Provisional Deal Reinstates Tax Exemption for Manas Fuel Suppliers
The United States and Kyrgyzstan have reached a provisional solution to a fuel tax dispute that had disrupted re-fueling operations at the Manas transit center near Bishkek.
Following intensive talks between US Ambassador Tatiana Gfoeller and Almazbek Atambayev, the deputy head of Kyrgyzstan’s provisional government, an exemption on tax payments was re-instated on June 5 for Manas fuels suppliers, sources told EurasiaNet. [For background see EurasiaNet’s archive].
The tax deal will remain in effect until at least June 20. After that, additional negotiations may be necessary to make the agreement permanent. The Manas facility is a key logistics hub for US and NATO operations in Afghanistan.
While the tax dispute has been resolved for now, Kyrgyz provisional leaders are still demanding an end to the alleged re-export to Afghanistan of Russian fuel bought ostensibly for the Manas Transit Center. The practice has irked Moscow, the source supplier for much of the fuel used at Manas, to the point the Kremlin introduced a punitive tax on energy sales to Kyrgyzstan. [For background see EurasiaNet’s archive].
Under the terms of the Manas Transit Center leasing agreement, fuel suppliers to the base should be exempt from Kyrgyz customs and taxes.
Article 7 of the agreement signed last year states: “Purchases of goods and services in the Kyrgyz Republic by the US government or on its behalf to implement this agreement are not subject to any taxes, customs fees and similar payments on the territory of the Kyrgyz Republic.”
Kyrgyz leaders are adamant that the tax exemption applies only to fuel used at Manas, and does not cover supplies that are potentially re-exported. [For background see EurasiaNet’s archive].
The company contracted to supply fuel to Manas, Mina Corp, has previously denied any knowledge of the alleged re-export of fuel from Kyrgyzstan. The Kyrgyz provisional government is investigating six Kyrgyz fuel suppliers for potential irregularities. [For background see EurasiaNet’s archive].
Mina Corp and its affiliate, Red Star Enterprises Ltd., are currently the subject of a US congressional probe into fuel contracting practices at the air base. [For background see EurasiaNet’s archive]. The alleged re-exporting of fuel, including to US military bases in Afghanistan, is one aspect of the congressional investigation.
Deirdre Tynan is a Bishkek-based reporter specializing in Central Asian affairs.