Legislative News

INNOVATIONS IN THE LEGISLATION

177 legal documents were adopted in October 2008 including:

• Laws of the Republic of Kazakhstan – 7;

• Decrees of the President of the Republic of Kazakhstan – 6;

• Resolutions of the Government of the Republic of Kazakhstan – 75 (4 of them have not been enacted).

The majority of these legal documents affects public sector. However, among them there are some legal documents that can attract your attention and have certain impact on your business in Kazakhstan.

We would like to draw your attention to the following legal documents:

1) Order of the Chairman of the Agency on Regulation of Natural Monopolies of the Republic of Kazakhstan dated 14 October 2008 № 316-OD «On Introduction of Amendments to Order of the Chairman of the Agency on Regulation of Natural Monopolies of the Republic of Kazakhstan dated 24 March 2005 № 100-OD «On Approval of Rules on Provision of Equal Conditions for Access to Regulated Services (Goods, Works) in the Sphere of Oil and (or) Oil Products Transportation by Trunk Pipelines».

By this Order legislator introduced amendments to Order of the Chairman of the Agency on Regulation of Natural Monopolies of the Republic of Kazakhstan dated 24 March 2005 № 100-OD «On Approval of Rules on Provision of Equal Conditions for Access to Regulated Services (Goods, Works) in the Sphere of Oil and (or) Oil Products Transportation by Trunk Pipelines», namely, in case of limited technical capacity of regulated services (goods, works) provision in the sphere of oil and (or) oil products transportation by trunk pipelines in result of non-availability of trunk pipeline free capacity priority of primary access in the sphere of oil and (or) oil products transportation by trunk pipelines may be given to consumer that undertakes obligations to provide mandatory annual oil volumes in accordance with concluded agreement.

2) Resolution of the Government of the Republic of Kazakhstan dated 4 October 2008 № 916 «On Approval of Action Plan on Implementation of State Program «Way to Europe» for 2009-2011».

By this Resolution Government of the Republic of Kazakhstan approves action plan on implementation of State Program “Way to Europe” for 2009-2011.

This plan specifies continuation of works under Programs (projects) Inogate (Interstate oil and gas transportation to Europe) and Tacis with regard to improvement of normative-technical policy in gas industry.

Form of implementation is envisaged by provision of information to the Ministry of Foreign Affairs of the Republic of Kazakhstan.

Executives in charge are Ministry of Energy and Mineral Resources of the Republic of Kazakhstan, JSC “Kazakhstani Holding on Management of State Assets «Samruk” and JSC “National Company “KazMunaiGas”.

3) Resolution of the Government of the Republic of Kazakhstan dated 13 October 2008 № 936 «On Draft Law of the Republic of Kazakhstan “On Introduction of Changes and Amendments to the Law of the Republic of Kazakhstan «On State Procurements ».

By this Resolution Government of the Republic of Kazakhstan introduces to Majilis of Parliament of the Republic of Kazakhstan draft Law of the Republic of Kazakhstan “On Introduction of Changes and Amendments to the Law of the Republic of Kazakhstan «On State Procurements ».

As soon as it is adopted we will send to you brief analysis of innovations.

4) Resolution of the Government of the Republic of Kazakhstan dated 14 October 2008 № 581v «On Introduction of Changes and Amendments to Resolution of the Government of the Republic of Kazakhstan dated 12 December 2007 № 1224».

By this Resolution Government of the Republic of Kazakhstan introduces minor changes and amendments to Resolution of the Government of the Republic of Kazakhstan dated 12 December 2007 № 1224 «On Approval of Passports of Republican Budget Programs for 2008».

By this Resolution Government of the Republic of Kazakhstan updates action plan of implementation of programs with regard to acquisition of services on professional development of civil servants, one of themes of which is «State Control in Oil Producing Industry, Geological Exploration and Pipeline Transport ».

5) Resolution of the Government of the Republic of Kazakhstan dated 17 October 2008 № 960 «On Draft Law of the Republic of Kazakhstan «On Introduction of Changes and Amendments to the Environmental Code of the Republic of Kazakhstan on Issues of Regulation of Import of Environmentally Unsound Technologies, Machinery and Equipment».

By this Resolution Government of the Republic of Kazakhstan introduces to Majilis of Parliament of the Republic of Kazakhstan draft of the Law of the Republic of Kazakhstan “On Introduction of Changes and Amendments to the Environmental Code of the Republic of Kazakhstan on Issues of Regulation of Import of Environmentally Unsound Technologies, Machinery and Equipment».

Draft Law envisages regulation of import to the Republic of Kazakhstan of environmentally unsound technologies, machinery and equipment with expired serviceable life, introduction of import ban for several types of technologies without preliminary ecological conclusion (expertise), introduction of graduated duties for equipment and machinery with expired serviceable life.

