEVELOPMENTS IN EXPORT CONTROLS, NONPROLIFERATION, OR 
RELATED BORDER SECURITY 
 
1.  None 
 
F. CASPIAN SECURITY INFORMATION 
 
1. The EXBS teams in Baku and Astana continue to coordinate 
activities related to preparation for the SAFE Boat Operations 
Course to be conducted in Bautino, Kazakhstan from July 8 to July 
25, 2008. 
 
III. RED FLAG ISSUES. 
 
1. None &#x
000A; 
ORDWAY

Wikileaks

08ASTANA1246, KAZAKHSTAN: MEDIA REPORTS ON HUMAN TRAFFICKING CASES FROM

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1246.
Reference ID Created Released Classification Origin
08ASTANA1246 2008-07-11 03:34 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO4323
PP RUEHAST RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHTA #1246/01 1930334
ZNR UUUUU ZZH
P 110334Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2739
INFO RUCNCLS/SCA COLLECTIVE
RUEHAST/USOFFICE ALMATY 0549

UNCLAS SECTION 01 OF 03 ASTANA 001246 
 
STATE FOR INL/AAE, G/TIP, SCA/CEN (O'MARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SOCI KCRM PREL UZ KZ
SUBJECT: KAZAKHSTAN: MEDIA REPORTS ON HUMAN TRAFFICKING CASES FROM 
FEBRUARY TO JUNE 
 
ASTANA 00001246  001.2 OF 003 
 
 
1.  The following is a summary of human trafficking cases reported 
in local newspapers from February to June 2008. 
 
--------------------------- 
UZBEKISTANIS IN KAZAKHSTAN 
--------------------------- 
 
2. March 14, Interfax: Uzbekistani and Kazakhstani police jointly 
dismantled an organized smuggling ring illegally bringing Uzbeks to 
Kazakhstan. A group of 15 to 20 workers were transported from 
Karakalpakistan in northwest Uzbekistan to Kazakhstan to work in 
construction and agriculture.  Traffickers arranged illegal border 
crossings for the workers, took their passports, and paid them no 
salary. Interfax reported that, in the last three years, police in 
Uzbekistan received over 1,000 reports of human trafficking and 
conducted 700 investigations. 
 
3. May 23, Express-K: Police detained an Uzbekistani from Mangystau 
who organized a brothel in Aktau. The 26-year-old madam recruited 
her girls from Uzbekistan to work in Aktau as waitresses. Upon 
arrival in Aktau, the girls' passports were taken and they were 
forced to prostitute themselves. The investigation is continuing and 
a criminal case will be initiated. 
 
4. June 4, Vremya: Fifteen citizens of Uzbekistan and Tajikistan 
from 16 to 45 years old were rescued by police from a 
meat-processing plant in Aman-Karagai near Kostanai, where they were 
held by a businessman from Atyrau. The workers were not paid and 
those who wanted to leave were charged $300.  A relative of four of 
the workers was asked to pay $600 for their release and went to the 
police, which set up a sting operation and arrested the businessmen. 
There was evidence that the victims were regularly beaten. The 
investigation is ongoing. 
 
5. June 10, Argumenti & Facti (AiF): After the death of her husband, 
a pregnant woman came from Uzbekistan with two children to find 
employment. At the border she was offered assistance in crossing and 
in finding a job. She was forced to work as a prostitute for four 
months until her mother reported her missing to a local NGO. Police 
found and released the woman, who reported that other women were 
being held against their will in Shymkent. The women lived in small 
rooms with no heat, separated from each other by bars. Many of the 
women were reportedly sick. During interviews with the police, the 
women were fearful and unwilling to testify against the traffickers. 
Many claimed they were voluntarily working as prostitutes. 
 
6. June 10, AiF: The parents of an Uzbekistani boy arranged an 
excursion for their son to travel to Shymkent, Kazakhstan. When the 
boy did not return after a week, his mother called the police. The 
boy was found working in a construction crew in Shymkent with dozens 
of men. None of the workers had passports and all were working in 
Kazakhstan illegally. The father of the boy refused to make a 
written statement to Kazakhstani police and said he would do so in 
Uzbekistan. 
 
