RESTRICTED  
  
S/C/W/461  
 
18 December 2023  
(23-8673) Page: 1/2 
Council for Trade in Services  Original: English  
 
COMMUNICATION FROM THE REPUBLIC OF KAZAKHSTAN  
REVIEW OF ARTICLE II (MFN) EXEMPTIONS  
Written answers by Kazakhstan to the questions from Hong Kong, China ( S/C/W/431 ) 
The following communication dated 15 December 2023, from the delegation of Kazakhstan is being 
circulated to the Members of the Council for Trade in Services.  
 
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1  QUESTION 15 FROM HONG KONG, CHINA ( S/C/W/431 , PAGE 3)  
The exemptions appear t o be covered by GATS exceptions and not MFN inconsistent. Would 
Kazakhstan consider removing these exemptions? If not, please explain the rationale for maintaining 
such exemptions. Why the exemptions are needed despite the exception provided by Article V o f 
GATS?  
 
Answer from Kazakhstan:  
Those measures were indicated in MFN exemption list because they are not fully covered by GATS 
exceptions. Traditionally, Bilateral Investment Treaties (BITs) does not align with the stipulations of 
Article V of the GATS, focusing solely on mode 3 – the es tablishment of judicial persons, branches, 
and representative offices. Consequently, BITs inherently excludes all other modes of supply, failing 
to meet the criteria outlined in footnote 1 to Article V of the GATS, which emphasizes that 
agreements should n ot a priori exclude any mode of supply to fulfil the condition. If an agreement 
facilitating investment liberalization failed to meet Article V requirements, treatment outlined in such 
agreements, such as commitments to national treatment, had to be extend ed through MFN to 
services suppliers from all WTO Members. Therefore, Kazakhstan believes that preferential 
treatment should be included as an MFN exemption.   
 
2  QUESTION 140 FROM HONG KONG, CHINA ( S/C/W/431 , PAGE 16)  
For the sake of clarity, please provide info rmation on the preferential measures under the special 
regime of shipping in the Caspian Sea.  
 
Answer from Kazakhstan:  
Due to its enclosed nature, the Caspian Sea does not fall under the regulatory purview of the United 
Nations Convention on the Law of the  Sea. Therefore, Kazakhstan, being a landlocked country, is 
not a participant in this convention.   In August 12, 2018, in Aktau, during the Fifth Caspian Summit, 
the Presidents of Kazakhstan, Azerbaijan, Iran, Russia and Turkmenistan signed the Convention  on 
the Legal Status of the Caspian Sea  (Convention), which was a result of 26 years of negotiations. 
The Convention is a fundamental international treaty that defines and regulates the rights and 
obligations of the parties in respect of the Caspian Sea, i ncluding its waters, seabed, subsoil, natural 
resources and airspace.    S/C/W/461  
 
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  According to article 101 of the Convention, ships flying the flags of the Parties shall enjoy 
freedom of navigation beyond the outer limits of the territorial waters of the Parties. The 
freedom of navigation shall be exercised in accordance with the provisions of the Convention. 
The Convention also provides for the freedom of transit to other seas and the ocean by all 
means of transport.  
 
 
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1 Article 10  
1. Ships flying the flags of the Parties shall enjoy freedom of navigation beyond the outer limits of 
the territorial waters of the Parties. The freedom of navigation shall be exercised in accordance 
with the provisions of this Convention and other compati ble agreements between the Parties 
without prejudice to the sovereign and exclusive rights of the Parties as determined in this 
Convention.  
2. Each Party shall grant ships flying the flags of other Parties that carry goods, or passengers and 
baggage, or p erform towing or rescue operations the same treatment as to its national ships with 
regard to free access to its ports in the Caspian Sea, their use for loading and unloading goods, 
boarding or disembarking passengers, payment of tonnage and other port due s, use of navigation 
services and performance of regular commercial activities.  
3. The regime specified in paragraph 2 of this Article shall apply to the ports in the Caspian Sea 
that are open to ships flying the flags of the Parties.  
4. The Parties shall  have the right to free access from the Caspian Sea to other seas and the Ocean, 
and back. To that end, the Parties shall enjoy the freedom of transit for all their means of transport 
through the territories of transit Parties.  
Terms and procedures for suc h access shall be determined by bilateral agreements between the 
Parties concerned and transit Parties or, in the absence of such agreements, on the basis of the 
national legislation of the transit Party.  
In the exercise of their full sovereignty over thei r territories, the transit Parties shall be entitled to 
take all necessary measures to ensure that the rights and facilities of the Parties provided for in 
this paragraph in no way infringe upon legitimate interests of the transit Party.