Kazakhstani authorities comment on U.S. sanctions against company from Almaty

The Ministry of National Economy of Kazakhstan has commented on the situation around Elem Group, a logistical company from Almaty that on December 7 was added to the Entity List of the Bureau of Industry and Security under the U.S. Department of Commerce.

According to the U.S. Federal Register, the End-User Review Committee (ERC) determined to add Elem Group, LLC, under the destination of Kazakhstan, to the Entity List for «posing a risk of diversion of items subject to the EAR to Russia.»

If a company is added to the Entity List, this means that U.S. companies cannot supply such a company their products unless a special license is issued. In turn, the Ministry of National Economy of Kazakhstan said that Elem Group hasn’t been involved in foreign trade since May 2023.

According to open data on the Elem Group website, the company’s business interests are in the logistics of electronic components, industrial equipment and spare parts. The company is actively engaged in cooperation with big international logistical and trade companies, the website says. Also, Elem Group runs its own warehouses in Finland, Germany, China and Turkey. On top of that, the company offers services linked to customs clearance in Kazakhstan and the shipment of goods by air, land and sea.

«Companies added to the Entity List by the U.S. Department of Commerce can operate as usual, although they can’t work with American counteragents. So far, the Entity List includes many businesses from developed countries such as Germany, Japan, Belgium and the U.K. among others,» the ministry said.

The agency also emphasized that being added to the Entity List doesn’t mean that the U.S. government will add such a company to its SDN List by the Office of Foreign Assets Control under the U.S. Department of Treasury or that it would apply secondary sanctions.

In June, Radio Liberty reported that Streloy E-commerce, a Russian company in St. Petersburg received hundreds of dual-use items from Elem Group after the full-scale Russian invasion of Ukraine in February 2022. The Kazakhstani company was registered in March 2022, a month after the start of the war in Ukraine. According to the media outlet, one of Elem Group’s founders was Kirill Tulyakov, a Russian businessman and co-founder of Streloy E-commerce.

Last year, Timur Suleymenov, who at the time was assistant to the president of Kazakhstan, told Euroactiv that Kazakhstan didn’t want to be subjected to the secondary sanctions and intended to expand its cooperation with Europe. The official’s statement was made against the backdrop of news about Kazakhstan’s rapidly soaring exports to Russia. The U.S. Department of Commerce noticed this fact and has added Kazakhstan to the list of countries that are used as transshipment points for transporting goods from Europe to the Russian Federation.

According to Kazakhstan’s Foreign Ministry, the country is doing its best to avoid the secondary sanctions. For example, the government of Kazakhstan has banned exports of military equipment to Russia, while exports of dual-use goods must be certified.