Smuggling of goods from China and Turkey through Kyrgyzstan didn't decrease in 2018, which causes concern in the Eurasian Economic Union countries. In order to prevent mass smuggling of goods, anti-corruption public fund Transparency Kazakhstan proposes to introduce joint customs control at the customs posts of the EAEU countries.
Authorities of Kazakhstan have repeatedly accused Bishkek of mass smuggling of goods from China and Turkey into the EAEU countries, which includes both republics, as well as Russia, Belarus and Armenia. This problem first caught attention of authorities in 2017, when then Kyrgyz President Almazbek Atambayev accused head of Kazakhstan, Nursultan Nazarbayev, of interfering with election campaign in Kyrgyzstan. Deterioration of relation between two countries resulted in strengthening of border control and accusations of smuggling of Chinese goods. According to estimates of Prime Minister of Kazakhstan Bakytzhan Sagintayev, the EAEU lost $1.8 billion from smuggling. Kazakhstan in particular suffered biggest losses in the amount of $212 million. In addition, Kazakh Prime Minister criticized Bishkek for actions that resulted in reduction of imports from China. As evidence, he cited difference in economic performance of the two countries: "According to China's foreign trade statistics, exports from China to Kyrgyzstan in 2015 amounted to $4.3 billion. Whereas according to statistics from Kyrgyzstan, imports amounted to $1 billion. Discrepancy is $3.3 billion, and in 2016 it amounted to $4,1 billion." Kyrgyz officials explained this discrepancy by difference in counting methods.
According to the Transparency Kazakhstan press service, since Kyrgyzstan’s accession to the EAEU and up to 2020, republic’s share in the EAEU customs duties will be around 1.9%. This figure is higher than tariffs paid by Kyrgyzstan, so it seems that Russia, Kazakhstan and Belarus sponsor Kyrgyz budget at the expense of their own customs earnings. This, as Kazakh experts emphasize, doesn't prevent Kyrgyzstan from concealing part of its own customs earning, which it got thanks to massive smuggling from China and Turkey.
Head of the Eurasian Analytical Club, Nikita Mendkovich, told Vestnik Kavkaza that introduction of cross-border control is a relevant idea, which has been long overdue. "This decision was discussed a year ago, during border crisis between Kyrgyzstan and Kazakhstan. During negotiations in Minsk presidents of the two countries had an oral agreement on implementation of such measures. Initiative was also supported by head of the Russian Federation Vladimir Putin, who spoke in favor of creating joint customs control systems at the borders of the Union. From practical point of view, this will be a very helpful step, which will allow to prevent smuggling at the borders of Kazakhstan, as well as Kyrgyzstan's borders with China, Turkey and a number of other states," expert stressed. According to him, scale of this problem was discussed in detail in the Transparency International report. "Indeed, according to estimates of foreign researchers, in Kazakhstan, goods worth up to $50 billion aren't regulated by Kazakh Customs Service. Kyrgyzstan's losses also reach tens of billions of dollars. This problem must be dealt with, especially since it affects economies of both states," expert noted. He recalled that Kyrgyzstan is experiencing difficulties with state budget, and introduction of more thorough and more complete control would help at least partially help to deal with current situation. "In addition, such initiative would only strengthen the EAEU, allowing it to make trade flow transparent and equal," Mendkovich said.
On the other hand, Kazakh political analyst Aydos Sarym believes that problems like current one will undermine legitimacy and necessity of the EAEU. “In reality, no one is interested in breaking existing balance. Without it, there will be new political shocks in Kyrgyzstan,” Aydos Sarym told Vestnik Kavkaza. According to him, similar problems existed everywhere, including in Kyrgyzstan, Kazakhstan, and Belarus. “During creation of the EAEU, there were proposals to jointly install necessary equipment, conduct joint customs control. But at that time it seemed irrelevant. Kyrgyzstan joined the EAEU later, it's a new and less disciplined member of the organization. I'm absolutely sure that they knew what kind of problems will Kyrgyzstan bring. Usual model is being broken today. It will continue to break until Kyrgyz authorities improve customs system and so that partner countries won't have to deal with issues like that," he said. In his opinion, introducing cross-customs control in current conditions of populism in Kyrgyzstan will be problematic. "If there was an internal request for construction of proper economy, then there would be elites who would fulfill this request. But I'm afraid that populist slogans will prevail, so we shouldn't expect anything," expert noted.
