09ASTANA623, KAZAKHSTAN: U.S. ASSISTANCE HELPS CUSTOMS CONTROL

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Reference ID Created Released Classification Origin
09ASTANA623 2009-04-12 07:57 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO7892
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW
RUEHROV RUEHSR
DE RUEHTA #0623/01 1020757
ZNY CCCCC ZZH
R 120757Z APR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 5147
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1481
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0859
RUEHUL/AMEMBASSY SEOUL 0546
RUEHKO/AMEMBASSY TOKYO 1562
RHFJUSC/USCUSTOMS WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0958
RHEHNSC/NSC WASHDC 1044
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 000623 
 
SIPDIS 
 
STATE FOR SCA/CEN AND ISN/ECC 
 
E.O. 12958: DECL: 03/19/2019 
TAGS: PGOV PINR PREL MNUC KNNP CH KZ
SUBJECT: KAZAKHSTAN:  U.S. ASSISTANCE HELPS CUSTOMS CONTROL 
COMMITTEE COMBAT CORRUPTION 
 
REF: A. ASTANA 2352 
     B. ASTANA 00052 
     C. ASTANA 00610 
 
Classified By: Deputy Chief of Mission Kevin Milas, 1.4 (b/d) 
 
1.  (C) SUMMARY:  Post's Export and Related Border Security 
(EXBS) and Department of Energy (DOE) offices have provided 
assistance to strengthen border security at many of 
Kazakhstan's 112 border crossing points.  Typical site 
assessments indicate Kazakhstan's border crossing points 
typically process large amounts of cargo, often in regions 
remote from large population centers.  Many border crossing 
points, such as Dostyk on the Kazakhstan-China border, are 
vulnerable to corruption because of their isolation and 
remote location.  However, Kozy-Korpesh Karbuzov, Chairman of 
Kazakhstan's Customs Control Committee, has been aggressively 
combating corruption, with several investigations even 
leading to the arrest of senior officials.  The World Customs 
Organization was impressed enough with Karbuzov's $63 million 
customs modernization program that it reportedly is willing 
to consider Kazakhstan's proposal  to establish a Central 
Asian regional customs training center in Astana.  However, 
the endemic nature of corruption in Customs will make for a 
long, tough battle.  END SUMMARY. 
 
U.S. ASSISTS KAZAKHSTAN TO SECURE ITS BORDER 
 
2.  (C) Per reftels, post's EXBS and DOE offices have been 
providing the government of Kazakhstan with assistance to 
strengthen border security at many of Kazakhstan's 112 border 
crossing points.  DOE's Second Line of Defense (SLD) Program 
installed radiation portal monitors at nine border crossings 
in 2008, and is working on eight sites in 2009.  This 
U.S.-funded assistance complements Kazakhstan's own 
installation of radiation portal monitors at over 40 border 
crossing points.  The government of Norway also signed a 
Memorandum of Understanding with the U.S. Government to 
complement existing U.S. programs by providing $800,000 in 
Norwegian funding, which Norway has stipulated must be used 
at vehicle crossings on the Russian border. 
 
LARGE CARGO VOLUMES IN ISOLATED REGIONS 
 
3.  (C) EXBS and DOE teams have conducted detailed site 
assessments of border crossing points, including at Dostyk, 
the only rail crossing on the Kazakhstani-Chinese border. 
Dostyk is the processing point for the majority of commercial 
cargo between Kazakhstan and China.  The Dostyk assessment 
revealed several important findings.  First, the volume of 
rail cargo between China and Kazakhstan is tremendous -- and, 
prior to the global financial crisis, had been growing 
rapidly.  The rail crossing is open seven days a week, and 
processes 600 railcars per day, as well as four passenger 
trains per week.  The Kazakhstani Customs Control Committee 
maintains documentation at Dostyk on the number of 
transactions (which can include multiple railcars, worth of 
cargo) and on cargo weight.  In 2006, for instance, Dostyk 
recorded 13,000 transactions weighing 11.5 million tons, an 
increase of 4,000 transactions over 2005.  Due to the poor 
road infrastructure in the region, there is little vehicular 
traffic.  Prior to the economic crisis, on an average day 60 
trucks entered Kazakhstan from China, all laden with cargo, 
while 10 to 20 returned empty to China.  (COMMENT:  The 
volume of trade is all the more significant and impressive 
because both Dostyk and its neighboring Chinese border town 
are very remote from major population centers.  There are no 
neighboring cities or towns within 100 miles.  EXBS staff 
observed that traveling by four-wheel drive vehicle from 
Dostyk to Almaty took thirteen hours of driving under 
extremely difficult conditions.  END COMMENT.) 
 
 
ASTANA 00000623  002 OF 003 
 
 
ISOLATION AND LUCRATIVE TRADE ENCOURAGE CORRUPTION 
 
4.  (C) Many border crossing points, such as Dostyk, are 
particularly vulnerable to corruption because of their 
isolation and remote location.  Local officials told EXBS 
staff that 70 percent of Dostyk's population are employed by 
the national railroad company, and the remaining 30 percent 
are Customs, Border Guard, and military personnel and their 
families.  Such work-force concentration makes senior 
leadership within Customs and the Border Guard Service very 
powerful because dissatisfied employees have few other job 
options in the
 area.  Since almost all residents of the 
region are deeply reliant on the highly lucrative trade with 
China, the temptation at many levels is to seek a cut of the 
profits. 
 
