On May 24, 2023 the Agreement on the peculiarities of application of security for the fulfillment of the obligation to pay customs duties, taxes, special, anti-dumping and countervailing duties when transporting (shipping) goods under the customs procedure of customs transit (hereinafter - the Agreement) was ratified (Law of the Republic of Kazakhstan №4-VIII of May 24, 2023).

The main purpose of the Agreement is to create a more attractive system of ensuring the fulfillment of the obligation to pay customs duties during customs transit. In particular, the Agreement provides for the possibility of applying the following simplifications:

1. For declarants who have experience with general security for the fulfillment of the obligation to pay customs payments when performing transit transportation and who meet the established criteria.

Such declarants may provide security in respect of goods transported under several transit declarations in a smaller amount (by 20%) than the amount of customs duties and taxes payable in respect of such goods;

2. For guarantors recognized under the Agreement as national guarantors.

Specified persons may apply simplifications from 10% to 100% of the amount of the financial guarantee subject to certain conditions.

The «preferential» mechanism laid down in the Agreement will make it possible to reduce the costs of participants of foreign economic activity in transit transportation and will have a positive impact on the business environment.

The agreement is designed to settle 2 blocks of issues:

1. peculiarities of application of general security for certain categories of declarants

The agreement allows bona fide declarants who have experience with transit transportation and do not allow arrears in customs payments to issue security certificates for 20% more than the general security provided.

2. peculiarity of application of guarantee

A surety bond is the most sought-after method of collateralization (no need to divert «real» money; the cost of providing the relevant services is lower than the cost of bank guarantees; a bank guarantee is virtually impossible for foreign carriers to obtain).

The Agreement provides for the establishment of the institution of national guarantors from among persons recognized in the states as guarantors. The Agreement defines uniform conditions for recognizing guarantors as national guarantors.

While an ordinary guarantor ensures payment of payments only to the extent of the financial guarantee provided, the Agreement expands the possibilities for national guarantors, in particular, a national guarantor may ensure payment of customs payments for an amount exceeding the amount of the financial guarantee provided to the customs authority.

The «preferential» mechanism laid down in the Agreement will make the institution of surety more «attractive» and less costly.