OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions

OSCEs Parlamentariske Forsamling 2022-23 (2. samling)
OSCE Alm.del Bilag 11
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KREMLIN'S SECRET ALLY - HOW TOKAYEV IS HELPING PUTIN CIRCUMVENT SANCTIONS

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

The Open Dialogue Foundation

was established in Poland in 2009 on the initiative of Ukrainian

student and civic activist Lyudmyla Kozlovska (who currently serves as President of the

Foundation). Since its founding, statutory objectives of the Foundation include the protection of

human rights, democracy and the rule of law in the post-Soviet area. In July 2017 area of interest

of the Foundation was expanded due to the rapidly deteriorating situation in Poland and other

EU member states affected by illiberal policies implemented by their populist governments. The

Foundation has its permanent representations in Brussels, Warsaw and Kyiv.

Website:

https://odfoundation.eu/

; e-mail:

[email protected]

Twitter:

@ODFoundation

Human Rights Protection Foundation Qaharman

–

a Kazakhstani human rights organisation

which was established for the purpose of protecting fundamental human rights in Kazakhstan,

in particular, the right to peaceful assembly, right to a fair trial, and right to participation in the

management of state affairs, as well as freedom of speech and dissemination of information. As

a public initiative, Qaharman began its activities in Kazakhstan in 2019, and in February 2020, it

was officially registered. Qaharman activists monitor politically motivated trials and the right to

peaceful assembly.

Twitter:

@qaharman_kz

; e-mail:

[email protected]

The human rights movement ‘405’

is a public initiative founded in 2019. The main goal of the

movement is to protect participants of peaceful assemblies and bloggers who are subject to

political prosecution under Article 405 of the Criminal Code of Kazakhstan (“participation in the

activities

of the organisation after its recognition as extremist”). The movement protects the

right to peaceful expression, which should not be regarded by the authorities as ‘extremism’.

Twitter:

@hr405kz

; e-mail:

[email protected]

The Bostandyq Kz human rights movement

intends to fight for the observance of the

constitutional rights and freedoms of the citizens of Kazakhstan, and to inform about human

rights violations in the country. The movement was founded on 14 September 2020.

Facebook:

Bostandyq Kz

The human rights movement Veritas

was established on 17 September 2020. The aim of the

movement is to protect human rights in Kazakhstan, with special attention to freedom of speech,

peaceful assembly and peaceful association. The movement monitors the implementation of

Kazakhstan's commitments in the areas of human rights, environment, health and anti-

corruption, and informs the EU, the UN, PACE, the OSCE, GRECO and the governments of

democratic states about the results of the monitoring. Veritas conducts public campaigns to

protect politically persecuted activists, political prisoners and victims of torture.

Facebook:

Veritas human rights movement

; e-mail:

[email protected]

`The "Femina Virtute" human rights movement,

was established on 4 November 2020, and

aims to combat discrimination against women in Kazakhstan and to document violations of

women's, civil and political rights. The members of the movement conduct solidarity actions in

defence of human rights and train citizens to defend their rights. Based on the monitoring

results, the movement provides information to the European Parliament, the European

Commission, the UN, the OSCE, the Council of Europe, governments and politicians of the EU

states, as well as the USA, Canada, Australia, the UK, Norway and Switzerland.

Facebook:

Femina Virtute

; e-mail:

[email protected]

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Human rights movement "Article 14"

was established on 5 November 2020 with the aim of

monitoring the right to fair justice in Kazakhstan. The members of the movement inform citizens

of Kazakhstan and the international community about violations of the right to a fair trial, fight

for greater transparency in the justice process, and draw public attention to violations during

trials.

Facebook:

Article Hrm

; e-mail:

[email protected]

The Human Rights movement Elimay

was established on 17 October 2020. The movement aims

to protect civil and political rights and freedoms in Kazakhstan. The movement calls to put an

end to all forms of political repression and release of political prisoners in Kazakhstan.

Facebook:

ELIMAY ~ defence of human rights in Kazakhstan

; e-mail:

[email protected]

Project Manager:

Lyudmyla Kozlovska (the Open Dialogue Foundation):

[email protected]

the Open Dialogue Foundation, “Qaharman”, “405”, “Bostandyq Kz”, “Veritas”, “Femina Virtute”, “Article 14”, “Elimay”,

December 2022

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Table of Contents:

1. INTRODUCTION ............................................................................................................................... 5

2. KAZAKHSTAN'S POLITICAL SUPPORT FOR RUSSIA........................................................................... 6

Ban on protests in support of Ukraine ........................................................................................... 8

Tokayev is in Putin's debt ............................................................................................................... 8

Kazakhstan helps Russia circumvent Western sanctions .............................................................10

3. KAZAKHSTAN STRENGTHENS RELATIONS WITH RUSSIA AMID ITS INTERNATIONAL

ISOLATION.....................................................................................................................................12

Kazakhstan's "new geopolitical reality"........................................................................................12

Re-registration and relocation of Russian companies ..................................................................13

"Parallel import" ...........................................................................................................................14

Assistance in lifting sanction restrictions for the purchase of Russian subsidiary banks and

for the operation of Russian payment systems in Kazakhstan ....................................................15

Circumventing financial sanctions ................................................................................................18

Military cooperation .....................................................................................................................19

4. DISINFORMATION OPERATIONS TO CREATE AN IMAGINARY CONFRONTATION BETWEEN

RUSSIA AND KAZAKHSTAN............................................................................................................20

Positioning Kazakhstan as a "victim of an alleged attack" by Russia ...........................................21

Information noise to divert attention from the change of shareholders of

Russian-sanctioned banks in Kazakhstan .....................................................................................21

Tokayev's speech at the St Petersburg Economic Forum.............................................................22

How Kazakhstan avoided sanctions for helping to steal Ukrainian grain ....................................24

Increasing Kazakhstan's military budget for defence against Russia? .........................................26

Fake about the cessation of military cooperation between Kazakhstan and Belarus .................27

Fake about the cancellation of teaching Russian in Kazakhstani schools ....................................28

Fake about Kazakhstan's withdrawal from the CSTO ...................................................................28

5. RECOMMENDATIONS ....................................................................................................................29

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

1. INTRODUCTION

After Russia launched a full-scale military invasion of Ukraine in February 2022, the Kazakhstani

authorities stated that Kazakhstan "respects the territorial integrity of Ukraine" and "has not and will not

recognise both the situation with Crimea and the situation with Donbass".

1, 2

In June 2022, President

Tokayev declared non-recognition of the so-called "LPR" and "DPR”.

However, the declared position of

Kazakhstan's leadership serves only as a cover for supporting Russia in circumventing the sanctions regime

for a full-scale military invasion of Ukraine.

The Kazakhstani authorities have conducted large-scale disinformation operations in Ukraine and the

West about the alleged "conflict" between Tokayev and Putin, "strict implementation of sanctions", the

"threat of a Russian attack on Kazakhstan" and, accordingly, "forced support for Russia", in order to

prevent sanctions against the Kazakhstani officials and companies that assist Russia in circumventing

international sanctions, including the supply of military and dual-use goods.

●

The Kazakhstani authorities use Kazakhstan's state agencies to promote in the West the easing

and/or lifting of sanctions imposed on financial institutions (Sberbank Kazakhstan, Alfa-Bank

Kazakhstan) and instruments (Mir payment system).

●

Since the start of the invasion on 24 February 2022, Kazakhstani civil society has continuously

published facts about Kazakhstan's assistance to Russia in circumventing the sanctions and has

called on Ukraine and Western countries to impose secondary and personal sanctions on the

violators of the sanctions regime. The result of such actions should not only be to shut down

existing sanctions circumvention schemes, but also to weaken Russia's financial, military and

technological capacity to wage an illegal war against Ukraine.

●

Kazakhstan acquired Russian-owned sanctioned Sberbank Kazakhstan and Alfa-Bank Kazakhstan

and lobbied the US government, with the help of Kazakhstani state agencies such as the National

Bank, the Ministry of Foreign Affairs, Agency for Regulation and Development of the Financial

Market, to remove them from the sanctions list.

●

Kazakhstan has increased its exports of

machines, equipment, vehicles, instruments and to Russia

many times over (a 284.3% increase),

TVs, monitors and projectors by

312 times,

computers by

215 times, and telephones by 88 times.

4, 5

The goods and components supplied are used by Russia's

military-industrial complex. Ukrainian military intelligence has reported the delivery of US and

Japanese missile components to Russia by Kazakhstan.

●

Russian companies relocated to Kazakhstan are free to use financial services, including

international financial transactions, thereby offsetting some of the lost imports to Russia.

7, 8

https://rus.azattyq.org/a/31786625.html

https://www.euractiv.com/section/central-asia/interview/kazakh-official-we-will-not-risk-being-placed-in-the-same-basket-as-russia/

https://rus.azattyq.org/a/tokaev-o-priznanii-lnr-i-dnr/31903400.html

https://tengrinews.kz/kazakhstan_news/eksport-tovarov-iz-kazahstana-v-rossiyu-vyiros-za-god-485209/

https://rus.azattyk.org/a/32131171.html

https://www.repubblica.it/esteri/2022/10/31/news/ucraina_servizi_segreti_iran_addestra_russi_crimea-372441671/

https://rus.azattyq-ruhy.kz/economics/43686-rossiiane-perekhodiat-na-tenge-valiutu-rekordno-skupaiut-na-moskovskoi-birzhe

https://24.kz/ru/news/economyc/item/550519-rossijskie-promyshlenniki-rassmatrivayut-uglublenie-kooperatsii-s-kazakhstanom

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Recommendations:

●

Immediately shut down Russia's ability to circumvent sanctions through Kazakhstan and other

Central Asian countries in order to achieve the desired result of international sanctions against the

Kremlin;

●

Introduce personal sanctions against individuals and entities, including government officials, who

facilitate the circumvention of sanctions;

●

Implement the recommendations of the European Parliament Resolution dated 20 January 2022

particularly the requirement for Kazakhstan to allow UN and OSCE experts to conduct an

international investigation into the role of CSTO troops in suppressing peaceful mass protests in

Kazakhstan in January 2022;

●

Provide political and financial support to independent civil society, the opposition and Kazakhstani

whistleblowers who expose Tokayev's assistance in circumventing international sanctions for the

Kremlin and surrendering Kazakhstan's national interests to Russia;

●

Curb the misuse of inter-state criminal and civil law cooperation instruments, the conduct of illegal

surveillance on EU territory of the opposition and their loved ones; investigate and stop

propaganda attacks aimed at misleading EU state authorities and achieve politically motivated

extradition of opposition representatives from EU countries to Kazakhstan, who systematically

expose Tokayev's assistance in circumventing international sanctions for the Kremlin and

surrendering Kazakhstan's national interests to Russia.

