Meeting with Minister of Trade and Integration B. Sultanov

On 15 October 2021, a meeting took place between BeNeLux Chamber of Commerce President D. Van den Weghe and Minister of Trade and Integration of Kazakhstan B. Sultanov, at which the main areas of bilateral cooperation were discussed.

D. Van den Weghe presented the Chamber's main areas of activity and noted that its Board of Directors includes representatives of companies such as Shell, Arendt & Medernach, Eurasian Resources Group, ArcelorMittal and FoodVentures.

The Chamber's President also drew attention to the overall trade turnover between the BeNeLux countries and Kazakhstan, which from 2017 to 2019 amounted to around €15.2 billion. Foreign direct investment from the BeNeLux countries since 2005 has totalled more than €68.9 billion.

Background: The Chamber's key areas of activity are sectors in which the BeNeLux countries are leaders, and which will therefore help diversify Kazakhstan's economy through technology transfer — sectors such as agriculture, infrastructure and logistics, renewable energy, the environment, aerospace, telecommunications services, mechanical engineering, and fintech products and services.

Minister B. Sultanov, for his part, noted that as part of the goods-distribution infrastructure, the Ministry is working to build two agro-logistics centres and seven wholesale distribution centres. These multifunctional centres will form a system of modern wholesale fruit and vegetable markets, thereby optimising delivery logistics.

In this regard, B. Sultanov expressed interest in building a partnership with the Belgian company BelOrta, including the possible application of its best practices.

Being personally acquainted with BelOrta's chief executive Philippe Appeltans, D. Van den Weghe explained that this group of companies (BelOrta Food & Vegetables, BelOrta Chef, BelOrta Bio, Flandria), bringing together more than 1,450 producers, has an auction hall in Sint-Katelijne-Waver, Belgium, and sells around half a million tonnes of environmentally friendly vegetables, fruit and greens each year.

Given that more than 75 countries from around the world trade on the BelOrta platform year-round, there is potential for Kazakh agricultural products to be sold there as well.

Following this discussion, the Chamber's President expressed readiness to help organise a visit by Minister B. Sultanov to the Kingdom of Belgium in November this year to learn about BelOrta's operating mechanisms.

D. Van den Weghe also drew attention to complaints from some Chamber members about difficulties crossing the border with Russia, in particular that not all border posts in Russia are equipped with automatic scanners capable of examining cargo contents without a physical inspection by customs officers — or that such scanners exist but are not always used, for unknown reasons. Without (the use of) automatic scanners, cargo must be unloaded for inspection. This significantly increases the time needed to clear customs, and any delays mean lost money.

The Minister agreed that where automatic scanners are available, such inspections are unnecessary and should be avoided; he asked the Chamber to provide specific facts and pass them on to the Ministry along with all the supporting data.

In addition, from 2022 changes to Kazakhstan's tax legislation come into force, including an obligation for foreign companies to register and pay VAT in Kazakhstan when conducting e-commerce sales of goods or providing electronic services to individuals.

These issues are of interest to a wide range of BeNeLux businesses in Kazakhstan ready to enter the Kazakh market, as well as to domestic businesses trying to build up Kazakhstan's export potential but facing barriers.

Minister Sultanov noted that the decision to introduce VAT has been made, but that his Ministry will closely monitor its implementation and take action if necessary.

Given that the BeNeLux countries are leaders in seed production and their contribution to the development of Kazakhstan's agriculture, the Chamber's President proposed considering a temporary reduction in VAT on imported seeds. This would help support agricultural development and reduce the final cost of agricultural products.

The Minister of Trade and Integration said these issues are being monitored by the Ministry and are already being discussed with partners within the EAEU.

Following the meeting, the parties agreed on the need to hold such meetings on an ongoing basis.