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Home»Finance»Kyrgyzstan’s Vape Ban: Clean Lungs or Dirty Lobbying?
Finance

Kyrgyzstan’s Vape Ban: Clean Lungs or Dirty Lobbying?

November 7, 2024No Comments10 Mins Read
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Kyrgyzstan’s Vape Ban: Clean Lungs or Dirty Lobbying?
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In June 2024, the Kyrgyz parliament passed a law banning e-cigarettes set to take effect on July 1, 2025, pending the president’s signature. Deputies Shairbek Tashiev and Alisher Kozuev introduced the bill with the goal of safeguarding young people’s health. However, some stakeholders in the “tobacco discussion” question the efficacy of this approach. Notably, only vapes are banned by the law, while IQOS – a line of heated tobacco products manufactured by Philip Morris International – were excluded.

The influence of various lobby groups in Kyrgyzstan is well-documented, with hundreds of articles, journalistic investigations, academic studies, and NGO analyses available online. In recent years, several legislative changes have raised public concern and debate about lobbying in the country.

In 2020, Kyrgyzstan’s parliament passed a controversial law allowing the parallel design and construction of high-rise residential buildings and public facilities. Deputies had reviewed the same amendments in 2016 and 2017, but they were rejected. At the time, civil activists held peaceful protests against the changes, with critics alleging that the amendments would permit construction to begin without official documents – design or survey work, for example – and ultimately lead to unsafe construction.

The following year, in 2021, deputies approved a bill to establish a special gambling zone in Issyk-Kul, which was signed into law by President Sadyr Japarov in 2022. But the story didn’t end there. On October 30, 2024, deputies swiftly passed amendments to the “Law on Gambling Activities of the Kyrgyz Republic,” proposed by the Cabinet of Ministers. The new amendments now allow casinos to be established within government buildings.

The banking lobby has also drawn attention. The Civic Platform Public released an analysis in 2020 addressing proposed amendments to laws governing the National Bank’s operations, indicating significant lobbying efforts by financial stakeholders.

Freedom of the press is another critical area of concern. In December 2023, a draft law on media was introduced in parliament. Human rights activists and lawyers warned that the law, some sections of which were reportedly plagiarized from Russian sources, could severely restrict press freedom. In January 2024, several editorial offices were searched and nearly a dozen journalists were arrested. Criminal cases were opened against the news agency 24.kg and 11 journalists who all either currently or formerly worked for Temirov Live were put on trial. On October 10, two of the journalists were sentenced to prison time – six and five years – while two others were given three-year probation sentences. Separately, in September Kyrgyzstan’s Supreme Court  upheld a lower court’s decision February to liquidate Kloop Media.

The tobacco lobby, though less visible, also wields influence. Major tobacco industry players are believed to have direct access to certain parliamentarians, a point raised publicly by Deputy Dastan Bekeshev, who highlighted their impact on legislative decisions.

It Makes No Sense to Ban, It Makes Sense to Regulate

Bekeshev, who opposed the ban, argued that excise taxes on e-cigarettes would be more effective than prohibition, given challenges in enforcement. He cited Kazakhstan’s experience. Similar bans in Kyrgyzstan’s northern neighbor have resulted in a rise in smuggling and sales through informal channels like messaging apps. He also highlighted a recent incident involving a police officer’s alleged extortion of a teenager using e-cigarettes. Bekeshev fears more incidents of this nature, along with increased corruption potential if a ban is enforced.

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The law includes significant penalties for violations. Fines for individuals using vapes are set at 10,000 soms ($116), and for legal entities, 60,000 soms ($700). Selling vapes could lead to fines of 50,000 soms ($582) for individuals and 65,000 soms ($760) for legal entities. Importing vapes would carry a penalty of 150,000-200,000 soms ($1,750-$2,330) or one to two years of imprisonment.

Bekeshev voiced concerns over the disparity in fines, noting, “20,000 soms for light drugs, and 40,000 for vapes?”

This potential for corruption, particularly involving youth, was echoed by Deputy Elvira Surabaldieva, who stated that large fines might lead to bribery: “If they catch a smoking teenager, they may demand: ‘Give me 20,000, or face a 40,000 fine,’ creating fertile ground for corruption.”

Oversight of the ban’s enforcement remains uncertain. Sardar Mayrykov, executive director of the OPORA Association, which promotes solutions and alternatives within the framework of harm reduction for alcohol and tobacco-related issues, suggested that responsibility might fall to the Ministry of Internal Affairs. With a year-long transition period for suppliers, Mayrykov expects the time will be used to finalize and coordinate enforcement mechanisms and relevant regulations.

New Corruption Feeder for the Security Forces

Under the current Tax Code rates, excise taxes on tobacco products (including vapes) are projected to generate $78.3 million (about 6.97 billion soms) for Kyrgyzstan’s budget this year. From January to June 2024, excise taxes on tobacco products imported from Eurasian Economic Union (EAEU) member states contributed 2.53 billion soms. According to Customs Service data, Kyrgyzstan imported $3.37 million in vapes and related products in the first half of 2024, slightly exceeding the $3.35 million imported throughout 2023. China has been the leading supplier over the past 2.5 years, accounting for 78 percent ($6.6 million) of vape imports, followed by South Korea ($1 million) and Malaysia ($0.6 million), with the UAE and Thailand trailing behind.

Following the new law’s implementation in 2025, Kyrgyzstan’s budget could lose approximately 300-400 million soms ($3.5-4.7 million) annually. Banning legal vape sales could expand the shadow market, potentially leading to increased availability of low-quality products, a rise in tobacco smoking rates, and a reduction in government revenue.

