Kazakhstan Content: Goods, Works and Services Register

Dear Sirs,

As we informed you earlier, by adopting the new Law of the RoK № 291-IV “On Subsurface and Subsurface Use” dated 24 June 2010 (hereinafter referred to as “Law”) the regulation and control over compliance with Kazakhstan content requirements as well as procurement of goods, work and services (GWS) have been strengthened.

The Law imposes on subsurface user and his contractors the obligation to acquire GWS from Kazakhstan producers under the condition they meet all the requirements of project documentation and Kazakhstan legislation on technological regulation. Thus, paragraph 31) of Article 76 of the Law obliges a subsurface user to register within the GWS Register.

By doing this, the Law also covers the following obligations:

•\tannually no later than 1 February of the year which is planned for procurement activities, submit the annual program for the GWS procurement for the following year to the Competent Authority;

•\tin case GWS are purchased by tender, single source, quotations request or through the electronic purchasing system, then the GWS Register shall be OBLIGATORY used by subsurface user (comes into legal force from October, 1st 2010);

•\tin case GWS are purchased by tender, single source, quotations request or through the electronic purchasing system, all the documents (announcement on procurement, resolutions on opening tender applications, permission for taking part in contest, drawing results) shall be obligatory placed in the GWS Register;

•\tannouncement on procurement and its results shall be OBLIGATORY published in periodicals announced not less than 3 times a week and widespread on the territory of Kazakhstan in Russian and Kazakh.

Responsibility issues

GWS expenses: 1) upon the contest results held outside Kazakhstan or 2) purchased in violation of the established order on GWS purchase – are EXCLUDED from expenses considered by the Competent Authority as performance of the contractual obligations by the subsurface user.

Please be kindly informed that we could organize a free training on the legislative requirements and developments for GWS procurement by your request.

Should you have any additional questions or would like to get a consultation on information presented, please do not hesitate to contact our Regulatory Compliance and Energy and Mineral Resources Teams. In person, please do contact Sofiya Zhylkaidarova at ssz@signumlaw.com and Gaukhar Kudaibergenova at gbk@signumlaw.com.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek for a specific advice in relation to any questions. Please note that Kazakhstan and Turkmenistan are emerging economies and their legislation and legal systems are in constant development. Should you have any questions or would like to discuss subjects addressed in this Client Update please contact us.