Customs Relief Among OTS Countries To Incentivize Trade Through Middle Corridor

The member states of the Organization of Turkic States (OTS)completed the ratification of the agreement on the creation of asimplified customs corridor, which provides for the integration ofthe information systems of Turkiye, Azerbaijan, Kazakhstan,Kyrgyzstan, and Uzbekistan.

The agreement on the simplified customs corridor envisages thesimplification of foreign trade activities along the Trans-CaspianInternational Transport Corridor (Middle Corridor).

Today, the main share in the foreign trade of not onlyKazakhstan but also Kyrgyzstan and Uzbekistan passes through twomain corridors: from Russia to Europe and through China. The newagreement is aimed at the development of the third corridor - theTrans-Caspian corridor passing through the Caspian Sea, Azerbaijan,and Turkey. From 2010 to 2022, the trade turnover between thecountries participating in this agreement increased three times indicates great potential for future growth.

Today, the volume of trade for Kazakhstan with these Turkicstates is approximately 13 billion US dollars, and 70 % of thisamount is accounted for by Kazakhstan's exports to thesecountries.

The simplified customs corridor has the following advantages:trade operators will receive priority service at the exit points,which will reduce waiting times; customs clearance procedures willbe optimized using separate traffic lanes, which will furtherreduce clearance times; customs inspection will be carried out onlyin cases where the risk of violation of customs legislation isdetermined, which will allow to reduce the downtime and costs.

The agreement on the simplified customs corridor does not limiteither specific industries or the choice of goods for customsclearance. This means that trade operators can use simplifiedprocedures for all types of goods.

After the ratification of the agreement on the establishment ofthe simplified customs corridor, a six-month pilot project will beimplemented. During this period, the customs structures of the fivecountries will fully work on all technical, administrative, andlegal aspects of the new system. After the pilot project iscompleted, the system will be fully operational.

It should be noted that Azerbaijan, Turkey, Uzbekistan, andKyrgyzstan ratified this agreement in 2023. Of the five OTScountries, only Kazakhstan remained, which this week confirmed tojoin the simplified customs corridor.

It should be noted that the agreement was signed on November 11,2022, in Samarkand between the governments of Azerbaijan,Kazakhstan, Kyrgyzstan, Turkiye, and Uzbekistan.

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