5.  (C) EXBS staff were told anecdotally that Customs 
officials can make up to several hundred dollars in bribes 
per truck of cargo.  Residents also reported, and Embassy 
staff observed, that many high-ranking officials involved in 
Customs and the Border Guard Service in the region live in 
very large houses and drive fancy cars.  Our interlocutors 
widely acknowledged that positions in Customs cost thousands 
of dollars to obtain )- a practice which only makes economic 
sense if the payments will be recouped by the payee from 
income other than salary.  (COMMENT:  In many cases, 
corruption is not even recognized as such.  If people 
involved in shipping cargo pay money to avoid wait times or 
get expedited service, they often view this as a legitimate 
business expense.  Many shipping companies, expediters, and 
brokers collect modest fees for &unspecified Customs 
clearance procedures,8 which often include securing priority 
treatment for customs clearance.  END COMMENT.) 
 
CUSTOMS HEAD TAKES STEPS AGAINST CORRUPTION 
 
6.  (C) Customs Control Committee Chairman Kozy-Korpesh 
Karbuzov has made strong statements denouncing corruption. 
He has also investigated and disciplined senior officials, 
some of whom have been arrested.  On December 2, 2008, a 
newspaper article reported that a prominent Customs official, 
Mukhtar Salmenbayev, formerly the deputy head of the 
Department for Fighting Contraband at Customs, was arrested 
for allowing contraband to pass through the 
Kazakhstani-Kyrgyz border.  Salmenbayev had been in charge of 
five ports, and was reportedly part of the "pass-up" system, 
in which Customs inspectors collect a bribe and pass a 
portion to their supervisors.  Within the last several 
months, Customs also fired a second official, Makhfuz 
Baltaev, for corruption.  Both had participated in the 
U.S.-funded International Airport Contraband Inspection 
(IACIT) Training conducted November 3-7, 2008 (reftel B). 
Ironically, Salmenbayev had used his cell phone to proudly 
show pictures of his huge house and many cars to U.S. Customs 
officials during the training program.  An EXBS program 
assistant, who accompanied the Kazakhstani participants, 
reported that he showed little interest in the actual 
training, participating as minimally as possible and enjoying 
his free trip to the United States.  Prior to their sudden 
dismissal, the two officials had not given any indications to 
post of inappropriate conduct.  Post suspects that Customs 
either discovered something while Salmenbayev was away in the 
United States, or used the training as a way to get him away 
from his post long enough to conduct an investigation without 
interference.  The December 2, 2008 article called 
Salmenbayev "the roof" that protected smugglers of illicit 
contraband, and reported that 20 trucks were allowed to enter 
Kazakhstan on December 1 carrying unspecified "illicit" cargo 
through the Kyrgyz-Kazakhstani border.  Two other customs 
officers who worked at the Semey and Maikachagai posts along 
Kazakhstan's eastern border with China remain under 
investigation for "non-fulfillment of duties" after they 
 
ASTANA 00000623  003 OF 003 
 
 
allowed several trucks to enter with imported goods not 
declared on customs manifests.  Moreover, former Deputy 
Chairman of the Customs Control Committee Aisagalieva 
recently resigned, and an EXBS program assistant heard that 
this was allegedly due to the fact that she permitted a 
Chinese company doing business with Kazakhstan to pay 
educational expenses for her child. 
 
WORLD CUSTOMS ORGANIZATION CONSIDERS ASTANA TRAINING CENTER 
 
7.  (C) Despite the global economic crisis, the Kazakhstani 
government has declared that it remains committed to spending 
over $65 million on its customs modernization reforms, of 
which $18 million will come from the World Bank.  Per reftel 
C, in December 2008, Kazakhstan unveiled an impressive new 
electronic system to track customs data electronically, which 
is currently available at five of Kazakhstan's 112 ports. 
Embassy officials from the DOE and EXBS offices have been 
impressed with the Karbuzov,s reforms and his receptiveness 
to Western assistance.  Karbuzov has also expressed strong 
interest in visiting the United States to personally observe, 
and learn from, the U.S. system.  His visit is currently 
expected to be from June 6-14.  On April 7, the EXBS Advisor 
met with representatives of the World Customs Organization, 
which also seems impressed with Karbuzov's reforms -- enough 
so that it is willing to consider Kazakhstan's proposal 
establish a Central Asian regional customs training center in 
Astana, if all the countries of the region agree. 
 
8.  (C) COMMENT:  Karbuzov previously worked for the 
Committee for National Security (KNB), the Kazakhstani 
successor agency to the Soviet KGB.  The head of the Border 
Control Department at Customs described Karbuzov to us as "a 
man of principle and tough character."  EXBS Advisor has been 
impressed by the actions that Karbuzov has taken so far on 
fighting corruption.  However, as recent examples also 
indicate, corruption is endemic to a degree that even if the 
senior Customs leadership demonstrates the best of intentions 
and political will, it will still take years to succeed in 
this fight, especially in such a lucrative area involving 
control over trade.  It is not surprising that on a recent 
USAID-funded poll Kazakhstanis identified Customs as the most 
corrupt institution in Kazakhstan.  Nonetheless, Karbuzov 
seems determined to turn Customs' image around.  END COMMENT. 
HOAGLAND

Wikileaks

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