This report is based on information from public sources, expert assessments and insider information. The

report contains information on the political support of Kazakhstan's leadership for Russia, schemes to

circumvent international (financial and technological) sanctions, examples of disinformation, as well as

recommendations to Ukraine, the US, the European Union, the UK and Canada.

2. KAZAKHSTAN'S POLITICAL SUPPORT FOR RUSSIA

The leaders of these two countries regularly declare strategic cooperation, allied relations and intensified

interaction on a range of issues, including trade, economic and military-technical partnership. Kazakhstan

participates jointly with Russia in a number of interstate unions - the Eurasian Economic Union (EAEU),

the Shanghai Cooperation Organisation (SCO) and the Collective Security Treaty Organisation (CSTO).

Kazakhstan's political leadership has not explicitly condemned the war against Ukraine launched by

Russia. Since the beginning of Russia's full-scale military invasion of Ukraine, Kazakhstan has not

supported any of the six UN General Assembly resolutions condemning Russia's war against Ukraine.

10, 11

Kazakhstan also voted against suspending Russia's membership in the UN Human Rights Council and

against removing Iran, which helps Russia with weapons, from the UN Commission on the Status of

Women.

12, 13

https://www.europarl.europa.eu/doceo/document/TA-9-2022-0012_EN.html

https://rus.azattyq.org/a/32131130.html

https://rus.azattyq.org/a/32180808.html

https://rus.azattyq.org/a/31801538.html

https://informburo.kz/novosti/kazaxstan-progolosoval-protiv-isklyuceniya-irana-iz-komissii-oon-po-polozeniyu-zenshhin

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

On 15 December 2022, Kazakhstan

voted against a UN resolution

on the situation of human rights in the

temporarily occupied Autonomous Republic of Crimea, the one requiring Russia to stop its aggression and

to withdraw its troops from all of Ukraine, which refutes statements by Kazakhstan's leadership

supporting the UN principles and Ukraine's territorial integrity. On the same day, 15 December 2022:

Kazakhstan

voted in favour of a Russian resolution

at the UN on "combating glorification of Nazism, neo-

Nazism and other practices that contribute to fuelling contemporary forms of racism, racial

discrimination, xenophobia and related intolerance".

Voting at the UN:

1) 2 March 2022 Kazakhstan abstains from voting at the UN General Assembly on a resolution

condemning Russia's invasion and calling for the immediate withdrawal of troops from Ukraine.

2) 24 March 2022 Kazakhstan abstains from voting on a resolution on the humanitarian

consequences of aggression against Ukraine.

3) 7 April 2022 Kazakhstan votes against suspending Russia from the UN Human Rights Council.

4) 20 September 2022 Kazakhstan abstains from voting on President Zelenskyi's online address to

the UN.

5) 7 October 2022 Kazakhstan votes against the appointment of a Special Rapporteur on the situation

of human rights in Russia.

6) 12 October 2022 Kazakhstan abstains from voting on a resolution condemning Russia's annexation

of Ukrainian territories.

7) 14 November 2022 Kazakhstan abstains from voting on a resolution on reparations to Ukraine.

8) 15 December 2022 Kazakhstan

votes against

a resolution on the situation of human rights in the

temporarily occupied Autonomous Republic of Crimea, which also demands that Russia stop its

aggression and withdraw its troops from all of Ukraine.

9) 15 December 2022 Kazakhstan

votes in favour of a Russian resolution

at the UN on "combating

glorification of Nazism, neo-Nazism and other practices that contribute to fuelling contemporary

forms of racism, racial discrimination, xenophobia and related intolerance".

10) 14 December 2022 Kazakhstan votes against Iran's removal from the UN Commission on the Status

of Women.

The political support of Kazakhstan's leadership for Russia and the CSTO is also confirmed by the fact that

on the day of a massive missile strike on Ukraine, 23 November 2022, Imangali Tasmagambetov became

head of the Collective Security Treaty Organization (CSTO). Tasmagambetov is one of Kazakhstan's most

influential officials, close to former President Nursultan Nazarbayev. Tasmagambetov is a former prime

minister of Kazakhstan, former mayor of Astana, former defence minister and former ambassador of the

Republic of Kazakhstan to Moscow.

14, 15

Tasmagambetov's appointment as secretary general of the

Russian-led organisation occurred against the backdrop of Russia being recognised by the European

Parliament as a state sponsor of terrorism.

At the CSTO summit on 24 November 2022, Tokayev made a

statement saying: "any

chance must be used to achieve

at least a truce".

This statement by Tokayev

echoes the rhetoric of the Russian leadership

on the need for a short truce to restore forces.

https://www.pravda.com.ua/rus/news/2022/11/23/7377667/

https://informburo.kz/novosti/imangali-tasmagambetov-stal-generalnym-sekretaryom-odkb

https://www.bbc.com/russian/news-63723565

https://rus.azattyq.org/a/32146885.html

https://www.rbc.ua/ukr/news/rosiya-hoche-korotkogo-peremir-ya-zelenskiy-1668842641.html

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

In order to prevent the introduction of secondary sanctions for helping Russia, the Kazakhstani authorities

carry out disinformation operations, including by representatives of “think tanks”, the Ministry of Foreign

Affairs of the Republic of Kazakhstan and Kazakhstani embassies abroad. In particular, the director of the

Kazakhstan Institute for Strategic Studies under the President of Kazakhstan, Tukumov Yerkin, visits to

Western countries to convince them that Kazakhstan's leadership allegedly supports Ukraine, but,

"fearing a transport and logistics blockade", "Russian military aggression" and "occupation of Northern

and Western Kazakhstan", is "forced" to vote against Ukraine and "forced" to help Russia bypass

sanctions. This is also confirmed by the statement of Mazhilis deputy Aidos Sarym, a well-known

propagandist in Kazakhstan, on the issue of Kazakhstan voting for Russia at the UN:

"Let's

get this straight.

Kazakhstan has stated categorically that it does not recognise Crimea and Donbass. There is now a fierce

war between Ukraine and Russia. Each side is using the UN platform to increase its chances. A legal thing.

Our task is to examine our situation. In most cases, Kazakhstan refrains. Similarly, we are forced to perform

"diplomatic rituals". I urge Kazakhstanis to understand this aspect correctly."

Through disinformation, the Kazakhstani authorities have so far managed to avoid secondary sanctions

for helping Russia circumvent international sanctions, including a ban on military and dual-use goods.

Ban on protests in support of Ukraine

Despite the "notification nature of peaceful assemblies" and statements by the Kazakhstani leadership

"supporting the territorial integrity" of Ukraine, the Kazakhstani authorities have effectively banned

peaceful protests in support of Ukraine. Since 24 February 2022, Kazakhstani authorities have banned at

least 49 anti-war and single-person actions in support of Ukraine across Kazakhstan.

The Kazakhstani

authorities also persecute participants of peaceful rallies in support of Ukraine.

21, 22, 23, 24, 25, 26, 27

Tokayev is in Putin's debt

During the mass protests that swelled through Kazakhstan in January 2022, the CSTO military force,

actually led by Russia, was brought into Kazakhstan.

Russia has thus shown that it supports Tokayev and

is a guarantor of his presidency in Kazakhstan.

There is an intense level of personal interaction between the Kazakhstani and Russian presidents. Since

Russia's full-scale military invasion of Ukraine in February 2022, Kassym-Jomart Tokayev has made five

visits to Russia, during which he held talks with Putin. Kassym-Jomart Tokayev made his first international

trip after his "re-election" as president of Kazakhstan, in a snap election, to Russia, where he met with

Putin on 28 November 2022.

At the economic forum in Qatar on 21 June 2022 President Tokayev said:

https://ulysmedia.kz/news/16547-my-vynuzhdeny-aidos-sarym-o-prorossiiskom-golosovanii-kazakhstana-v-oon/

https://rus.azattyq.org/a/32176476.html

https://rus.azattyq.org/a/31786312.html

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3247016938950900/

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3235182206801040/

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3242291139423480/

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3241570242828903/

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3243117876007473/

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3232971470355447/

https://en.odfoundation.eu/a/293144,the-aftermath-of-the-bloody-january-crackdown-on-prodemocratic-protests-in-kazakhstan/

https://www.osce.org/odihr/elections/kazakhstan/528966

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

"Yes, Putin is still a reliable ally, and as head of state I am happy to say that I have a close relationship with

Putin.”

It is widely known that Putin is trying to restore a prototype of the Soviet Union. In addition to Ukraine

and Belarus, Putin plans to take control of the Central Asian states. Kazakhstan is as politically controlled

by Russia as Belarus. Kyrgyzstan, Tajikistan, Turkmenistan are highly dependent on Russia, while

Uzbekistan is the least dependent state on Russia.

Putin has worked extensively with President Mirziyoyev since the death of President Karimov to persuade

him to integrate the Russian and Uzbek economies more deeply. Multibillion-dollar contracts have been

signed in a wide range of economic and political spheres. The well-known billionaire Alisher Usmanov,

Putin's confidant, is an ethnic Uzbek whom Putin uses to build a personal and corrupt relationship with

Uzbek President Mirziyoyev. Putin's goal is to gain control over Uzbekistan, as he did over Belarus and

Kazakhstan.

To this end, during Tokayev's visit to Moscow on 28 November 2022, Putin announced a plan to create a

"triple union" of Russia, Kazakhstan and Uzbekistan.

As we know, such a union already exists between

Russia and Belarus. Putin plans to expand this union by incorporating Kazakhstan and Uzbekistan into the

current union with Belarus at the first stage, with other Central Asian states to follow. At that meeting on

28 November 2022 Tokayev publicly stated his agreement to Putin's proposal to create a "triple union" of

Russia, Kazakhstan and Uzbekistan.