--------------------- 
INTERNAL CHILD LABOR 
--------------------- 
 
7. April 2, Liter: A 17-year-old from the Ushtobe orphanage in the 
Almaty Oblast was forced to work long hours on a farm owned by a 
relative of the orphanage's director. The director promised to pay 
the boy for his work but never did. The boy fled the farm several 
times but was returned by the director and forced to work. The 
prosecutors initiated a criminal case against the director who said 
he did not know the boy was working for his relatives. As a result, 
the director was fired and was ordered to pay nine months' salary of 
$700 to the boy. 
 
8. May 22, Akmolinskaya Pravda. A student at the Kokshetau lyceum 
was beaten and found with several injuries including a broken nose 
in the railway station in Lobanovo. The boy said that in September 
2007 he met a retiree from Lobanovo who invited him to his home to 
help around the house. The retiree held him in the home for two 
weeks forcing him to do different types of work including unloading 
six tons of coal. The lyceum did not take any action to identify the 
location of missing student. Prosecutors stated that this was not 
the only case and several other students were released from the 
school to unknown persons based on written requests. 
 
--------------------------- 
INTERNAL LABOR TRAFFICKING 
--------------------------- 
 
9. February 14, Interfax: Police in Karaganda detained the owner of 
a farm suspected in kidnapping and exploiting a local villager. A 
42-year-old resident of Volnyi escaped the farm, where he was 
detained and forced to work for three years, and went to the police. 
He said that he was also regularly beaten by his captor. The farm 
 
ASTANA 00001246  002.2 OF 003 
 
 
owner was arrested and the investigation is ongoing. 
 
10. February 21, AiF: A 31-year-old man was kidnapped f
rom the Badam 
train station near Shymkent.  Two men attempted to rob him and, 
after finding he had no valuables, beat him. An apparent uniformed 
police officer arrived shortly after the attack and offered to 
assist the victim and help him find a job. The man was taken to a 
farm where he worked with a young man from Uzbekistan who did not 
speak Russian. After the Uzbekistani fled the farm, he was replaced 
by another young man. Three months later, the two escaped the farm 
together, but refused to report the incident to the police. 
 
11. April 11, Kazpravda: Three defendants are standing trial in the 
"Chagan case," accused of forcing homeless people to work in the 
village of Chagan. Men were put to work demolishing abandoned 
buildings and women were preparing salvaged blocks and bricks for 
sale. The traffickers recruited the homeless by asking them to help 
unload furniture for money. They were taken to Chagan and held by 
means of force. An unknown number of the workers died.  The rescued 
workers made statements to the police. 
 
------------------ 
SEXUAL TRAFFICKING 
------------------ 
 
12. February 22, Interfax: Four girls were trafficked from Temirtau 
to China through fraudulent means by a 26-year-old man who forced 
them into prostitution and the production of pornography in Urumchi. 
After being held several days, the girls were able to call their 
mothers in Temirtau who reported the situation to the police. When 
the police detained the trafficker, he attempted to bribe them. The 
trafficker was charged with several crimes, including trafficking in 
persons and bribing an official. Police foresee finding more victims 
in the course of their investigation. Various newspapers have 
reported as many as 12 victims discovered so far, however media 
estimates vary. 
 
13. March 19, Interfax: Police in Almaty rescued a 22-year-old girl, 
who was sexually exploited for several months. The girl was 
discovered during a police operation when a madam attempted to sell 
her for $500 at a hotel. A few days earlier, during the 
"Stop-Trafficking" operation in Ust-Kamenogorsk, the police was 
discovered the sexual exploitation of a 17-year-old girl by a 
31-year-old trafficker who offered her services to his friends. 
 
14. March 19, Izvestia-K: Three female traffickers were convicted in 
March by a Shymkent court for forcing a 17-year-old girl from the 
South-Kazakhstan Oblast into prostitution.  In 2007, the girl was 
held against her will for several months and often physically abused 
by her captors. During the trial, evidence of extensive physical 
injuries was presented. One trafficker was sentenced to seven years 
in prison; the others were sentenced to 5 years with postponement 
until their children reach the age of 14. 
 
