JPMorgan - KASE

International Organizations and International Relations
Kazakhstan’s Position in the International Community
Kazakhstan has established diplomatic relations with over 120 countries. Kazakhstan is a full
member of the United Nations, the International Monetary Fund (the “IMF”), the World Bank,
the United Nations Educational, Scientific and Cultural Organization, the International Atomic
Energy Agency, the EBRD, the Asian Development Bank, the International Development
Association, the Multilateral Investment Guarantee Agency, the IFC, the International
Organization of Securities Commissions and the Islamic Development Bank, although its voting
rights in some of these organizations or agencies thereof have been suspended pending payment
of overdue contributions. Kazakhstan has observer status with the World Trade Organization and
the Government is actively pursuing full membership, expecting to achieve this within the next
few years.
In 1994, Kazakhstan agreed to an economic stabilization program with the IMF supported by a
one-year Standby Agreement (“SBA”). A second one-year SBA was signed in June 1995 after
agreement on the terms of a Systemic Transformation Facility (“STF”). Both the SBAs and the STF
were substantially utilized. In July 1996, Kazakhstan entered into an Extended Fund Facility
(“EFF”) under which SDR309,400,000 was available for borrowing. The available period for the
EFF expired in July 1999 with almost half of it undrawn. The Government and the IMF signed a
new three-year SDR 329.1 million EFF in December 1999. To date, no amounts have been drawn
under such EFF.
In January 1995, Kazakhstan signed a Partnership and Co-operation Agreement with the
European Union (“EU”), which came into force on 1 July 1999. Kazakhstan also cooperates with
the EU in various scientific and environmental programs. In May 1994, Kazakhstan joined NATO’s
Partnership for Peace Program. Peacekeeping exercises took place during September 1997 in
Kazakhstan and Uzbekistan, with the participation of 1,400 troops from the United States, Russia,
Kazakhstan, Uzbekistan, The Kyrgyz Republic, Turkey, Georgia and Latvia. In June 1998,
Kazakhstan participated in peacekeeping exercises in the United States, together with 15 other
states. Peacekeeping exercises also took place in the autumn of 1998 in Kazakhstan, Uzbekistan
and The Kyrgyz Republic. Further peacekeeping exercises took place in the second quarter of
1999 in the United States with forces from the United States, Russia, Kazakhstan, Uzbekistan, The
Kyrgyz Republic, Turkey, Georgia and Ukraine participating.
As of 30 June 2002, Kazakhstan had signed double taxation treaties with 36 countries, of which
33 have been ratified, including those with the United States, Russia, the Netherlands and the
United Kingdom.
Kazakhstan and CIS Cooperation
Kazakhstan, Russia and Belarus entered into the CIS customs union in January 1995 which, among
other things, provides for the removal of trade restrictions between the signatory countries and
establishes a common external tariff. The Kyrgyz Republic joined this customs union in March
1996 and Tajikistan joined in February 1999. In October 2000, all five member states of the CIS
customs union signed a treaty establishing a new Eurasian Economic Union on the basis of the CIS
customs union. The policy of the Kazakhstan Government advocates further economic cooperation
with other CIS countries. In July 1994, Kazakhstan, The Kyrgyz Republic and Uzbekistan
signed an agreement to establish a multinational bank, the Central Asian Bank, and an
intergovernmental council of prime ministers, foreign ministers and defense ministers. In June
1995, Kazakhstan ratified a treaty on the creation of a single economic zone between
Kazakhstan, The Kyrgyz Republic and Uzbekistan in order to promote free trade, movement of
capital and work force and to harmonize credit, budget, tax, price, customs and currency policies.
The treaty is still in the process of being implemented. In March 1998 at a meeting of the heads
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