News in the Russian media: "Kazakhstani President Kassym-Zhomart Tokayev said he supports the proposal

expressed by Russian President Vladimir Putin to create a kind of triple union of Russia, Kazakhstan and

Uzbekistan, including to resolve issues in the gas sphere"

https://www.rbc.ru/politics/21/06/2022/62b1b6c89a7947b99131a74f

https://www.interfax.ru/world/874551

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

The Kazakhstani authorities tried to deny the political nature of the union and said the issue was about

creating a "triple gas union", but the original Russian media report contained language about creating a

"triple union", "including to resolve issues in the gas sphere".

32, 33

According to experts, Uzbekistan does

not need gas supplies from Russia. Uzbekistan is an exporter of gas to China via Kazakhstan and only needs

a certain amount of gas in winter, which can be covered by deliveries from Turkmenistan. In December

2022, for example, Uzbekistan signed a contract with Turkmenistan for the winter supply of 1.5 billion

cubic metres of gas.

Uzbekistan's Energy Minister rejected the idea of a union, saying: "We

will never agree to political

conditions in exchange for gas".

Kazakhstan's Energy Minister denied the statements of Tokayev’s

spokesman and Kazakhstan's Foreign Ministry, saying there was no discussion of a "gas union".

It thus

demonstrates Putin's intention to create a prototype of the Soviet Union and the willingness of Tokayev

(Kazakhstan) to enter the Union State by giving full control to Putin, in contrast to Uzbekistan, which, for

the moment, claims its own political course.

Russia's takeover of Kazakhstan began long before the start of the 2022 war by creating a common

economic and military space. On 3 September 2021, a memorandum was signed between the Kazakhstani

government and the Russian state-owned company Sberbank (headed by Herman Gref) to transfer to

Sberbank the right to create a digital platform to manage the personal data of Kazakhstani citizens and

the data of Kazakhstani state agencies, including the Ministry of Defence.

Kazakhstan's leadership

deliberately planned to transfer the country's digital sovereignty to Russia.

Kazakhstan helps Russia circumvent Western sanctions

Russia has faced international sanctions - personal and sectoral - the key objectives of which were to

reduce Russia's financial, military-industrial and domestic political resources to continue its war against

Ukraine. One of the most painful consequences of the sanctions for Russia is the ban on exports of military

and dual-use goods to Russia. Kazakhstan has become one of the key states that have engaged in large-

scale state-level support to Russia to circumvent international sanctions.

Kazakhstan's leadership

uses Kazakhstan's state agencies,

including the Ministry of Foreign Affairs, the

National Bank of Kazakhstan, the Agency for Regulation and Development of the Financial Market and the

state holding company Baiterek,

to promote in the West the easing or lifting of sanctions on financial

institutions and instruments,

including Sberbank Kazakhstan, Alfa-Bank Kazakhstan and Mir payment

system.

38, 39, 40, 41, 42

The sanctions have struck a tangible blow to Russia's economy and industry, but have not had as

devastating an effect as expected.

According to Ukrainian intelligence published in November 2022, one

https://tengrinews.kz/russia/troystvennyiy-gazovyiy-soyuz-press-sekretar-tokaeva-raskryil-484581/

https://www.interfax.ru/world/874551

https://www.gazeta.uz/ru/2022/12/16/gas-from-turkmenistan/

https://www.dw.com/ru/uzbekistan-otklonil-predlozenie-zaklucit-gazovyj-souz-s-putinym/a-64024996

https://rus.azattyq.org/a/32172733.html

https://en.odfoundation.eu/a/109524,kazakhstan-surrender-of-technological-sovereignty-to-russia-china-and-a-further-assault-on-civil-society-and-

liberties/

https://ru.sputnik.kz/20221210/byvshuyu-dochku-sberbanka-v-kazakhstane-vyvodyat-iz-pod-sanktsiy--30227589.html

https://kapital.kz/finance/107325/v-eco-center-bank-prokommentirovali-isklyucheniye-iz-sanktsionnogo-spiska-ssha.html

https://www.dw.com/ru/banki-kazahstana-polucili-razresenie-ssa-na-operacii-s-kartami-mir/a-64047616

https://kz.kursiv.media/2022-10-14/ofac-prodlilo-do-konca-goda-srok-zaversheniya-sdelok-s-byvshej-dochkoj-sberbanka/

https://informburo.kz/novosti/alfa-bank-kazaxstan-mozet-vyiti-iz-sankcionnogo-spiska-posle-pokupki-bck

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

of the reasons the effect of international sanctions on Russia has weakened is the help of third countries

to circumvent international sanctions.

Kazakhstan's opposition and civil society have been revealing since the first months of the Russian

invasion how Kazakhstan has become a key state where the "economic rear" is actually deployed. A

process of mass transit of goods and services needed for Russia's economy and industry has been

organised through Kazakhstan with the help of the Kazakhstani authorities.

44, 45, 46, 47, 48

At the same time,

Russia and Kazakhstan have so far successfully misled Western partners through constant disinformation

operations about alleged "differences" between them and "threats of Russian attack on Kazakhstan".

In fact, the level of cooperation between the two states has increased significantly since Russia's military

invasion of Ukraine. Exports of goods from Kazakhstan to Russia rose by 15.1% to USD 5.9 billion.

Particularly noteworthy is the

abnormal growth in exports of machinery, equipment, vehicles,

instruments and devices - an increase by 284.3 %,

and the recent doubling of exports in the "other goods"

category (it is not clear what exactly is behind this category of goods) - the atypical growth in two export

categories indicates the supply of goods that can be used for military purposes, including dual-use goods.

The Belarusian Investigation Centre (BIC), in its new study, reported that timber from Belarus is being

transported to the European Union in circumvention of sanctions - via Kazakhstan and Kyrgyzstan.

The table shows the dynamics of trade between Russia and Kazakhstan

https://nv.ua/world/countries/ukrainskaya-razvedka-nazvala-strany-kotorye-pomogayut-rossii-v-voyne-50282767.html

https://www.facebook.com/mukhtar.ablyazov/posts/pfbid0BvGdYMbLhotTwfvbZaEjrm9MFWunhyMNzgmQwikWjTyF2ZQRuVUw1syNaieh7kaxl

https://www.facebook.com/mukhtar.ablyazov/posts/pfbid02QD5nCiD4uA245LyCjjbPxQhBceN5AawnPSc2zGcNaxsWkvAgQPaNwXfvNKQ6X37Nl

https://www.facebook.com/mukhtar.ablyazov/posts/pfbid04uu88EDxF3K1LejqJH2VtwuMat8yDPPUr5s5cZSyyqMGyRh1gKGoTb2kgSALzJtSl

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3434175103568415/

https://tengrinews.kz/kazakhstan_news/eksport-tovarov-iz-kazahstana-v-rossiyu-vyiros-za-god-485209/

https://rus.azattyq.org/a/32186666.html

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

The BIC found that once sanctions on Belarusian wood products under code 44 - which includes sawn

timber and boards, plywood and chipboard, wood pellets and briquettes - came into effect, exports of

these products from Kazakhstan to the EU increased 74-fold and from Kyrgyzstan almost 18,000-fold

compared to the same period in 2021. This is despite the fact that both countries imposed temporary

restrictions on timber exports. In the EU, the main buyers of Belarusian timber to circumvent sanctions,

according to investigators, were Poland, Lithuania, Latvia, Germany and the Netherlands.

This points to the systemic nature of the assistance of EEU (Eurasian Economic Union) members, namely

Kazakhstan and Kyrgyzstan, in circumventing sanctions not only of Russia but also of Belarus.

3. KAZAKHSTAN STRENGTHENS RELATIONS WITH RUSSIA AMID ITS INTERNATIONAL ISOLATION

Kazakhstan's "new geopolitical reality"

The level of cooperation between Kazakhstan and Russia has increased significantly since Russia's military

invasion of Ukraine. Russia is Kazakhstan's main political, trade and economic partner. Since Russia's

invasion, Kazakhstan's leadership has been convincing Ukraine and the West that Kazakhstan complies

with the sanctions, while actively increasing trade cooperation with Russia, including the export of military

and dual-use goods.

At a time when democratic countries are imposing sanctions against Russia and restricting access of their

goods and services to the Russian market, Kazakhstan is purposefully helping Russia avoid these

restrictions. During a meeting with Putin in May 2022, Tokayev said that despite all the difficulties

"stemming

from current geopolitical realities,"

the goal of the two governments is to increase trade and

economic cooperation.

In August 2022, Tokayev reiterated the rhetoric of the "specific

geopolitical

situation"

and the need for the two governments to "synchronise their watches" in this regard.

By helping Russia circumvent international sanctions, the Kazakhstani authorities are trying to convince

Western partners that they are "strictly adhering" to anti-Russian sanctions:

●

On 29 March 2022, Tokayev's deputy head of administration, Timur Suleimenov, said Kazakhstan

"will comply with sanctions".

●

On 21 June 2022, the Minister of Foreign Affairs of Kazakhstan Mukhtar Tleuberdi attended a

meeting of the Republic of Kazakhstan - European Union Cooperation Council during which the

issue of preventing the negative impact of anti-Russian sanctions on companies from Kazakhstan

was discussed.

●

On 14 September 2022, Foreign Minister Mukhtar Tleuberdi noted that Kazakhstan has

established a governmental working group to prevent the negative impact of anti-Russian

sanctions on Kazakhstan's economy. The group consults with the U.S. and the EU in order to avoid

cases of Kazakhstani companies falling under secondary sanctions.

●

On 16 September 2022, Almasadam Satkaliyev, chairman of the board of the National Welfare

Fund Samruk-Kazyna, said that the fund carefully monitors compliance with sanctions and is ready

https://rus.azattyq.org/a/31854114.html

https://tengrinews.kz/kazakhstan_news/tokaev-vstreche-putinyim-osnovaniy-pessimisticheskih-475850/

https://kaztag.kz/ru/news/timur-suleymenov-v-es-my-sdelaem-vse-vozmozhnoe-chtoby-kontrolirovat-sanktsionnye-tovary

https://tengrinews.kz/kazakhstan_news/kazahstan-obsudil-evrosoyuzom-predotvraschenie-vliyaniya-471432/

https://www.zakon.kz/6024764-putina-v-kazakhstane-zhdut-v-seredine-oktiabria.html

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

to leave all projects that violate the anti-Russian sanctions. According to Satkaliyev, in order to

avoid risks, the fund is in constant close contact with Western partners.

●

On 30 November 2022, Deputy Foreign Minister Roman Vasilenko said that Kazakhstan "does not

allow its territory to be used to circumvent sanctions".