15. March 28, Liter: The regional court of Zhambyl Oblast 
reevaluated the sentencing of 5 defendants sentenced to 1 to 3 
years' imprisonment in December 2007 by the Shu court.  Not 
satisfied with court's decision, a Taraz-based NGO, with the support 
of the MVD and Presidential Administration, appealed for longer 
sentences. As a result, the traffickers received 10 to 12 years in 
prison and are currently serving time. The traffickers were found 
guilty of transporting under-aged girls from Shu Village to Almaty 
where they forced them to work as prostitutes. 
 
16. April 11, Express-K: Traffic police stopped a car after seeing a 
young girl jump out of it. She told police that she had been 
persuaded to go to Astana to work as a waitress. The girl said she 
only later understood, after hearing the conversation between the 
driver and other passenger in the car, that she would be forced to 
work as a prostitute. When the car slowed down to pass through a 
police checkpoint, she jumped from the car. As part of the 
investigation, police have discovered that several other girls from 
rural areas were transported to Astana with offers to work as 
waitresses, maids, and shop assistants, but the girls were actually 
sold to pimps for prices ranging from $50 to $100 each. Girls as 
young as 16 years old were trafficked. The investigation is 
ongoing. 
 
17. May 6, Interfax: Police in Shymkent are investigating the owner 
of a cafe, her assistant and two policemen after receiving a report 
from a young woman. She s4ated thaTshe gocdn o asapoRUARY TO JUNE 
 
attend college, was released from a brothel by police. She was sold 
to a pimp by her landlady and was regularly beaten for two weeks 
before she began working as a prostitute. Her first client called 
her parents and the police. A criminal case was initiated against 
the owner of the brothel. 
 
19. June 10, Interfax: A 14-year-old Kyrgyzstani girl was rescued 
from a brothel in Almaty after working as a prostitute for several 
months. The girl was trafficked into Kazakhstan and sold to a 
brothel for $250 by a 33-year-old Kyrgyz woman and the woman's 
friend. The traffickers were arrested and the criminal case is 
ongoing. 
 
ORDWAY 
 
ASTANA 00001246  003.2 OF 003 
 
 
attend college, was released from a brothel by police. She was sold 
to a pimp by her landlady and was regularly beaten for two weeks 
before she began working as a prostitute. Her first client called 
her parents and the police. A criminal case was initiated against 
the owner of the brothel. 
 
19. June 10, Interfax: A 14-year-old Kyrgyzstani girl was rescued 
from a brothel in Almaty after working as a prostitute for several 
months. The girl was trafficked into Kazakhstan and sold to a 
brothel for $250 by a 33-year-old Kyrgyz woman and the woman's 
friend. The traffickers were arrested and the criminal case is 
ongoing. 
 
ORDWAY

Wikileaks

08ASTANA1245, KAZAKHSTAN: AMENDMENTS TO DRUG LAWS

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1245.
Reference ID Created Released Classification Origin
08ASTANA1245 2008-07-10 11:36 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3722
RR RUEHAST RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHTA #1245/01 1921136
ZNR UUUUU ZZH
R 101136Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2737
INFO RUEHAST/USOFFICE ALMATY 0547
RUCNCLS/SCA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 001245 
 
STATE FOR INL/AAE (BALABANIAN), INL/C, SCA/CEN (O'MARA) 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR SOCI KCRM KZ
SUBJECT: KAZAKHSTAN: AMENDMENTS TO DRUG LAWS 
 
ASTANA 00001245  001.2 OF 002 
 
 
1. On June 26, the International Day against Drug Abuse and Illicit 
Trafficking, President Nazarbayev signed into law amendments 
introducing tougher punishment for drug-related crimes.  The new law 
increases penalties to life imprisonment for most serious 
drug-related crimes. 
 
2. Interfax-Kazakhstan reported that President Nazarbayev signed the 
law amending the Criminal, Criminal Procedural and Administrative 
Codes to introduce increased penalties for drug-related crimes. 
Because of the threat to Kazakhstani national security posed by 
narco-trafficking, the new law defines drug-related crimes as 
especially grave and, thus, life imprisonment will now be available 
in cases of trafficking in large quantities; participation in 
drug-related crimes as part of a criminal organization; sale of 
drugs in an educational institution and/or to minors; and sale or 
distribution of drugs resulting in death. 
 
