US embassy cable - 05ALMATY2589

UNCLAS  ALMATY 002589 
 
SIPDIS 
 
DOE FOR DOE/NNSA, J. MCKISSON 
STATE FOR EUR/PRA 
CD&TR FOR BOREN 
DTRA FOR FOSTER 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ENRG, KNNP, KZ, ECONOMIC, Energy 
SUBJECT:  KAZAKHSTAN: APPROVAL OF TAX- AND DUTY-EXEMPT DOE 
SHIPMENT TO ULBA METALLURGICAL PLANT 
 
REF: A) 6/1/05 Mennuti-McKisson email B) 04 State 185113 
 
1. (SBU) Summary:  Ten months after the U.S. first requested 
confirmation of tax and customs exemptions for a DOE 
shipment to the Ulba Metallurgical Plant (Ref B), the MFA 
has forwarded a letter from the Tax Committee stating that 
the shipment will be exempt.  End summary. 
 
2. (SBU) On June 24, Embassy Almaty received dipnote 09/1- 
3/2530 from the Ministry of Foreign Affairs, transmitting a 
copy of a May 3 letter from N. Usenova, Vice-Chairman of the 
Tax Committee, Ministry of Finance, to Vladimir Shkolnik, 
Minister of Energy and Mineral Resources, regarding 
Shkolnik's January 12 request that the Tax Committee exempt 
a proposed DOE shipment of equipment to the Ulba 
Metallurgical Plant from all taxes and customs duties.  The 
letter confirmed that the shipment would be exempt from tax 
and other compulsory payments to the budget. 
 
3. (SBU) Embassy translation follows: 
 
//BEGIN TEXT OF TRANSLATION// 
 
May 3, 2005 
 
From the Tax Committee of the Ministry of Finance of the 
Republic of Kazakhstan 
 
To the Ministry of Energy and Mineral Resources of the 
Republic of Kazakhstan 
 
The Tax Committee of the Ministry of Finance of the Republic 
of Kazakhstan, having examined the letter of the Ministry of 
Energy and Mineral Resources of the Republic of Kazakhstan 
from January 12, 2005 # 10-04-178 concerning exemption from 
tax and other compulsory payments to the budget of equipment 
for accounting and control of nuclear materials delivered by 
the U.S. Department of Energy for the Ulba Metallurgical 
Plant and on the basis of the letter of the Ministry of 
Foreign Affairs of the Republic of Kazakhstan from April 20, 
2005 #10/2-1-967, notifies the following. 
 
The agreement between the Republic of Kazakhstan and the 
U.S. concerning intercontinental ballistic missile silo 
launchers disposal, incident damage control and prevention 
of nuclear weapons proliferation from December 13, 1993 
(further as Agreement) was ratified by the Law of the 
Republic of Kazakhstan of June 3, 2002. 
 
In accordance with Article II of the Agreement, each Party 
appoints an Executive body to implement the Agreement. The 
Ministry of Defense of the RK is the executive body for the 
Republic of Kazakhstan, and the U.S. Department of Defense 
is the executive body for the U.S. 
 
The aims of the Agreement are the destruction of 
intercontinental ballistic missile silo launchers; taking 
measures to prevent the proliferation of nuclear weapons, as 
well as related technology, material, technical devices, and 
know how from the Republic of Kazakhstan; enhancement of 
emergency response capability in connection with the 
withdrawal of nuclear weapons from RK for destruction; and 
rendering other assistance connected with the elimination of 
strategic offensive arms in the Republic of Kazakhstan. 
 
According to Point 1 of Article III of the Agreement, to 
achieve the outlined goals, the Parties will conclude via 
their executive bodies agreements on implementation, 
ratification of which has not been determined by the 
Agreement. 
 
Within the framework of implementing the Agreement, an 
interagency agreement was concluded between the Ministry of 
Defense of the RK and the U.S. Department of Defense on 
December 13, 1993 concerning the control, accounting, and 
physical protection of nuclear materials to support the 
prevention of nuclear weapons proliferation, which is an 
implementing agreement. 
 
Consequently, the implementing agreement concluded by the 
Executive bodies of the Parties and aimed at the realization 
of the goals stated in Article I of the Agreement comes 
under the provisions of the Agreement. 
 
 
Point 2 of Article IX of the Agreement states that the U.S. 
can bring into the RK any material and technical devices 
which are necessary for implementation of the Agreement. 
 
According to the letter, the U.S. Department of Energy plans 
at the request of the International Atomic Energy Agency 
(IAEA) to provide the Ulba Metallurgical Plant with 
equipment for the accounting and control of nuclear 
material.  The Ministry of Energy and Mineral Resources of 
the Republic of Kazakhstan also notes that this delivery is 
taking place within the framework of the implementing 
agreement. 
 
On the grounds of the abovementioned, delivery of the 
mentioned equipment by the U.S. Department of Energy is 
subject to exemption from tax and other compulsory payments 
to the budget. 
 
First Vice-Chairman of the Tax Committee of the Ministry of 
Finance of the Republic of Kazakhstan N. Usenova 
 
//END TEXT OF TRANSLATION// 
 
4. The dip note will be emailed to EUR/CACEN, EUR/PRA, and 
DOE. 
 
 
ORDWAY 
 
 
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