However, the reality shows that Kazakhstan has become an economic rear to circumvent international

sanctions and restrictions that have been imposed on Russia due to the war against Ukraine.

Re-registration and relocation of Russian companies

In the first 2 months of 2022, a flood of foreign companies left Kazakhstan. However, after the Russian

military invasion of Ukraine and the imposition of sanctions against Russia, the number of foreign-owned

companies in Kazakhstan began to rise rapidly. The monthly increase in the number of such companies

was about 4%, whereas in 2021 the monthly increase was only about 1%. This huge surge was due to the

entry of companies from Russia and Belarus. From January to May 2022, the increase in the number of

foreign companies was 2,416, of which 1,566 came from Russia and 120 from Belarus.

In total, some

13,000 companies from the Russian Federation and branches of Russian companies were operating in

Kazakhstan as of May 2022 (out of a total of 40,200 foreign companies). Russian companies that have

relocated to Kazakhstan (so-called "relocated companies") have gained access to international financial

services and free imports of sanctioned goods for Russia.

On 26 May 2022, Tokayev said during a plenary session of the Eurasian Economic Forum that he had

ordered the creation of "the most favoured regime for Russian entrepreneurs".

President Tokayev has

instructed the Kazakhstani government to "prepare a favourable environment for the relocation of foreign

businesses that have ceased operations in Russia", in particular through the financial hub the Astana

International Financial Centre (AIFC).

As of the end of May 2022, some 200 companies from Russia were

registered by the AIFC.

Commenting on Tokayev's initiative, Alexander Shokhin, president of the Russian

Union of Industrialists and Entrepreneurs, said that the creation of joint ventures with Kazakhstan would

allow these companies to be "removed from the threats and risks associated with secondary sanctions".

In July 2022, Kazakhstan's Minister of Industry and Infrastructure Development, Kairbek Uskenbayev, said

that 23 companies worth about USD 8.9bn are planned to relocate from Russia to Kazakhstan. These

companies are focused on such products as electrical engineering and automotive electronics, mineral

fertilisers, locomotive assembly and others. At the moment, 14 projects worth USD 444 million have been

implemented as part of industrial cooperation between Russia and Kazakhstan.

Thus, it allows Russian

companies relocated to Kazakhstan to freely acquire and re-export components and equipment for the

Russian military-industrial complex.

In August 2022, the Prime Minister of the Republic of Kazakhstan Alikhan Smailov said the Kazakhstani

authorities were working to move some 250 companies that left the Russian market to Kazakhstan. "These

https://kaztag.kz/ru/news/samruk-kazyna-obeshchaet-vyyti-iz-narushayushchikh-antirossiyskie-sanktsii-proektov

https://kaztag.kz/ru/news/kazakhstan-ne-pozvolyaet-ispolzovat-svoyu-territoriyu-dlya-obkhoda-sanktsiy-mid

https://tengrinews.kz/kazakhstan_news/rossiyskie-kompanii-pereezjayut-v-kazahstan-statistika-471971/

https://tengrinews.kz/kazakhstan_news/tokaev-rasskazal-poruchenii-rossiyskim-biznesmenam-469531/

https://www.kommersant.ru/doc/5459864

https://www.inform.kz/ru/rossiyskie-kompanii-proyavlyayut-bol-shoy-interes-k-mfca_a3937542

https://24.kz/ru/news/economyc/item/550519-rossijskie-promyshlenniki-rassmatrivayut-uglublenie-kooperatsii-s-kazakhstanom

https://informburo.kz/novosti/relokaciya-kompanij-iz-rossii-minindustrii-gotovit-23-proekta

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

are mostly Western companies in non-resource sectors. We have made a target list, we have given

information that Kazakhstan is interested in them coming to work in our market,"

Smailov said.

"Parallel import"

After the military invasion, major international companies announced that they would cease operations

on the Russian market. In response, the Russian authorities said they would import goods without the

permission of their producers.

In March 2022, the Kazakhstani government announced its intention to abolish the requirement for labels

in Kazakh on imported goods, which would allow the re-export of imported goods from Kazakhstan to

Russia.

In late April 2022, the Russian government legalised so-called "parallel imports" of goods in order

to "meet the demand for goods containing the results of intellectual activity". In effect, smuggling was

legalised in Russia. The Russian Ministry of Industry and Trade has compiled a list of about 200 brands

whose products can be imported into Russia without the permission of the rights holder.

In early May 2022, Yerkebulan Orazalin, head of Almaty's Business and Investment Department, said that

major Russian retailers Magnit and Lenta have asked for help in arranging supplies of goods to Russia from

abroad. "Now

to a greater extent, negotiations are underway to import foreign goods through Kazakhstan.

This is a complicated process associated with a number of international restrictions,"

Orazalin said. The

Kazakhstani government has entrusted the coordination of this process to the Kazakhstani Chamber of

Entrepreneurs Atameken.

On 25 May 2022, reports emerged that major Russian retail chains had started selling appliances from

well-known global brands (Apple, Samsung, PlayStation, Xbox, etc.) imported under parallel import

conditions.

Such equipment first goes to one of the EAEU countries (Armenia, Kazakhstan, Kyrgyzstan)

and then from there to Russia without the consent of the rights holder. According to some reports, the

Russian authorities have consulted with Iranian representatives on how to circumvent Western sanctions

and restrictions. According to Russian media reports, representatives of companies that have left the

Russian market are not opposed to their products entering Russia through other countries.

Through "parallel imports", Russia has begun to import both household appliances, clothing and food

products, as well as cars and car parts. For example, in June 2022, it was reported that Toyota and Lexus

dealers were importing car parts and consumables into Russia through Kazakhstan. "The scheme is simple:

the dealer in Kazakhstan buys a little more for himself and transfers the surplus to Moscow," the source

said.

Some Lexus dealers are importing new vehicles through Kazakhstan. In November 2022, it was

revealed that MAN truck tractors and Schmitz semi-trailers continue to be shipped to Russia with the help

of Kazakhstani companies.

In August 2022, Russian Prime Minister Mikhail Mishustin said during talks with the Prime Minister of

Kazakhstan Alikhan Smailov that the states see "good prospects for the implementation of joint import

substitution programmes". The sides also discussed the supply of "products required for industrial

https://www.kommersant.ru/doc/5526772

https://kapital.kz/economic/103968/v-rk-khotyat-vremenno-otmenit-etiketki-na-gosyazyke-dlya-importnykh-tovarov.html

https://www.cnews.ru/news/top/2022-04-24_vlasti_razreshat_seryj

https://tengrinews.kz/kazakhstan_news/krupnyie-rossiyskie-reteyleryi-hotyat-postavlyat-tovaryi-467822/

https://www.kommersant.ru/doc/5423930

https://www.cnews.ru/news/top/2022-05-25_v_rossii_nachalsya_parallelnyj

https://kaztag.kz/ru/news/dilerov-toyota-i-lexus-ulichili-vo-vvoze-raskhodnikov-i-novykh-avto-v-rossiyu-cherez-

kazakhstan?utm_source=facebook&utm_medium=cpc

https://www.facebook.com/groups/ActivistsNotExtremists/posts/3434175103568415/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

cooperation" and "unimpeded export of goods", which probably implies increased volumes of "parallel

imports".

Between May and August 2022, some USD 6.5 billion worth of goods were imported into Russia under

the parallel import scheme. By early December 2022, more than USD 20 billion worth of goods had been

imported into Russia under this scheme, including "cars, machines, equipment, processing

lines.”

According to Kazakhstan's National Statistics Bureau, in the first half of 2022, electronics exports from

Kazakhstan to Russia increased significantly. For example, exports of mobile phones increased more than

2,000 times, from USD 37,000 to USD 78 million, compared to 2021. Imports of other electronics to Russia

from Kazakhstan - laptops, processors, controllers, memory cards, smart cards, etc. - have also increased

significantly.

According to the Economic Research Institute, between January and August 2022, "exports of televisions,

monitors and projectors increased by 312 times, computers by 215 times and telephones by 88 times".

The EU has expressed concern about the abnormal increase in imports of consumer electronics from the

EU to Kazakhstan and the increase in shipments of white goods from Kazakhstan to Russia, as components

of some goods may be used for "military purposes".

According to official statistics, in 2022 total exports of goods from Kazakhstan to Russia increased by

15.1% compared to 2021 (up to KZT 5.9 billion). The largest increase was seen in exports of machinery,

equipment, vehicles, instruments and devices - by 284%.

One of the largest sites through which parallel imports are carried out has been Russia's largest online

retailer Wildberries. After the launch of parallel imports, the company increased the area of its logistics

centre in Kazakhstan by 2.5 times (up to 10,000 sq. m.) to "give local sellers space to increase their

assortment". Between January and May 2022, sellers from Kazakhstan increased their turnover at the site

by 584%.

Assistance in lifting sanction restrictions for the purchase of Russian subsidiary banks and for the

operation of Russian payment systems in Kazakhstan

International sanctions have been imposed against the largest Russian banks, which traditionally occupy

a significant part of Kazakhstan's banking sector. Kazakhstan's leadership,

through its state agencies

Kazakhstan, including the Ministry of Foreign Affairs, the National Bank of Kazakhstan, the Agency for

Regulation and Development of the Financial Market and National Management Holding Baiterek, has

lobbied the West to ease or lift sanctions against financial institutions and instruments,

including

Sberbank Kazakhstan, Alfa-Bank Kazakhstan and Mir payment system.