---------------------- 
Article 48 - Penalties 
---------------------- 
 
3. Pursuant to Article 48 of the Criminal Code, one can be sentenced 
to life imprisonment for especially grave crimes, making life 
imprisonment an alternative to the death penalty, which was 
suspended in 2003.  However, as was the case for the death penalty, 
women, anyone who committed a crime when under the age of 18, or men 
over the age of 65 at the time of sentencing can not be sentenced to 
life imprisonment.  The newly amended Article 48 includes 
drug-related crimes. 
 
---------------- 
Defining "Large" 
---------------- 
 
4. Many of the amended articles of the criminal code apply 
significantly higher penalties to offenses involving "especially 
large" quantities.  The law defines especially large, large, and 
small depending on the type of drug and whether and how it has been 
processed.  An especially large quantity of heroin is defined as 
more than one gram; any offense involving a small amount - less than 
0.01 grams - is merely an administrative offense and a large amount 
- between .01 and 1 gram - makes an offense criminal without being a 
grave crime.  In the case of pure opium, 3 grams is a large quantity 
and 0.1 grams is small amount.  For marijuana, 1 kilogram is a large 
amount.  Possession of a small amount of marijuana - up to 50 grams 
- is an administrative offense and one is only subject to a fine. 
The law also provides guidelines for fresh marijuana, hashish, 
cannabis, opium cut with neutral substances, poppies, and morphine. 
 
 
----------- 
Article 259 
----------- 
 
5. Under the new Article 259 of the Criminal Code, imprisonment 
sentences from 15 to 20 years with confiscation of property or life 
imprisonment can be applied in cases of illegal purchase, 
transportation or storage with the aim of sales, production, 
processing, or sales of drugs or psychotropic substances committed 
by a criminal organization or in especially large amounts in 
educational organizations.  Article 259 also includes any 
drug-related activity targeted at children. 
 
--------------------------------------------- ------- 
Article 261 - Drug-Related Offenses Involving Minors 
--------------------------------------------- ------- 
 
6. Article 261 prescribes 15 to 20 years with confiscation of 
property or life imprisonment in cases of  encouraging minors to 
consume drugs, especially by (a) a group of people; (b) repeatedly; 
(c) with the use of violence; and (d) against one or more minors. 
The article also covers the encouragement of the consumption of 
drugs leading to death of any person. 
 
-------------------------------------- 
Article 250 - Cross Border Trafficking 
-------------------------------------- 
 
7. Imprisonment from 15 up to 20 years with confiscation of property 
or life imprisonment is now offered in cases of 1) smuggling drugs 
in large quantities through the border; 2) committing the above 
offense repeatedly; by an official misusing his/her authority; using 
violence against a customs control officer; or a crime committed by 
a group acting in concert; 3) committing the above offense in 
especially large quantities by an organized criminal group or 
organization.  Previously, the maximum sentence under Article 250 
was 10 to 15 years and did not include trafficking of large 
quantities. 
 
----------- 
 
ASTANA 00001245  002.2 OF 002 
 
 
Article 259 
----------- 
 
8.  The title of Article 259 of the Criminal Code "Illicit 
Production, Purchase, Storage, Transportation, Carriage or Sale of 
Drugs and Psychotropic Substances" was amended to include 
"Processing".  Illicit purchase, transportation or storage without 
the aim of sale of drugs and psychotropic substances in especially 
large amounts is now punishable by imprisonment from three to seven 
years with confiscation of property.  Previously this offense was 
punishable by an administrative fine or up to three years 
imprisonment.
The same offense committed with the aim of sale, but 
by a person not connected to a criminal group or organization is 
punishable by six to 12 years imprisonment.   Previously the penalty 
was three to seven years. 
 
------------------------------------------- 
Administrative Penalties against Businesses 
------------------------------------------- 
 
9.  Article 319-1 of the Administrative Code penalizes entrepreneurs 
of entertainment facilities who do not take measures to stop the 
sales and/or consumption of drugs, psychotropic substances, and 
precursors.  Fines are determined by the status of the owner and are 
based on the Monthly Calculated Index (MCI), which is determined by 
the GOK annually and is the basis of all fines and taxes for both 
individuals and businesses.  Additionally, MCI is also the basis for 
pension calculations and benefits.  MCI is currently 1,168 KZT 
(approximately $9).  As an example of the use of the MCI, the 
current administrative fine for possession of less than 50 grams of 
marijuana is 2 MCI. 
 
