A customs union is still several months away from taking effect, but Russia already seems to be exerting influence over Kazakhstan’s trade. Concerned that its own market will become flooded with smuggled Chinese goods, Moscow is pressuring Astana to tighten controls at the Kazakhstani-Chinese border before July 1, when Russia is due to remove its checkpoints along its frontier with Kazakhstan.
Highlighting the existing problem with tariff evasion, Kazakhstani authorities on April 28 arrested the head of customs at Khorgos, the main entry point for imports from China, and a deputy head of the KNB, Kazakhstan’s successor to the KGB. The arrests were part of an effort to smash a $130-million smuggling ring. Arrest warrants have been issued for 14 others.
The smuggling ring allegedly earned more than $5 million a week by illegally importing cars, Murat Zhumanbai, a spokesman for the Financial Police, said during a May 3 news conference. “This was an organized criminal group, consisting of more than 100 people, which has for a long time dominated the smuggling of goods from China.”
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