79, 80, 81, 82, 83

On 6 April 2022, two

banks owned by Russian shareholders, Sberbank Kazakhstan and Alfa-Bank, came under US blocking

sanctions.

https://kaztag.kz/ru/news/smailov-mishustinu-nam-sleduet-prodolzhat-rabotu-s-uchetom-vzaimnykh-interesov

https://www.rbc.ru/rbcfreenews/63a03d539a794723e774bb17

https://lenta.ru/news/2022/08/18/kzexport/

https://rus.azattyk.org/a/32131171.html

https://www.gazeta.ru/business/news/2022/10/30/18914299.shtml

https://tengrinews.kz/kazakhstan_news/eksport-tovarov-iz-kazahstana-v-rossiyu-vyiros-za-god-485209/

https://oborot.ru/news/wildberries-v-25-raza-uvelichil-ploshhadi-logisticheskogo-centra-v-kazahstane-i161490.html

https://ru.sputnik.kz/20221210/byvshuyu-dochku-sberbanka-v-kazakhstane-vyvodyat-iz-pod-sanktsiy--30227589.html

https://kapital.kz/finance/107325/v-eco-center-bank-prokommentirovali-isklyucheniye-iz-sanktsionnogo-spiska-ssha.html

https://www.dw.com/ru/banki-kazahstana-polucili-razresenie-ssa-na-operacii-s-kartami-mir/a-64047616

https://kz.kursiv.media/2022-10-14/ofac-prodlilo-do-konca-goda-srok-zaversheniya-sdelok-s-byvshej-dochkoj-sberbanka/

https://informburo.kz/novosti/alfa-bank-kazaxstan-mozet-vyiti-iz-sankcionnogo-spiska-posle-pokupki-bck

https://www.forbes.ru/finansy/461649-sberbank-i-al-fa-bank-popali-pod-blokiruusie-sankcii-ssa-cto-eto-znacit

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Deal made in relation to Sberbank Kazakhstan:

The only shareholder of Sberbank Kazakhstan at the time of the sanctions list was the Russian Joint Stock

Company Sberbank of Russia. Its ultimate shareholder is the Central Bank of the Russian Federation.

13 April 2022, Timur Kulibayev, son-in-law of former Kazakhstani President Nursultan Nazarbayev,

purchased part of the loan portfolio of sanctioned Sberbank Kazakhstan through his subsidiary Halyk Bank

(translated as “Peoples'

Savings Bank”).

The deal was valued at more than USD 730 million.

On 30 May 2022, the shareholder of Sberbank Kazakhstan, Sberbank Russia, decided to pay a shareholder

dividend of 99.99% of Sberbank Kazakhstan's net profit, which was approximately USD 300 million).

On 188 August 2022, the Kazakhstani government-backed financial holding Baiterek purchased the entire

block of shares in Sberbank Kazakhstan from a Russian shareholder.

The amount of the deal was not

disclosed, but it should be taken into account: 1) that the capital of Sberbank Kazakhstan at the end of

2021 was about USD 900 million; 2) declared dividends at the end of 2021 amounted to about USD 300

million; 3) 25% of the loan portfolio of Sberbank Kazakhstan was sold for USD 730 million.

This allows

us to conclude that the

amount of the deal exceeds USD 2 billion. Thanks to the efforts of the

Kazakhstani authorities, the Russian economy received this amount.

Since the government is the sole

shareholder of Baiterek holding, the bank was in fact bought out with Kazakhstani taxpayer funds. After

the rebranding, the bank is called

Bereke Bank.

The Kazakhstani authorities are trying to have the renamed bank removed from the sanctions list.

The

active lobbying of the Kazakhstani state agencies for the lifting of sanctions imposed on Sberbank

Kazakhstan is confirmed by the report of the Agency for Regulation and Development of the Financial

Market of Kazakhstan: "The

joint efforts of the Agency, the Ministry of Foreign Affairs of Kazakhstan and

the Baiterek National Management Holding have enabled the extension of the licence term by OFAC to

enable the transaction with Bereke Bank JSC to be completed by 31 December of this year".

Thanks to active lobbying by the Kazakhstani authorities, the Office of Foreign Assets Control (OFAC) of

the US Department of the Treasury issued a general licence which extended the deadline for completing

transactions with Sberbank Kazakhstan JSC by three months, from 13 April 2022 to 12 July 2022.

Subsequently, this licence was extended until the end of 2022. This means that during this period the bank

will continue to operate in a normal mode and its customers will have access to transactions with

https://forbes.kz/ranking/object/7

https://www.google.com.ua/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjyuIal0ov8AhUFqIsKHQ1GB70QFnoECA0QAQ&url=https%3A%2

F%2Fwww.forbes.ru%2Ffinansy%2F462367-narodnyj-bank-kazahstana-vykupil-tret-kreditnogo-portfela-mestnoj-docki-

sbera&usg=AOvVaw1jSOFjZ_ApoRI7gCTY61jk

https://kapital.kz/finance/106005/sberbank-kazakhstan-napravit-99-9-chistoy-pribyli-za-2021-god-na-vyplatu-dividendov.html

https://forbes.kz/ranking/object/7

https://forbes.kz/ranking/object/7#:~:text=%D0%A0%D0%B5%D0%B9%D1%82%D0%B8%D0%BD%D0%B3%20%D0%B1%D0%B0%D0%BD%D0%BA%D0%B

E%D0%B2%20%D0%9A%D0%B0%D0%B7%D0%B0%D1%85%D1%81%D1%82%D0%B0%D0%BD%D0%B0%20(%D0%B8%D1%8E%D0%BD%D1%8C%202022)

&text=%D0%9F%D0%BE%20%D0%B8%D1%82%D0%BE%D0%B3%D0%B0%D0%BC%202021%20%D0%B3%D0%BE%D0%B4%D0%B0%20%D0%94%D0%91,%

D1%81%20%D0%BF%D1%80%D0%BE%D1%88%D0%BB%D0%BE%D0%B3%D0%BE%D0%B4%D0%BD%D0%B5%D0%B3%D0%BE%20%D1%82%D1%80%D0%

B5%D1%82%D1%8C%D0%B5%D0%B3%D0%BE%20%E2%80%93%20378%20%D0%BC%D0%BB%D1%80%D0%B4.

https://kapital.kz/finance/108841/sberbank-kazakhstan-ofitsial-no-pereimenovan-v-bereke-bank.html

https://ru.sputnik.kz/20221210/byvshuyu-dochku-sberbanka-v-kazakhstane-vyvodyat-iz-pod-sanktsiy--30227589.html

https://www.google.com.ua/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwiPxMbV0ov8AhVixosKHdDgBE4QFnoECAgQAQ&url=https%3A%

2F%2Fkz.kursiv.media%2F2022-10-14%2Fofac-prodlilo-do-konca-goda-srok-zaversheniya-sdelok-s-byvshej-dochkoj-

sberbanka%2F&usg=AOvVaw0ttGRYUWPAfDbnMVoxPcrl

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

payments and transfers in tenge and roubles (taxes, duties, social contributions, etc.) without any

restrictions on amounts.

Kanat Sharlapayev, the head of Baiterek Holding, said that the holding plans to sell Sberbank Kazakhstan

(Bereke Bank) after the bank is removed from sanctions and resumes operations. "The dialogue on the

removal of this bank from the sanctions lists in the case of the presence of state shareholders is greatly

facilitated,"

Sharlapayev said. It was thus confirmed that the change of shareholders was needed to

formally lift sanctions against the bank. It is possible that in the future the bank will again be returned to

the former Russian shareholders through shell companies. Sharlapayev made the unusual statement that

preference should be given to foreign investors.

Deal made in relation to Alfa-Bank Kazakhstan:

On 20 April 2022, Kazakhstan-based Bank Center Credit announced the purchase of sanctioned Alfa-Bank

Kazakhstan, a subsidiary of sanctioned Alfa-Bank Russia.

The exact purchase price paid to the Russian

shareholder was not disclosed.

The new owner renamed Alfa-Bank Kazakhstan to Eco Center Bank. The seller's and buyer's websites

explicitly stated that "the measures taken will facilitate the bank's removal from the sanctions lists of the

US and several other countries". Following public criticism on social media by civil society and the

opposition, the message disappeared from the websites of both financial institutions on the same day.

On the morning of 21 April 2022, an updated version of the press release appeared, which no longer

suggested "facilitating" the bank's removal from the sanctions list.

On 6 September 2022, Eco Center Bank announced that it had ceased to exist and merged with Bank

CenterCredit.

As practice has shown, a formal change of ownership has proven to be an effective mechanism for lifting

sanctions imposed on former Russian banks:

•

In July 2022, the US lifted sanctions imposed on Eco Centre Bank.

To get sanctions lifted from the

bank, representatives of the Agency of the Republic of Kazakhstan for Regulation and

Development of Financial Market visited the US, where they "explained" the details of the deal to

the Office of Foreign Assets Control (OFAC).

In the case of the change of Sberbank Kazakhstan's shareholders, the US also accommodated the

new shareholders and extended the licence until 31 December 2022, the deadline for completing

the change of ownership of Sberbank Kazakhstan.

100

•

Kazakhstan is one of the few countries where the Russian Mir payment system operates. In August 2022,

Sberbank Kazakhstan began issuing Mir payment cards. The Bank's customers who issued Mir cards were

able to access most transactions - replenishing and withdrawing cash from ATMs, making payments for

goods and services via POS terminals, and ecom-operations in the network of Mir payment system

https://kapital.kz/finance/106005/sberbank-kazakhstan-napravit-99-9-chistoy-pribyli-za-2021-god-na-vyplatu-dividendov.html

https://tengrinews.kz/money/bayterek-planiruet-prodat-sberbank-kazahstan-477672/

https://tengrinews.kz/kazakhstan_news/bank-tsentrkredit-priobretaet-alfa-bank-kazahstan-466922/

https://rus.azattyq.org/a/31814099.html

https://tengrinews.kz/money/eco-center-bank-obyyavil-o-prekraschenii-svoey-deyatelnosti-477148/

https://frankrg.com/78535

https://rus.azattyq.org/a/kazakhstan-baiterek-sber-sanctioned-bank/32031450.html

100

https://kz.kursiv.media/2022-10-14/ofac-prodlilo-do-konca-goda-srok-zaversheniya-sdelok-s-byvshej-dochkoj-sberbanka/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

partners.

101

In September 2022, the US Department of Treasury expressed its willingness to impose

sanctions on financial institutions that help use Mir cards outside of Russia.

102

The US Department of Treasury acknowledged that such institutions "support Russia's efforts to

circumvent sanctions". Following a warning from the US Department of Treasury, one of Kazakhstan's

largest banks, Halyk Bank, temporarily suspended transactions with Mir payment cards at ATMs.

103

Other

major Kazakhstani banks - VTB, Bereke Bank (formerly Sberbank), Bank CenterCredit - have left the

possibility for Mir cardholders to withdraw money from ATMs. On 6 April 2022, the National Bank of

Kazakhstan said it would not interfere with banks' cooperation with the Mir payment system.

104

On 8 December 2022, through lobbying by the Agency for Regulation and Development of the Financial

Market of the Republic of Kazakhstan, the US Department of Treasury permitted individuals, namely

Russian nationals, travelling to Kazakhstan to continue to use the Mir payment system in Kazakhstan.

