This chapter provides a comprehensive overview of Kazakhstan's Trade Facilitation performance and ongoing initiatives to bolster trade facilitation and regulatory integration within its borders. It focuses on strategies and actions undertaken by the government to promote smoother trade operations since 2019. In particular, it spotlights the government’s efforts with respect to information access, guidelines, online trade portals, and data standardisation. It then offers recommendations for Kazakhstan to continue improving its trade ecosystem and furthering regional integration to achieve its ambitions of becoming a transit and logistics hub.
Trade Facilitation in Central Asia
3. Kazakhstan
Abstract
Kazakhstan has progressed in the implementation of an accessible regulatory framework
Kazakhstan has made significant strides in trade facilitation since 2017, making it the regional leader. On average, it performs better than most upper middle income countries worldwide. The most notable areas of improvement concern governance and impartiality, making trade-related information available, advance rulings, simplification and harmonisation of trade-related documents, automation and streamlining of border procedures (Figure 3.1). Kazakhstan scores particularly high on advance rulings, fees and charges, and trade community involvement, and performs better on most remaining dimensions than both regional peers and the average for upper middle-income countries. As in the other Central Asian economies, domestic and international border agency co-operation remains a sticking point for Kazakhstan, though it scores comparatively well in automation compared to its peers.
Figure 3.1. Kazakhstan’s trade facilitation performance since 2017
Note: 2 is the maximum score. Central Asia includes information for Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.
Legend: A - Information availability, B - Involvement of the trade community, C - Advance rulings, D - Appeal procedures, E - Fees and charges, F - Documents, G - Automation, H - Procedures, I - Internal border agency co-operation, J - External border agency co-operation, K - Governance and impartiality.
Source: OECD TFIs database.
The government has expanded information availability on its trade agreements and appeal procedures, improving the operation of its enquiry points, and publishing user manuals on new systems. Guidelines and procedures to govern public consultation processes have been developed and these are increasingly seeking to ensure the involvement of the trade community in the design and day-to-day operation of border-related policies and procedures. To support the internationalisation of firms, Kazakhstan has launched a Single Window for Export-Import Operations, as well as several online trade portals such as the Kazakhstan Trade Portal, the Trade Facilitation Information Portal, and the Automated System of Customs and Tax Authorities (ASTANA-1) customs border portal (Table 3.1) (Atameken, 2019[1]). Becoming operational in 2018, the ASTANA-1 integrated system between Kazakhstan and EAEU member states aims to modernise customs clearance procedures, as well as to streamline and automate customs processes in the Single Window.
Table 3.1. Overview of online single windows and portals for trade in Kazakhstan
Drafts are also increasingly made available before new rules enter into force. The government has been publishing rules on advance rulings, as well as advance rulings of general interest, allowing stakeholders to review them. Parties are granted additional time to contest a decision and to prepare and lodge an appeal.
The relevant bodies have significantly simplified documentation requirements. Kazakhstan has increasingly accepted copies of trade-related documents rather than originals and has reduced the number and complexity of required documents following periodic reviews. Pre-arrival processing has become progressively more available to traders by electronically lodging documents in advance. The government has improved the customs administration risk management system and has taken important steps to introduce an Authorised Operators (AOs) programme, which contributed to the streamlining of border procedures since the TFA’s entry into force.
Kazakhstan has intensified domestic co-ordination and harmonisation of data requirements and documentary controls among agencies involved in cross-border trade. This has been complemented by increased real-time availability of pertinent data among domestic agencies. Progress is also being achieved in setting the basis for the co-ordination of risk management systems implemented by various agencies, including through shared results of inspections and controls. Nevertheless, the absence of a generalised electronic exchange of data between Kazakhstan and neighbouring countries results in duplication of effort. For instance, in interviews conducted by the OECD, interviewees indicated that freight shipments frequently repeat the same procedures when shipping goods from China through Kazakhstan and the Caucasus. Moreover, truck drivers need to carry a large amount of paper documentation with them and undergo lengthy border queuing times and controls that could be avoided if electronic exchange of data were to function properly (OECD, forthcoming[10]).
Trade agreements and international cooperation drive growing demand for more and better exchanges of regulatory and trade facilitation information, which in turn require more complex applications. Business communities involved in international trade (trucking companies, air cargo, forwarders, traders, and so forth) will continue to want digitalisation as the basis of business transactions, including regulatory control and logistics processing systems that use electronic documentation. The increased sophistication of port community systems represents an opportunity for border management agencies to harness the data for improved control and trade facilitation.
Kazakhstan would benefit from further developing more accessible and inclusive trade facilitation mechanisms at a regional level
Advances in the implementation of regulatory frameworks for trade facilitation need to be complemented by progress in operational practices on the ground. For instance, Kazakhstan is not part of the pilot interconnection of national customs systems within the e-TIR system, which has been fully implemented by Azerbaijan, Georgia, and Uzbekistan (UNECE, 2023[11]). In governance and impartiality, the framework should cover aspects such as a strengthened application of an ethics policy or a code of conduct across border agencies, and clearer provisions for the financing of the customs administration.
The authorities should improve trade community feedback by informing businesses of trade-related information, decisions, and legislation. The government should develop outreach tools such as improved publication of applicable legislation on the websites of relevant public bodies (key among which are QazTrade, the MTI and the customs authorities), as well as on the diverse trade portals. This information could be complemented by interactive thematic pages for businesses, and the development of online and physical enquiry points. Kazakhstan could develop institutional feedback mechanisms through regular meetings to discuss implementation issues on customs procedures and regulatory and legislative changes. Online reporting tools or regular surveys could also be developed and channelled through Atameken, regional and sectoral business associations (OECD, forthcoming[12]).