10. Individual entrepreneurs fined under Article 319-1 will be 
subject to a fine of 50 to 150 MCI.  Large entities (as defined in 
the tax code) will be subject to fines ranging from 700 to 1,000 
MCI.  In the case of a repeated offense in the same year, a large 
entity would be fined 1,500 to 2,000 MCI and the business would be 
closed. 
 
11.  For the first time the new law defines entertainment facilities 
as gambling establishments, night clubs, cafe-bars, restaurants, 
internet cafes, billiard clubs, bowling alleys, cinemas, theaters 
and any premises or building used for entertainment, performance, 
sports, cultural purposes.  The new definition broadly expands the 
businesses covered under Article 319-1. 
 
----------------------- 
Destruction of Evidence 
----------------------- 
 
12.  The GOK has wrestled with the serious problem of securing 
evidence from large seizures.  In some cases, corrupt police have 
resold seized heroin.  In response, the Ministry of Interior (MVD) 
has drafted a law allowing for the destruction of seized narcotics. 
The new law would allow anything more than the minimum amount 
defined as "large" to be destroyed as soon as forensic testing is 
completed.  The destruction will require permission of the 
prosecutor and court.  The minimum amount of the drug would be 
retained and entered into evidence, along with the forensic report, 
during trial.  The only exception will be samples admitted as 
material evidence according to Article 223 of the Criminal 
Procedural Code. 
 
-------- 
Comment 
-------- 
 
13.  While drafting the law, the MVD studied both international and 
Kazakhstani practices.  Initially, the MVD took its example from the 
Chinese and attempted to reintroduce the death penalty, which was 
suspended in Kazakhstan in 2003.  If they had been successful, the 
death penalty would have only been available in drug-related crimes. 
 However, Parliament chose to follow Kazakhstani practice and 
approved the imposition of life sentences as an alternative to the 
death penalty.  This is but one example of the MVD's reaction to the 
increasingly serious problem of narco-trafficking and drug use among 
the young.  Even without the reintroduction of the death penalty, 
the new law is evidence of the GOK's commitment to the fight against 
narco-trafficking through Kazakhstan.  Criminal organizations and 
narco-trafficking rings have been especially targeted by this law. 
Strong drug laws in coordination with the creation of the financial 
intelligence unit are necessary for the GOK to cut off both the 
merchandise and the profits of these organizations.  The next 
important step is passage of the law to allow for the destruction of 
large quantities of seized narcotics, which will also strike a blow 
against corruption in the law enforcement community.  End Comment. 
 
ORDWAY

Wikileaks

08ASTANA1236, KAZAKHSTAN – ALMATY NOTES, JUNE 23 – JULY 4, 2008

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1236.
Reference ID Created Released Classification Origin
08ASTANA1236 2008-07-10 02:41 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3337
RR RUEHAST
DE RUEHTA #1236/01 1920241
ZNR UUUUU ZZH
R 100241Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2727
INFO RUEHVEN/USMISSION USOSCE 1929
RUEHEK/AMEMBASSY BISHKEK 8299
RUEHNT/AMEMBASSY TASHKENT 8171
RUEHAH/AMEMBASSY ASHGABAT 7334
RUEHDBU/AMEMBASSY DUSHANBE 2371
RUEHMO/AMEMBASSY MOSCOW 1538
RUEHAST/USOFFICE ALMATY 0543

UNCLAS SECTION 01 OF 02 ASTANA 001236 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL KZ
SUBJECT: KAZAKHSTAN - ALMATY NOTES, JUNE 23 - JULY 4, 2008 
 
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. 
 
Opposition Parties Propose Legislation 
-------------------------------------- 
 
2.  On June 24, the opposition Azat party and National Social 
Democratic Party (OSDP) went public with their own specific 
proposals for amending Kazakhstan's legislation on elections, 
political parties, the media, and freedom of assembly.  The parties 
explained that their aim was to advance implementation of 
Kazakhstan's Madrid commitments on democratic reform.  According to 
Azat leader Bulat Abilov, "seven months have passed since 
Kazakhstan's bid for the OSCE chairmanship was approved, but no 
legislative changes have yet been introduced to parliament; if the 
Madrid commitments are not fulfilled, the reputation of the country 
will be damaged." 
 