In case of adoption of draft law it is assumed that import of environmentally unsound technologies, machinery and equipment will be limited and state will regulate import of specified machinery and technologies, in consequence of this level of environmental pollution, quantity of production and consumption waste will reduce gradually.

6) Decree of the President of the Republic of Kazakhstan dated 13 October 2008 № 669 «On Some Measures on Provision of National Economy Competitiveness and Stability».

In this Decree President of the Republic of Kazakhstan resolves the Government of the Republic of Kazakhstan to establish Joint-Stock Company «Fund of National Welfare «Samruk-Kazyna» in accordance with the procedure established by legislation by means of merger of Joint-Stock Company «Kazakhstani Holding on Management of State Assets «Samruk» and Joint-Stock Company «Fund of Sustainable Development «Kazyna» and to determine that Fund is national managing holding, main activity of which is management of holdings of shares (shares of participation) of national development institutions, national companies and other legal entities beneficially owned by it.

7) At present Draft Code of the Republic of Kazakhstan “On Taxes and Other Compulsory Payments to the Budget” (Tax Code) is being developed.

After its adoption we will inform you additionally about principal changes in the Tax Code.

8) At present Draft Law of the Republic of Kazakhstan «On Subsoil and Subsoil Use» is also in the process of development.

As soon as this law is adopted we introduce to you main aspects of this law additionally.

9) Law of the Republic of Kazakhstan dated 23 October 2008 № 72-IV «On Introduction of Changes and Amendments to Some Legislative Acts of the Republic of Kazakhstan on Issues of Soundness of Financial System».

This Law introduces changes and amendments to the legislative acts of the Republic of Kazakhstan for stabilization of financial system of the Republic of Kazakhstan during the period of world financial crisis.

Thus, Article «Bringing to Inability to Pay» was introduced to the Criminal Code of the Republic of Kazakhstan.

Amendments have been introduced to the Law of the Republic of Kazakhstan «On Banks and Banking Operations in the Republic of Kazakhstan», one of which is that if bank has negative-going capital stock, authorized body shall have a right to repurchase bank’s shares compulsorily under condition of their mandatory immediate sale at price of acquisition to the new investor providing guarantees of required improvement of bank’s financial situation.

Further, for protection of interests of bank’s creditors and provision of stable banking system of the Republic of Kazakhstan Government of the Republic of Kazakhstan shall have a right to take a decision about acquisition of authorized shares of bank by the Government of the Republic of Kazakhstan or national managing holding in the amount required for improvement of its financial situation.

One of amendments to the Law of the Republic of Kazakhstan «On Insurance Activities» is introduction of Article 15-1 on prohibition of provision of favorable conditions to affiliated persons of insurance (re-insurance) organization.

New notions were introduced to the Law of the Republic of Kazakhstan «On Joint-Stock Companies ».

One of innovation is that Board of Directors of Joint-Stock Company, control packet of shares of which is owned by state or national managing holding except for national companies upon presentation of executive body approves medium-term plans of financial and operating activity of company.

Development plans of national companies, shareholder of which is national managing holding are approved by board of directors of these national companies.

There are also some amendments to the Laws of the Republic of Kazakhstan «On Pension Coverage in the Republic of Kazakhstan», «On Securities Market», «On State Regulation and Supervision of Financial Market and Financial Organizations », «On Credit Bureau and Formation of Credit Stories in the Republic of Kazakhstan», «On Investment Funds», «On Obligatory Guaranteeing of Deposits Allocated in Banks of Second Level of the Republic of Kazakhstan », «On Accounting and Financial Reporting»

As you see October was not very intensive with regard to number of legal documents related to different spheres of business. We will inform you about further development of legislation.

10) APPOINTMENTS

There were some appointments to the state government authorities in October 2008

The most important of them are as follows:

  1. Mr. Kelimbetov K.N. was appointed as the President of Fund of National Welfare “Samruk-Kazyna” JSC.
  2. Mr. Dunaev A.K. was appointed as the Vice-president of Fund of National Welfare “Samruk-Kazyna” JSC.
  3. Mr. Kulibayev T.A. was appointed as the Vice-president of Fund of National Welfare “Samruk-Kazyna” JSC.
  4. Mr. Musin A.E. was appointed as the Chief of President’s Administration of the Republic of Kazakhstan.
  5. Mr. Nurpeisov K.A. was appointed as the Vice-president’s of President’s Administration of the Republic of Kazakhstan.
  6. Mr. Sagintayev B.A. was appointed as the Akim of Pavlodar’s Oblast (30th of September 2008).

We hope that presented information will be useful for you.

Yours Faithfully,

Signum Law Firm

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.