105

Circumventing financial sanctions

Deputy Prime Minister and Finance Minister Yerulan Zhamaubayev confirmed that Kazakhstan and Russia

are negotiating the purchase of the Russian share (66% controlling interest) of the Eurasian Development

Bank (EDB) by Kazakhstan in order to prevent sanctions against the EDB.

106

In June 2022, Russian media reported that the Russian Central Bank, the St Petersburg Stock Exchange

and major brokers (notably Freedom Holding Corp.) were considering the idea of creating a separate stock

exchange in Kazakhstan so that Russians could trade in foreign securities through it to circumvent Western

sanctions. The new stock exchange could be created on the basis of the Astana International Financial

Centre. It is also worth noting that Moscow Exchange owns a 13% stake in the Kazakhstan Stock Exchange

(KASE).

107

In October 2022, Ukraine approved sanctions against Timur Turlov and investment company Freedom

Finance Ukraine, which is part of Freedom Holding Corp. headquartered in Almaty. The National Security

and Defence Council of Ukraine has blocked all assets of the company and its clients. The founder and

major shareholder of Freedom Holding Corp. Timur Turlov was born in Russia, but in June 2022 he changed

his citizenship to Kazakhstan. In October 2022, it was announced that the company's Russian assets

(Freedom Finance) were sold to one of its top managers, Maxim Povalishin.

108

Likely, this was Turlov's way

of trying to avoid sanctions. After the sale, the company's corporate ties remained the same, as Russian

Freedom Finance is a participant in Kazakhstan's Freedom Finance JSC.

109

It is worth noting that 91% of

the authorised capital of Freedom Finance Ukraine belongs to Askar Tashtitov, president of Freedom

Holding Corp. After being put on the Ukraine sanctions list, Timur Turlov said that the sanctions were

101

102

https://forbes.kz//finances/finance/v_kazahstane_nachali_vyipuskat_kartyi_mir/?

https://meduza.io/news/2022/09/15/minfin-ssha-prigrozil-sanktsiyami-tem-kto-pomogaet-ispolzovat-karty-mir-za-predelami-

rossii?utm_source=facebook&utm_medium=main&fbclid=IwAR3fRF5U0068YXYg_RQB3ggdH0k2eBx1izak17jqsMBMR5BF4S6-TXJzDDI

103

https://meduza.io/news/2022/09/21/krupneyshiy-bank-kazahstana-perestal-prinimat-karty-mir-v-

bankomatah?utm_source=facebook&utm_medium=main&fbclid=IwAR1RrQJ5nNn_HbdiMvV0VPlFHubp8_OpLhCQORfwsw6iv05qXPq735oMctU

104

https://ria.ru/20220406/mir-1782020251.html

105

https://www.gov.kz/memleket/entities/ardfm/press/news/details/473187?lang=ru

106

https://tengrinews.kz/sng/kazahstan-obsujdaet-sdelku-pokupke-doli-rossii-eabr-vitse-475519/

107

https://frankrg.com/74360

108

https://forbes.ua/ru/money/sanktsii-dlya-eksrosiyanina-yak-vlashtovaniy-kholding-freedom-finance-timura-turlova-vartistyu-35-mlrd-shcho-potrapiv-do-

spiskiv-rnbo-35-mlrd-grn-ukrainskikh-investoriv-zablokovani-28112022-10062

109

https://almaty-ffin.kz/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

imposed "mechanically" and expressed confidence that they would manage to be removed from the

sanctions list in late 2022 or early 2023.

110

Shortly after Russia's military invasion of Ukraine, information emerged about the relocation of top

managers and employees of Russian Freedom Finance to Kazakhstan. It was also reported that the

relocated employees would continue to work with Russian clients and facilitate the transfer of their

brokerage accounts to Freedom Finance Global (a Kazakhstan subsidiary of Freedom Holding Corp.

registered in the Astana International Financial Centre).

111

In November 2022, in one week alone, the volume of trading with the Kazakh Tenge on the Moscow

Exchange increased 3-4 times compared to summer 2022, indicating that Russian businessmen use

payment intermediaries in Kazakhstan to conduct international financial transactions, including the

purchase of sanctioned goods.

112

Military cooperation

In the Russia-Ukraine war Kazakhstan is trying to create a picture of neutrality and does not openly

support either side of the conflict. At the same time, the Kazakhstani authorities, through the Ministry of

Foreign Affairs of the Republic of Kazakhstan and Kazakhstani embassies abroad, actively inform Western

politicians that they fear Russian military aggression and the occupation of Northern and Western

Kazakhstan. However, during the months of full-scale war, cooperation between Kazakhstan and Russia

has only intensified.

Kazakhstan and Russia are members of a politico-military bloc, the Collective Security Treaty Organisation

(CSTO). As such, military cooperation between Kazakhstan and Russia is very close and of strategic

dimension. At the end of 2021, Russia and Kazakhstan signed a program of the strategic military

partnership for 2022-2024. On 17 February 2022, the Kazakh Senate ratified a new treaty on military

cooperation between Kazakhstan and Russia, which was signed back in 2020.

Despite a full-scale war in Ukraine, and alleged fears of Russian military invasion, Kazakhstan continues to

participate in joint military exercises with Russia.

In April 2022, Kazakhstan hosted the Regional Security - 2022 command post exercise of the CIS Common

Regional Air Defence System (CRAS). The aim of the exercise was to practise the use of the forces of the

united regional air defence system of Kazakhstan and Russia. "The main goals and objectives of the joint

exercise are... to practise cooperation in the preparation and conduct of combat operations by troops

(forces) of the Unified Кegional Air Defence System of the Republic of Kazakhstan and the Russian

Federation in the Central Asian region of collective security, and to study problematic issues in the joint

use of troops (forces)," Russian Colonel General Yuriy Grekhov.

113

Kazakhstan participated in exercise Vostok 2022, which took place from 1-7 September 2022 in Russia.

Kazakhstan participates annually in the Army International Games (AIG), an international military

competition organised by Russia. Teams from authoritarian states from around the world traditionally

take part in the competition. In 2022, Kazakhstan not only participated in the competition, but also hosted

110

111

https://kapital.kz/finance/111235/timur-turlov-ukrainskiye-sanktsii-byli-nalozheny-mekhanicheski.html

https://frankrg.com/80575

112

https://rus.azattyq-ruhy.kz/economics/43686-rossiiane-perekhodiat-na-tenge-valiutu-rekordno-skupaiut-na-moskovskoi-birzhe

113

https://ru.sputnik.kz/20220413/kazakhstan-i-rossiya-proveli-sovmestnye-ucheniya-po-pvo-24172035.html

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

some of them on its territory. In August 2022, a joint military special forces exercise between Kazakhstan

and Belarus was held.

114

The exercise was conducted in Kazakhstan.

115

There are three military sites in Kazakhstan that Russia rents and conducts tests of new and advanced

weapons there. For example, the last such test took place on 2 December 2022, when Russia tested a new

missile-defence system rocket at the Sary Shagan test site in Kazakhstan.

116

On 23 June 2022, Russian Defence Minister Sergei Shoigu held

talks with Kazakhstan’s Defence Minister

Ruslan Zhaksylykov and said that "the Russian military sees Kazakhstan as Russia's main strategic ally and

most important partner.”

117

Kazakhstan's Defence Minister said that the treaty on developing military

cooperation between the two states will develop further.

In addition, Russia uses the Caspian Sea water area to launch missiles at Ukrainian territory. In 2018, the

five Caspian states (including Russia and Kazakhstan) signed the Convention on the Legal Status of the

Caspian Sea, agreeing to use the sea for peaceful purposes. Missiles are launched into Ukrainian territory

directly from the airspace, which is controlled by Russia and Kazakhstan, but Kazakhstan has not officially

reacted in any way.

118

In November 2022, Vadym Skibitsky, a spokesman for the Ukrainian Defence Ministry's Main Directorate

of Intelligence, said that Kazakhstan and Uzbekistan were supplying Russia with "American and Japanese

civilian components" needed to build missiles.

119

The Kazakhstani authorities said this information was

untrue. The Security Service of Ukraine revealed that the management of a Ukrainian company "has

established supplies of components for repair and maintenance of the machine-building industry. These

are gears, sectional pumps, hydraulic motors and hydraulic equipment, which are used in military

equipment, among other things".

120

One of the countries through whose territory relevant goods have

been shipped to Russia is Kazakhstan.

Civil society and the opposition in Kazakhstan periodically publish photo and video evidence of military

equipment sent to Russia from Kazakhstan, truck tractors of European manufacturers, which are banned

for re-export due to sanctions. However, the Kazakhstani authorities successfully use verbal denials on

any published facts of arms, heavy equipment transfers from Kazakhstan to Russia. Thus, Kazakhstan itself

refutes its own propaganda that the country observes neutrality and is afraid of invasion of the territory

of Kazakhstan by Russian troops.

121, 122

4. DISINFORMATION OPERATIONS TO CREATE AN IMAGINARY CONFRONTATION BETWEEN RUSSIA

AND KAZAKHSTAN

Kazakhstan, as a member of the Eurasian Economic Union (EAEU) - in which Russia actually leads - plays

an important role in Russia's circumvention of international sanctions. Kazakhstan has successfully used

disinformation campaigns and rhetoric to create and maintain an image of an "independent" or at least

114

115

https://24.kz/ru/news/social/item/561433-armi-2022-kazakhstan-v-trojke-liderov

https://informburo.kz/novosti/specnazy-kazaxstana-i-belarusi-provodyat-uceniya-v-almatinskoi-i-zetysuskoi-oblastyax

116

https://www.rbc.ua/ukr/news/rosiya-provela-kazahstani-viprobuvannya-novoyi-1669971348.html

117

https://function.mil.ru/news_page/country/more.htm?id=12426273@egNews&fbclid=IwAR2dZDk6mp-mLyy9-

FJMfEdswDGW9zAV52P3hlNQlR6DTaxhnp__Tp1Jrfs&mibextid=onnTyB&fs=e&s=cl

118

https://rus.azattyq.org/a/32145041.html

119

https://www.repubblica.it/esteri/2022/10/31/news/ucraina_servizi_segreti_iran_addestra_russi_crimea-372441671/

120

https://sud.ua/ru/news/ukraine/256237-sbu-razoblachila-ukrainskoe-predpriyatie-postavlyavshee-v-rf-zapchasti-dlya-voennoy-tekhniki-foto

121

https://tengrinews.kz/kazakhstan_news/minoboronyi-otvetili-informatsiyu-perevozke-tankov-rossiyu-485611/

122

https://tengrinews.kz/news/kazahstan-otpravlyaet-voennuyu-tehniku-rossiyu-minoboronyi-479037/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

"neutral" from Russia Kazakhstan. The following examples demonstrate how the appearance of

"confrontation" between the two countries has been created and maintained, as well as the image of a

supposedly "independent" from Russia Kazakhstan, which could supposedly be the target of the next

Russian invasion after Ukraine.