Developing a dedicated interactive page for professional users and companies would help address knowledge gaps. Kazakhstan could more frequently publish applicable legislation online, improve information on penalty provisions and appeal procedures and enhance it with customs classification examples. It could introduce systematic notice-and-comment procedures using the most relevant channels to reach concerned businesses. Improving the timelines of enquiry points and appeal mechanisms by avoiding undue delays would facilitate dialogue and build confidence, which could be further supported by broadening feedback mechanisms to involve the trade community.
Kazakhstan should further develop its Single Window data content and data structure, as well as the surrounding legal framework and its technological architecture. This would allow it to further advance consistent, predictable, simple, and transparent customs and border procedures. It should develop the AO programme and advance post-clearance audits. Harmonising trade documents with international standards and at the regional level would boost connectivity. The authorities could also look to streamline procedures for expedited shipments. Continuing work on improving and expanding the Single Window – in its ports and elsewhere – would help smaller businesses to overcome informational and knowledge barriers, as Japan has done (Box 3.1). On-going efforts to facilitate electronic data exchanges would streamline trade processes (ADB, 2021[13]). For instance, an electronic data interchange in the Caspian Sea could benefit from a global transit document and digital support solutions, while the implementation of a Trans-Caspian port community system could be studied (USAID, 2022[14]). Kazakhstan is being supported by the International Maritime Organisation to accede to the Convention on Facilitation of International Maritime Traffic, which is a treaty aimed at achieving efficient maritime transport and smooth transit in ports of ships, cargo, and passengers. Adopted in 2022, the treaty will enter into force on 1 January 2024 and make the single window for data exchange mandatory in ports (IMO, 2023[15]). As OECD interviews indicate that some shippers and firms prefer offline administration, the relevant bodies could provide fiscal and nonfiscal incentives to encourage the digital filing of certificates by the traders to reduce dwelling time for cargo at the trading gateways.
Box 3.1. Japan’s maritime one-stop shop
The Nippon Automated Cargo Clearance System (NACCS) is an integrated national Single Window system that grew iteratively:
it started as an air cargo clearance system before expanding to air and sea
it was a database with direct data connectivity to all public and private sector users
it grew to a virtual Single Window with electronic data and web interfaces, integrating Food Sanitation, Animal and Plant Quarantine and Trade requirements
it resulted in an informational one-stop shop run by a private firm but developed jointly by the government and private sector, including Customs, Immigration, Quarantine, Food Sanitation, Harbour Master, Port Authority, Coast Guard, local government, and the Trade Control Office.
A critical success factor was the inter-agency co-ordination that enabled the integration of the relevant administrative systems for border services to cut costs and enhance user convenience. A significant step in this project was the simplification of maritime reporting data. After harmonisation, the requirements were reduced to only eight standardised forms for formalities and landing, and only one common form for pre-arrival procedures. Thanks to harmonisation with the World Customs Organisation (WCO) Data Model, the total number of forms was reduced from 24 to 9, and the number of data elements reduced from around 600 to around 200 standardised WCO elements in line with the WCO Data Model.
Streamlined and digitalised port processes can help reduce the maritime time and cost burden. Simplification can target authorisations for ship arrivals and departures, boost efficiency by cutting the amount of idle time at berth, and enhance control and monitoring of vessel movements by registering all arrivals and departures in the electronic platform. In interviews during the OECD study visit to Aktau, interlocutors stressed the importance of connecting government and port digitalisation plans with state bodies through platforms such as the egov OSS (OECD, 2023[19]). The government could move to fast-track the paperwork for entering and leaving ships and reduce duplication of administrative processes for ships that return to port multiple times a month using the same routes. As the vessels in the Caspian Sea are usually well known by port authorities, especially those on routes like Aktau-Makhachkala or Aktau-Alat, this should be relatively quick to implement. Interviews also indicate that the customs risk management system may be too time intensive, as 100% of containers are scanned using a mobile scanning complex instead of 5% as used to be the case in the port of Aktau and is currently the case in Russia’s Novorossiysk port (OECD, 2023[19]).
Kazakhstan should step up implementation of broader regional standardisation of requirements. For instance, OECD interviewees have indicated that compliance with weight and dimensional parameters for trucks can be a challenge in Central Asia, as they are set on a national basis. They can conflict with the regulations of neighbouring countries, and in particular axle load restrictions can be implemented for several months a year to prevent accelerated deterioration of roads (OECD, forthcoming[10]). The implementation of visa requirements for drivers and actual documentation requirements can vary between Kazakhstan and its partners in the EAEU, Central Asia, and other regional neighbours. Regional standardisation is especially important considering Kazakhstan’s role as a transit country and its ambitions to become a regional transport and logistics hub. Closing the remaining implementation gap will help Kazakhstan’s firms engage more in international trade and enable the government to continue deepening regional integration.
Kazakhstan could focus on liberalising its services trade regulation and rationalising regulation in logistics and related services sectors as well as aligning it with regional neighbours and with its international commitments under the WTO (OECD, forthcoming[20]). Similarly, the government should continue advancing effective regional integration by developing interconnected transit information systems with other countries in the region and harmonising customs documents and requirements. As systems are connected domestically and internationally, Kazakhstan should ensure that the border controls of agencies other than customs are supported by risk management systems. As Kazakhstan aims to become a logistics, transit and transport hub, it can consider developing transit procedures in collaboration with neighbouring countries, such as Turkmenistan (see Chapter 7 for a case study).
References
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