Abilov Comments on Nazarbayev Speech 
------------------------------------ 
 
3. Azat leader Abilov also commented on President Nazarbayev's June 
29 address to the OSCE Parliamentary Assembly session in Astana, in 
which Nazarbayev publicly discussed the Madrid commitments for the 
first time.  "We learned nothing new from the President's speech, 
but do not doubt that a 'two-party system' will be introduced in 
parliament," Abilov said.  Abilov contended that with two parties in 
parliament, 90 per cent of the seats would in any event wind up in 
the hands of Nazarbayev's Nur Otan party.  As a result, the 
government would control parliament just as it has previously. 
 
Aldamzharov Joins Communist Party 
--------------------------------- 
 
4.  Gaziz Aldamzharov has joined the Communist Party and has been 
elected to its leadership as a party secretary.  From 1998 to 2001, 
Aldamzharov was Deputy Chairman of the opposition Republican 
People's Party of Kazakhstan, which was founded by former Prime 
Minister Akezhan Kazhegeldin. In 2003, Aldamzharov left the 
opposition and was appointed by President Nazarbayev to be 
Kazakhstan's ambassador to Belarus. 
 
Hunger Strike Ended 
------------------- 
 
5.  On June 21, a group of Almaty residents ended a two-week hunger 
strike which they had initiated to protest an effort to seize their 
property to build more lucrative residences.  Following negotiations 
with representatives of a local construction company, they reached 
an agreement on satisfactory compensation for their homes.  A 
separate hunger strike ended a week earlier, when the Almaty city 
administration reversed a plan to seize the land of another group of 
residents. 
 
New District in Almaty 
---------------------- 
 
6. On June 2, the Almaty city maslikhat (legislature) approved 
Almaty mayor Akmetzhan Yesimov's decision to establish a new city 
district (rayon) which will include illegally-constructed 
settlements on the city's outskirts.  According to the Interfax news 
agency, in the past, the city administration held an uncompromising 
position toward houses illegally constructed by rural migrants, 
which included attempts by the city to demolish such dwellings. 
However, Yesimov holds a different position.  His administration 
plans to develop the infrastructure of the new district and to 
resolve the socio-economic problems of its residents. 
 
Almaty City Administration Discusses Problems 
--------------------------------------------- 
 
7.  At a June 27 city government meeting, Almaty mayor Yesimov 
harshly criticized his subordinates, accusing them of failing to be 
proactive in dealing with issues like public protests.  He argued 
that the incitement of inter-ethnic hatred in Almaty was an urgent 
problem, with some individuals attempting to exacerbate social 
tensions.  Almaty's deputy mayor cited other problems, such as 
migration and new religions.  Since 1991, he contended, the number 
of religious associations in the city has increased twelve-fold, and 
the activities of some of them are quite dubious.  The city 
prosecutor agreed that there has been an escalation in inter-ethnic 
tensions.  He added that over the past 18 months, law enforcement 
officials have recorded 12 cases of dissemination of "extremist 
literature." 
 
ASTANA 00001236  002 OF 002 
 
 
 
ORDWAY

Wikileaks

08ASTANA1225, KAZAKHSTAN – ROUND TABLE ON POLITICAL PARTY LEGISLATION

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1225.
Reference ID Created Released Classification Origin
08ASTANA1225 2008-07-09 07:43 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2541
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #1225 1910743
ZNR UUUUU ZZH
O 090743Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2714
INFO RUCNCIS/CIS COLLECTIVE 0557
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHVEN/USMISSION USOSCE 1928

UNCLAS ASTANA 001225 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM PHUM PREL KZ
 
SUBJECT: KAZAKHSTAN - ROUND TABLE ON POLITICAL PARTY LEGISLATION 
 
1. Summary:  On July 1, the NDI and IRI organized a round-table on 
Kazakhstan's political party law which also included broader 
discussion of Kazakhstan's Madrid commitments.  All the major 
parties were represented, including the ruling Nur Otan party. 
Several participants presented concrete proposals on how to amend 
the current legislation to allow for easier party registration and 
greater political participation for opposition parties. Many 
expressed skepticism regarding the government's willingness to 
fulfill the Madrid commitments.  Nur Otan's representative claimed 
that draft amendments to the political party law were already in the 
works.  End Summary. 
 
