Kyrgyzstan Complicates Re-Export of Goods to Russia

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Re-exporting goods to Russia from third countries through Kyrgyzstan are to become more expensive due to a new rule implemented by the National Bank of the Kyrgyz Republic (NBKR). The new protocol prohibits banks from making payments for goods intended for foreign countries without actual delivery to the territory of Kyrgyzstan.

The rule came into force on September 25 and effectively closed the channel of transit payments for goods from third countries to Russia through Kyrgyzstan.

The move is seen as a response to requests from international financial institutions. It might be instrumental in putting an end to Russia’s practice of avoiding Western sanctions imposed due to Russia’s war in Ukraine.

The new NBKR rule would also benefit the Kyrgyz economy, as re-exported goods must now be delivered to Kyrgyzstan and subject to Kyrgyz customs duties and taxes.

According to Russian media reports, Russian importers have already encountered difficulties associated with the new requirement to transport goods through Kyrgyzstan, and the corresponding customs and tax costs, which makes re-export less profitable.

The NBKR requirement does not extend to the Trading Company, established by the Cabinet of Ministers of the Kyrgyz Republic on August 23. Wholly state-owned, the company oversees trade flows involving Kyrgyz firms that re-export goods without physically delivering them to Kyrgyzstan.

The Trading Company has the exclusive right to carry out trade operations without actual delivery to Kyrgyzstan. Companies that previously carried out trade without delivery to the Kyrgyz territory must carry out operations through the Trading Company.

Also, the NBKR rule does not apply to deliveries made through e-commerce marketplaces for personal use.

Sergey Kwan

Sergey Kwan

Sergey Kwan has worked for The Times of Central Asia as a journalist, translator and editor since its foundation in March 1999. Prior to this, from 1996-1997, he worked as a translator at The Kyrgyzstan Chronicle, and from 1997-1999, as a translator at The Central Asian Post.
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Kwan studied at the Bishkek Polytechnic Institute from 1990-1994, before completing his training in print journalism in Denmark.

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