As Ulukbek Turdubekov, a representative of the International Business Council of Kyrgyzstan, emphasized, taking into account the increase in excise tax by 15 percent annually, the amount lost would only increase. He stressed that if IQOS were banned, the budget would lose 3-4 times more. According to his forecasts, the money coming into the budget via excise taxes currently will, after the law goes into effect, go into the pockets of customs officers, as it was before the law began to regulate the vape business. 

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Turdubekov outlined two likely scenarios post-ban: either the vape industry will shut down entirely, or profits will flow through customs “informally,” citing Kazakhstan’s experience where the vaping market remains largely illegal and the ban only heightened this issue.

The bill, however, appears to contain favorable provisions for major players. Notably, it allows manufacturing and exporting e-cigarettes, enabling companies to continue production in Kyrgyzstan for international markets. For instance, in March 2024, Cabinet Chairman Akylbek Japarov visited the Center Asia Tobacco plant in Tokmok, which manufactures tobacco products, including e-cigarettes. The plant, which aims to create 2,000 jobs with a $500 million investment, plans to export to China, Asia, and Arab countries – a notable decision given that China is the primary vape supplier to Kyrgyzstan.

In June, another legislative move sparked debate. Parliamentarian Marlen Mamataliev proposed amendments to allow e-cigarette production in the Bishkek Free Economic Zone, providing preferential conditions to two companies. This led Deputy Surabaldieva to raise concerns about favoritism, arguing that if protecting youth is the priority, such exemptions undermine that goal. 

“It seems like competitors were pushed out, leaving two companies in a privileged position. This appears to be a blatant lobbying effort that bypasses fair competition,” she remarked.

Kyrgyzstan Violates WTO rules?

Turdubekov expressed skepticism about the claim that companies will limit production to exports only.

“It seems someone is trying to monopolize the market to control production, sales, and export of e-cigarettes. This is a blatant violation of WTO principles. According to trade regulations, countries can set internal restrictions as long as they are non-discriminatory. How can you ban imports while allowing exports? What does that mean for the WTO framework?” he argued.

As a member of the EAEU, Kyrgyzstan must also adhere to the economic union’s regulatory standards. According to the EAEU’s guidelines on the circulation of these products, member states are encouraged to regulate rather than ban them outright. The guidelines state that member states must take all necessary actions to restrict and remove from circulation any nicotine-containing products that fail to meet the EAEU’s technical requirements.

Global Epidemic of Vaping

Kyrgyzstan adopted the Tobacco Control Law in 2006 and simultaneously joined the Framework Convention on Tobacco Control. However, full regulatory documentation for government and supervisory activities was not initially established. In 2021, Japarov signed the Law “On the Protection of Citizens’ Health from the Effects of Tobacco Consumption, Nicotine, and Exposure to Ambient Tobacco Smoke and Aerosol,” which addressed previously overlooked details.

“The president signed a truly progressive bill,” said WHO expert Alina Talantbekova, referring to the 2021 law. “Kyrgyzstan has been highlighted as an example for other countries, even across Europe, from Iceland to Tajikistan. The law covers electronic cigarettes and similar products. We may be delayed with the supporting regulations, but the law itself is robust.”

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According to the WHO, although the long-term health effects of e-cigarettes are not fully understood, they are known to release toxic substances, including some that are carcinogenic and others that heighten the risk of heart and lung diseases.

In 2019, a study among children aged 13 to 15 revealed that one in five young smokers had tried smoking by the age of 7. As Talanbekova said, a subsequent survey conducted by Global South with 5,600 schoolchildren across Kyrgyzstan’s regions found that vapes and hookahs had already reached rural areas. 

“Vapes are readily available everywhere, with children and teens lining up to buy them. We don’t fully understand the impact on developing bodies,” Talantbekova emphasized.

Clean Lungs or Dirty Lobbying?

Deputy Bekeshev has repeatedly been at the center of high-profile tobacco-related controversies in Kyrgyzstan’s parliament. In March 2023, discussions on Tax Code amendments led to a corruption scandal. Bekeshev detailed the incident on his website, describing an intense debate over taxes on heated tobacco products. He warned his colleagues that a proposed tax reduction would slash budget revenues by 300 million soms, predicting that the dispute might evolve into a criminal case in the future. Despite his warnings, the proposal passed. 

“IQOS won, Kyrgyzstan lost,” his blog concluded.

Two years ago, a video appeared online alleging that employees of one of the major tobacco companies were writing laws on cigarettes for Kyrgyzstan. Officially, the Department for Technical Regulation of the Ministry of Economy and Commerce and the Association of Suppliers (Manufacturers and Distributors) prepared the technical regulations but it appeared that a Kazakh citizen, who worked for a large tobacco company, was the author. The only member of the the Association of Suppliers from the tobacco industry was a company that supplies IQOS to Kyrgyzstan. The resulting technical regulations approached IQOS differently than other heated tobacco products.

“Tobacco companies’ influence here is widely known,” said Talantbekova. “According to the law, they shouldn’t be involved in policy or regulatory development, yet I still see them at meetings.”

This involvement contravenes Article 5 of the WHO Framework Convention, which explicitly aims to shield national policies from tobacco industry influence. Yet, as in many Central Asian countries, Kyrgyzstan continues to face challenges due to the strong influence of the tobacco lobby.

Turdubekov noted two main motivations behind legislative changes: public benefit, for example in terms of increased budget revenue; and personal interests, which are frequently prioritized. These personal motives, he explained, can include the elimination of competitors and the protection of a business sector where the initiator of a law has his own business.

“Any changes to the law often stem from personal interests. I haven’t seen other motives,” he remarked.

Ban clean Dirty Kyrgyzstans Lobbying lungs Vape
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