2. On July 1, the DCM attended an NDI/IRI-organized roundtable on 
Kazakhstan's political party law.  The event brought together 
high-level representatives from major opposition parties, including 
Azat's Peter Svoik and Bulat Abishev, the un-registered Alga party's 
Vladimir Kozlov, OSDP's Serikbai Alibaev, Az Zhol's Burikhan 
Nurmukhamedov, the Communist Party's Serikbolsyn Abdildin, and 
Adilet's Tulegen Sadykov.  Nur Otan was represented by a mid-level 
legal advisor, Yuri Subchenkov.  The roundtable included NGOs, OSCE 
representatives, and members of several diplomatic missions. 
British Ambassador to Kazakhstan Paul Brummell and a British MP in 
Astana for the OSCE Parliamentary Assembly session were both in 
attendance at the event. 
 
3. The majority of the participants agreed that Kazakhstan's 
political party legislation needs to be reformed.  Azat, OSDP, and 
Adilet suggested several concrete legislative amendments, including 
requiring only 5,000 signatures to set up a party, as opposed to the 
current 50,000.  They also suggested lowering the threshold for 
getting into the Mazhilis from 7 percent to 5 percent.  (Note: The 
threshold is set by the election law, not by the political party 
law. End Note.)  Alga's Kozlov added that the current rules make it 
easy for the government to suspend or refuse a party's registration. 
 (Note: Alga's registration has been pending for almost two years. 
End Note.)  Several speakers criticized the lack of transparency and 
objectivity in the Central Election Commission and called for reform 
of the local election commissions.  Not surprisingly, the discussion 
was laden with criticism of the ruling Nur Otan party, specifically 
for allegedly being too heavily involved in government policies, 
meddling with the opposition media, and interfering with freedom of 
assembly. 
 
4. Speaking more broadly, Azat's Svoik expressed skepticism that 
Kazakhstan's 2010 OSCE chairmanship will bring significant changes 
in terms of democratic reform.  He characterized Foreign Minister 
Tazhin's speech at Madrid as "mere words" meant to placate the 
international community and predicted that the government will not 
go further than making "cosmetic changes" to the legislation it 
committed to amend.  The Communist Party's Abdildin said the parties 
must demand that the government fulfill its Madrid commitments, and 
Alga's Kozlov added that the government must issue a schedule of 
implementation.  Several participants said that concrete legislative 
improvements to the political party law will only be made if the 
opposition parties are included in the working group tasked to work 
on it.  (Note: The round-table's final resolution, released on July 
3, included these demands, as well as a call on the OSCE to require 
fulfillment of the Madrid obligations.  End Note.) 
 
5. As the sole representative of the ruling Nur Otan party in 
attendance, Sabchenkov sounded a different note from the rest of the 
participants.  Referring to Nazarbayev's June 29 speech to the OSCE 
Parliamentary Assembly session in Astana (in which for the first 
time, Nazarbayev publicly discussed the Madrid commitments), 
Sabchenkov said that Nazarbayev has already tasked the government 
with amending the party legislation.  A new draft law was in the 
works, he claimed.  (Note: In a separate conversation, Deputy 
Minister of Justice Dulat Kustavletov informed us that while a 
working group on the political party law has not yet been convened, 
new draft legislation will be ready before the end of the year. End 
Note.)  Sabchenkov also contended that registration issues faced by 
some parties were the result of incompetence and corruption among 
low-level government workers, and not a concerted campaign on the 
part of Nur Otan to block unwanted competition.  His statements were 
met by open skepticism from the opposition. 
 
6. Comment:  Many of the proposals on amending the political party 
law that were put forward at the roundtable are well-known to the 
government.  Several had previously been made by NGOs and opposition 
parties, including the idea of requiring fewer signatures for 
registration.  End Comment. 
 
ORDWAY

Wikileaks