Positioning Kazakhstan as a "victim of an alleged attack" by Russia

Kazakhstan and Russia are engaged in a disinformation campaign involving Russian deputies and

propagandists who make provocative and aggressive statements about Kazakhstan.

123,124

The Kazakhstani

authorities use these statements to promote their propaganda in the West as evidence of threats from

Russia. With their help, the Kazakhstani authorities seek cooperation from the West and completely

ignore Kazakhstan's assistance to Russia in circumventing the sanctions. Through such simple

disinformation techniques, the Kazakhstani authorities avoid secondary sanctions.

Information noise to divert attention from the change of shareholders of Russian-sanctioned banks in

Kazakhstan

On 13 April 2022, the Ministry of Defence of the Republic of Kazakhstan stated that Kazakhstan has no

plans to hold a military parade for Victory Day

125

in 2022.

126

On 24 April 2022, Tigran Keosayan, the

husband of Margarita Simonyan, editor-in-chief

of “Russia Today”, responded by publishing a video

message in which he made several statements against Kazakhstan, hinting that Kazakhstan may face

Ukraine's fate.

127

In response, the Ministry of Foreign Affairs of Kazakhstan said that Tigran Keosayan may

be included in the list of persons banned from entering Kazakhstan.

128

In the media clamour of "confrontation", the news that Timur Kulibayev, son-in-law of Nursultan

Nazarbayev, bought a part of the loan portfolio of the sanctioned Sberbank Kazakhstan from a Russian

shareholder on 13 April 2022, went unnoticed.

129

The news that

on 20 April 2022,

Kazakhstan's Bank CenterCredit announced its purchase of sanctioned

Alfa-Bank Kazakhstan, a subsidiary of sanctioned Alfa-Bank Russia, also received little attention.

130

123

124

https://newtimes.kz/mir/157288-rossijskij-politik-obespokoilsya-polozheniem-russkih-v-kazahstane

https://ulysmedia.kz/news/15605-kazakhstan-sleduiushchaia-problema-posle-ukrainy-kak-v-kremle-otreagirovali-na-skandalnye-vyskazyvaniia/

125

A holiday celebrated annually in Russia and in some of the former Soviet Union countries on 9 May to commemorate the victory in the Second World

War. Russian state propaganda uses the holiday to promote the cult of the so-called "Great Victory", which is an important element of Putin's modern

Russian ideology.

126

https://tengrinews.kz/kazakhstan_news/v-kazahstane-ne-budet-voennogo-parada-v-den-pobedyi-466348/

127

https://www.currenttime.tv/a/31825707.html

128

https://russian.eurasianet.org/%D0%BA%D0%B0%D0%B7%D0%B0%D1%85%D1%81%D1%82%D0%B0%D0%BD-%D0%B4%D0%B0%D0%BB-%D0%BE%D1%

82%D0%BF%D0%BE%D1%80-%D0%B2%D0%B8%D0%B4%D0%BD%D0%BE%D0%BC%D1%83-%D1%80%D0%BE%D1%81%D1%81%D0%B8%D0%B9%D1%81

%D0%BA%D0%BE%D0%BC%D1%83-%D0%BF%D1%80%D0%BE%D0%BF%D0%B0%D0%B3%D0%B0%D0%BD%D0%B4%D0%B8%D1%81%D1%82%D1%83

129

https://forbes.kz//leader/hroniki_milliarderov_1650595294/?fbclid=IwAR0hCb3BCEpSf5lYyV4LzJrsWRzt3T1WKvvNTXuqSCx_R4WRsnrURwXyS_w

130

https://tengrinews.kz/kazakhstan_news/bank-tsentrkredit-priobretaet-alfa-bank-kazahstan-466922/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Tokayev's speech at the St Petersburg Economic Forum

On 17 April 2022, as the only leader of a foreign state at the St. Petersburg Economic Forum, Tokayev

declared "non-recognition of the quasi-state territories of Luhansk and Donetsk".

131

In doing so, he

provoked a storm of positive comments from the Ukrainian media, politicians and bloggers, as well as

from Russian opposition and public figures.

132, 133, 134, 135, 136

Many Ukrainian and Russian (opposition)

activists perceived Tokayev's statements as a "slap in the face for Putin". The Russian leadership

responded negatively with statements from Chechen leader Ramzan Kadyrov: "When Kazakhstan began

to lose its sovereignty, who helped? Russia, without fear of sanctions".

137

Konstantin Zatulin, deputy

chairman of the committee of the State Duma for the CIS, also commented on Tokayev's words: "When

no one expects anything from them, they could at least keep quiet".

138

However, the supposed "confrontation" between the Kazakhstani and Russian leaderships did not remain

at the level of rhetoric. To reinforce the picture of "cooling" of relations between Kazakhstan and Russia,

information fakes were spread that Russia had allegedly restricted the shipment of Kazakhstani oil

through the Caspian Pipeline Consortium (CPC), which runs through Russian territory, while Kazakhstan

had allegedly in response blocked 1,700 railcars with Russian coal on Kazakhstan’s territory.

139, 140

After

false news reports spread across Ukrainian and international media, the Kazakhstani authorities denied

reports of blocking 1,700 railcars with Russian coal, as well as reports of alleged restrictions on shipments

of Kazakhstani oil.

141, 142, 143, 144

Refutations were necessary because there was in fact no restriction on the

shipment of Kazakhstani oil and no blocking of railcars with Russian coal; the main goal of creating the

appearance of "confrontation" had already been achieved through the mass distribution of fake news.

Such disinformation techniques have been used systematically over the past year.

131

132

https://www.currenttime.tv/a/tokaev-na-forume-nazval-dnr-i-lnr-kvazigosudarstvennymi-territoriyami/31903169.html

https://www.youtube.com/watch?v=2MEaOnOGmyI

133

https://www.youtube.com/watch?v=r7OfsKLynoo

134

https://www.youtube.com/watch?v=JY9aEkf3I6c

135

https://www.youtube.com/watch?v=h7NGGe_Cb3w

136

https://www.youtube.com/watch?v=MHRhtd79XSc

137

https://lenta.ru/news/2022/06/18/odkb/

138

https://lenta.ru/news/2022/06/18/dnrlnr/

139

https://forbes.kz/process/energetics/rossiya_priostanovila_otgruzku_nefti_cherez_ktk/

140

https://focus.ua/world/519488-kazahstan-zablokiroval-1700-vagonov-s-rossiyskim-uglem-smi

141

https://www.epravda.com.ua/rus/news/2022/08/22/690672/

142

https://tengrinews.kz/kazakhstan_news/soobscheniya-blokirovke-rossiyskogo-uglya-kazahstane-nazvali-471330/

143

https://tengrinews.kz/kazakhstan_news/boepripasyi-dne-situatsii-eksportom-kazahstanskoy-nefti-471333/

144

https://tengrinews.kz/kazakhstan_news/boepripasyi-dne-situatsii-eksportom-kazahstanskoy-nefti-471333/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Examples of news reports on the alleged suspension of Kazakhstani oil shipments through the CPC and the

blockage of Russian coal in Kazakhstan.

On 24 June 2022, it was reported that Russian propagandist Tigran Keosayan was included by Kazakhstan

in the list of "undesirable persons".

145

This move by Kazakhstan was interpreted by Russian propagandists,

and unfortunately by a number of Russian opposition figures and bloggers, as a retaliatory measure for

allegedly restricting the shipment of Kazakhstani oil. The news was published two months after his

statement, and a week after Tokayev's statement at the St Petersburg Economic Forum, which he made

on 17 June 2022.

On 23 June 2022

the head of Agency for regulation and development of financial market Madina

Abylkasymova has informed that Kazakhstani National Management Holding Baiterek

is negotiating

about the purchase of the sanctioned Sberbank subsidiary in Kazakhstan.

146

The deal was made in

August 2022.

Most journalists in Kazakhstan interpreted Tokayev's statements at the St Petersburg Economic Forum as

a demonstration of an independent position from Putin and an expression of support for Ukraine.

However, commenting on Tokayev's speech at the St. Petersburg Economic Forum, Ukrainian Foreign

Minister Dmytro Kuleba cooled down the enthusiasm of Kazakhstani journalists:

"We follow your relations very closely and see that President Tokayev is implementing a policy of

supporting relations with Russia on the one hand, while at the same time defending his country's

sovereignty. But if you have said A, you must also say B. This war is about the violation of the principle of

territorial integrity of the state, which is very important for Kazakhstan. Yes, your president has expressed

a principled position on non-recognition of the LPR and DPR, but Kazakhstan has refused to participate in

the summit of the Crimean platform. Isn't this the same thing?"

147

145

146

https://rus.azattyq.org/a/31912993.html

https://tengrinews.kz/kazakhstan_news/holding-bayterek-vedet-peregovoryi-pokupke-sberbanka-471595/

147

https://exclusive.kz/dmitrij-kuleba-mid-ukrainy-priznaki-gibridnoj-vojny-v-kazahstane-uzhe-est/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

How Kazakhstan avoided sanctions for helping to steal Ukrainian grain

Kazakhstan has been implicated in the scandal surrounding the export of grain from Ukraine, which was

stolen by Russia. The ship Zhibek Zholy, owned by the Kazakhstani company KTZExpressShipping JSC and

leased to the Russian company Green Line LLC, was involved in the export from the occupied port of

Berdyansk of about 7,000 tonnes of grain, which had been stolen by Russia in Ukraine. On 1 July 2022,

Kazakhstan's National Company “Kazakhstan Temir Zholy” stated that the transportation had been carried

out at Ukraine's request. However, this information did not correspond to reality. According to the vessel's

lease agreement, the ship owner had the right to terminate the contract if the lessee was subject to

international sanctions. However, the Kazakhstani company did not do so.

