How Kazakhstan Helps Russia Bypass Western Sanctions
The parallel imports that pass through Kazakhstan to Russia represent a complex equation with variables ranging from the customs union to corruption.
During a recent visit to Germany, President of Kazakhstan Kassym-Jomart Tokayev made several conflicting statements. Tokayev stated that, on the one hand, Kazakhstan will pursue comprehensive cooperation with Russia, while on the other hand, it will adhere to the sanctions imposed against Russia.
Why do these these promises contradict each other? Because it is technically impossible to strictly adhere to a sanctions regime and simultaneously support comprehensive economic cooperation with the sanctioned country. In this case, there is both a customs union and free currency conversion between Kazakhstan and Russia which smooths trade between the two and complicates sanctions enforcement.
Despite Tokayev’s assurances of Kazakhstan’s compliance with the sanctions regime, the country remains an important source of “parallel imports” for Russia.
The table below reflects an anomalous growth in Kazakhstan’s external trade turnover in 2022, which is worth considering closely.
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Rahimbek Abdrahmanov is an economist and coordinator of the Kazakhstan School of Applied Politics (KSAP).
Kamshat Zhumagulova is chief analyst of the Kazakhstan School of Applied Politics (KSAP).