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Kazakhstan cuts mechanical engineering exports to Russia by 15% in 2024 fearing sanctions

According to Azat Peruashev, the banks of the republic are concerned about the possible inclusion of exported products in the sanctions lists of the United States and the European Union, which could entail the risk of secondary sanctions against these banks too

ASTANA, February 12. /TASS/. The export of products from Kazakhstan's mechanical engineering enterprises to Russia has decreased by 15% by the end of 2024 due to risk of West’s secondary sanctions, Azat Peruashev, a deputy of the Majilis (lower house of parliament) of Kazakhstan, announced.

"Machine-building enterprises [of Kazakhstan] have recently encountered serious difficulties in exporting their products. The main problem is the refusal of Kazakh banks to transfer payments and provide loans to enterprises that have business ties with Russian partners. <...> As a result, exports of these enterprises to Russia has decreased by 15% over the past year," the deputy said.

He was voicing the request of one of the factions to Prime Minister Olzhas Bektenov and the head of the National Bank Timur Suleimenov.

According to the deputy, the banks of the republic are concerned about the possible inclusion of exported products in the sanctions lists of the United States and the European Union, which could entail the risk of secondary sanctions against these banks too.

However, Peruashev noted that the position of the European Union is that the sanctions do not apply to products manufactured in Kazakhstan and exported to Russia. As the deputy stressed, "the refusal to make payments is not due to any official prohibitions on the part of state agencies, but is an initiative of the banks themselves, based on the principles of excessive caution."

The lawmaker stressed that "as a result, the most advanced production facilities in the electrical engineering industry [of the republic] are suffering significant losses due to missed export opportunities," and called on the government to take appropriate measures.

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