148

In order to divert attention from the topic of facilitating the theft of Ukrainian grain, the topic of

Kazakhstan's possible involvement in overcoming the energy crisis in Europe was launched into the

information space. On 4 July 2022, President Tokayev had a telephone conversation with the President of

the European Council, Charles Michel, and offered to help stabilise the energy market in Europe.

149

The very next day, on 5 July 2022, a Russian court suspended the Caspian Pipeline Consortium (CPC) for

one month, which was seen by many Russian public figures, experts and bloggers as Moscow's response

to Tokayev's offer to help the EU solve its energy crisis.

150, 151

However, the actual violation of Russian law

148

149

https://kaztag.kz/ru/news/perevozka-zerna-sudnom-zhibek-zholy-iz-berdyanska-v-turtsiyu-osushchestvlyaetsya-po-prosbe-ukrainy-k

https://tengrinews.kz/kazakhstan_news/prezident-tokaev-pogovoril-s-glavoy-evrosoveta-472391/

150

The Caspian Pipeline Consortium is the company that operates the oil pipeline through which oil from fields in western Kazakhstan is transported to the

Russian port at Novorossiysk.

151

https://tengrinews.kz/world_news/rossiyskiy-sud-priostanovil-deyatelnost-ktk-na-mesyats-472503/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

that formed the basis of the judgement was charged against the Caspian Pipeline Consortium

as early as

6 June 2022.

152

On 6 July 2022,

the Ministry of Finance of the Republic of Kazakhstan announced that it was tightening

export rules for goods to Russia, and on 7 July 2022 Tokayev instructed to diversify oil export routes from

Kazakhstan, such as developing a trans-Caspian export route that bypasses Russian territory. However,

the actual capacity of the alternative trans-Caspian route is only about 5% of Kazakhstan's total oil

exports.

153, 154

On 8 July 2022, Tokayev signed a decree announcing Kazakhstan's withdrawal from the CIS

(Commonwealth of Independent States) currency committee.

155

Ukrainian and Russian media and

bloggers perceived such measures as a backlash against Kazakhstan in a series of "confrontational"

measures, but the CIS Currency Committee was

abolished back in 2013.

156, 157

On 11 July 2022, the decision to suspend the CPC for one month was commuted to a fine.

158

On 12 July

2022 Tokayev had a telephone conversation with Putin, in which he "expressed his positive assessment

of the prompt interaction of governments to solve urgent issues of economic, transport and logistics

relations between the two countries".

159, 160

On 13 August 2022, the Minister of Energy of Kazakhstan

Bolat Akchulakov said that Kazakhstan did not intend to transport oil bypassing Russia at the moment.

According to the Minister, the main task is to ensure the smooth operation of the Caspian Pipeline

Consortium, which goes through the territory of Russia.

161

Accordingly, there is no real disagreement

between Kazakhstan and Russia.

Apart from the diversion of attention from the topic of Kazakhstan's involvement in the theft of Ukrainian

grain, the news of 5 July 2022 about the planned merger of Kazakhstan's Bank CenterCredit and Eco

Center Bank (previously the sub-sanctioned Alfa-Bank Kazakhstan, which was bought by Bank

CenterCredit and renamed Eco Center Bank) also went unnoticed.

162

152

153

https://forbes.kz/process/nefteprovod_ktk_priostanovil_rabotu_iz-za_resheniya_rossiyskogo_suda/

https://kaztag.kz/ru/news/kazakhstan-mozhet-uzhestochit-pravila-eksporta-tovarov-v-rossiyu

154

https://inbusiness.kz/ru/news/stanet-li-transkaspijskij-marshrut-alternativoj-ktk-i-chto-dlya-etogo-nuzhno

155

https://kapital.kz/finance/107119/kazakhstan-vyshel-iz-soglasheniya-sng-o-valyutnom-komitete.html

156

https://www.epravda.com.ua/rus/news/2022/07/8/689008/

157

https://www.youtube.com/watch?v=T1jzpW6yqS0&t=170s

158

https://tengrinews.kz/kazakhstan_news/rossiyskiy-sud-izmenil-reshenie-po-ktk-472829/

159

https://tengrinews.kz/kazakhstan_news/prezident-tokaev-dal-poruchenie-po-marshrutam-postavki-nefti-472571/

160

https://kaztag.kz/ru/news/tokaev-v-razgovore-s-putinym-polozhitelno-otsenil-vzaimodeystvie-po-ryadu-voprosov

161

https://tengrinews.kz/kazakhstan_news/kazahstan-ne-planiruet-eksport-nefti-azerbaydjan-obhod-rf-475314/

162

https://tengrinews.kz/kazakhstan_news/sliyanie-dvuh-kazahstanskih-bankov-obsudyat-v-avguste-472487/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Increasing Kazakhstan's military budget for defence against Russia?

At the end of July 2022, on the eve of President Tokayev's visit to Russia to meet with President Putin, the

Ukrainian media, quoting the US publication The Wall Street Journal, published the news that Kazakhstan

had increased its military budget by USD 918 million, allegedly because of the threat of Russian attack.

163

In reality, however, the increase in the security budget is not related to the "risk of aggression from

163

https://www.dialog.ua/war/255915_1658743119?s=09

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Russia", but to the need of the Kazakhstani authorities to respond to mass protests by suppressing them

by force. The Kazakhstani authorities decided to strengthen the country's law enforcement agencies in

the aftermath of the January protests, so this increase in funding affects not only the Ministry of Defence

of the Republic of Kazakhstan but also the Interior Ministry and National Guard of Kazakhstan. The bulk

of the funding will go toward increasing the number of personnel, salaries and logistical support as the

security forces prepare to respond to mass protests. The security budget increase came as early as April

2022, during amendments to the law on the republican budget for 2022-2024, but did not become known

to the international community until June 2022.

164

Fake about the cessation of military cooperation between Kazakhstan and Belarus

In July 2022, information began to circulate in Ukrainian telegram channels that Kazakhstan had allegedly

suspended cooperation with Belarus in the field of military education due to Belarus' involvement in

aggression against Ukraine. This news was denied by the Ministry of Defence of the Republic of

Kazakhstan.

165

Fake news about the alleged unwillingness of the Kazakhstani military to co-operate with the Belarusian

army

164

165

https://www.inform.kz/ru/441-mlrd-tenge-predusmotreno-na-povyshenie-boegotovnosti-silovyh-struktur_a3920270

https://tengrinews.kz/kazakhstan_news/rassyilku-prekraschenii-sotrudnichestva-sfere-voennogo-472748/

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

Fake about the cancellation of teaching Russian in Kazakhstani schools

The Kazakhstani authorities have denied plans to close Russian-language classes in Kazakhstani schools.

166

The Russian language curriculum has undergone changes in line with the decision of the Ministry of

Education of Kazakhstan to start teaching Russian in Kazakh language schools from the second grade and

in Russian language schools from the first grade, but there has been no talk of closing Russian language

classes or abolishing teaching Russian.

167

The Russian Ministry of Foreign Affairs stated: "We

have noticed

a sharp increase in fakes concerning Russian-Kazakh interaction. We do not rule out the possibility that

those who want to drive a wedge into relations between Russia and Kazakhstan and create an additional

factor of tension between the good neighbours and also within the multi-ethnic state are behind their

creation".

168

Fake about Kazakhstan's withdrawal from the CSTO

In September 2022, a number of media outlets published news that Kazakhstan would allegedly suspend

its membership in the CSTO as of 1 January 2023. The Ministry of Foreign Affairs of Kazakhstan issued a

denial.

169

The political support of Kazakhstan's leadership for Russia and the CSTO is also confirmed by

the fact that on the day of a massive missile strike on Ukraine, 23 November 2022, Imangali

Tasmagambetov became head of the Collective Security Treaty Organisation (CSTO). Tasmagambetov is

one of Kazakhstan's most influential officials, close to former President Nursultan Nazarbayev.

Tasmagambetov is a former prime minister of Kazakhstan, former mayor of Astana, former defence

minister and former ambassador of the Republic of Kazakhstan to Moscow.

170, 171

Fake news that Kazakhstan is allegedly going to suspend its membership in the CSTO

166

167

https://tengrinews.kz/kazakhstan_news/rassyilku-otmene-klassov-russkim-yazyikom-obucheniya-475452/

https://primeminister.kz/ru/news/prinyat-vse-mery-dlya-bezopasnosti-nashih-detey-alihan-smailov-dal-porucheniya-k-novomu-uchebnomu-godu-

1672543

168

https://kaztag.kz/ru/news/rossiya-zayavila-o-nalichii-zhelayushchikh-vbit-klin-v-ee-otnosheniya-s-

kazakhstanom?utm_source=facebook&utm_medium=cpc

169

https://tengrinews.kz/kazakhstan_news/informatsiyu-vyihode-kazahstana-odkb-prokommentirovali-mid-477946/

170

https://www.pravda.com.ua/rus/news/2022/11/23/7377667/

171

https://informburo.kz/novosti/imangali-tasmagambetov-stal-generalnym-sekretaryom-odkb

OSCE, Alm.del - 2022-23 (2. samling) - Bilag 11: Reports on Kazakhstan Helping Russia Circumvent Western Sanctions - Open Dialogue Foundation

5. RECOMMENDATIONS

●

Immediately shut down Russia's ability to circumvent sanctions through Kazakhstan and other

Central Asian countries in order to achieve the desired result of international sanctions against the

Kremlin;

●

Introduce personal sanctions against individuals and entities, including government officials, who

facilitate the circumvention of sanctions;

●

Implement the recommendations of the European Parliament resolution dated 20 January

2022

172

, particularly the requirement for Kazakhstan to allow UN and OSCE experts to conduct an

international investigation into the role of CSTO troops in suppressing peaceful mass protests in

Kazakhstan in January 2022;

●

Provide political and financial support to independent civil society, the opposition and Kazakhstani

whistleblowers who expose Tokayev's assistance in circumventing international sanctions for the

Kremlin and surrendering Kazakhstan's national interests to Russia;

●

Curb the misuse of inter-state criminal and civil law cooperation instruments, the conduct of illegal

surveillance on EU territory of the opposition and their loved ones; investigate and stop

propaganda attacks aimed at misleading the EU state authorities and achieve politically motivated

extradition of opposition representatives from the EU countries to Kazakhstan, which

systematically expose Tokayev's assistance in circumventing international sanctions for the

Kremlin and surrendering Kazakhstan's national interests to Russia.

172

https://www.europarl.europa.eu/doceo/document/TA-9-2022-0012_EN.html