OREANDA-NEWS. November 28, 2007. The World Bank’s Board of Executive Directors on November 27 approved a USD 18.5 million loan for the Kazakhstan Customs Development Project, the bank's press service reported. The project will help reform and modernize customs administration in Kazakhstan by increasing revenue collection, improving transparency of customs operations and promoting the use of internationally accepted practices.

"The Government of Kazakhstan ’s vision of customs reform is embodied in the Triennial Program for Customs Modernization and was set out in several speeches of President Nazarbayev. Through this Project, the Bank will support the transformation of the Customs Control Committee into a modern service-oriented agency, with international standards in customs processing, significant emphasis on staff training and combating corruption, and use of the latest technology," said Sergei Shatalov, World Bank Country Manager for Kazakhstan. "Modernization of customs is an integral part of the overall administrative reform that the Government is pursuing, and we hope that this Project will make a tangible contribution in this area," he added.

The Government of Kazakhstan's focus on customs reform over the last several years has led to strengthening of the legislative base, increases in revenue collection, and the simplification of customs procedures. As a result, the average customs tariff in Kazakhstan is less than 10 percent, the country has eliminated almost all export taxes, and there has been a recent reduction in tariffs for food and other products. However, the customs development agenda remains large. According to the latest World Bank report "Connecting to Compete" which measures effectiveness of trade logistics in various countries, Kazakhstan is on the 139th place out of 150 countries in the area of customs effectiveness.

The project, with an overall value of USD 62 million, is co-financed by the Government of Kazakhstan in the amount of USD 43.5 million, and has three main components.

The first component will support institutional development of the Customs Control Committee, including enhancement of the overall organizational structure, design of the training programs, introduction of a merit-based human resource management system and an effective anti-corruption framework, and implementation of a solid cost-based financial management system to regulate and monitor the cost of customs services – the latter is a requirement for WTO accession.

The second component will: finance activities to align existing legislation with best international practices; introduce integrated tariffs; support the implementation of faster cargo control and declaration processing regime; strengthen law enforcement functions; and improve interaction and collaboration of customs officials with other border control agencies both within Kazakhstan and with neighboring countries. In addition, a comprehensive review and rationalization of all import, export, and transit procedures and documentation across government agencies will be conducted.

The third component will finance development of the Information and Communications Technology system based on proven technologies used in modern customs administration and customized for Kazakhstan ’s conditions.
 
Project implementation and the achievement of project objectives will be overseen by a Project Steering Committee which will be chaired by the Minister of Finance, and will include key stakeholders, both in the private sector and related government agencies.

The World Bank loan supporting this Project has a maturity of 15 years, including a five-year grace period.

Kazakhstan joined the World Bank in 1992. Since then, commitments to the country total more than USD 2 billion for 30 projects.