This CLIENT UPDATE includes amendments and additions to the legislation of the Republic of Kazakhstan (“RK”) from 1 November through 30 November 2014.
The legislation outlined in this Client Update concerns both public and private sectors. Some of them may be of interest to you as it may affect your business in Kazakhstan in certain way.
This month we would like to draw your attention to the following legal acts:
LAW ON PERMISSIONS AND NOTIFICATIONS
1) On 21 November 2014, the Law “On Permissions and Notifications” came into force. You may find information about this Law in our May edition.
Briefly, the Law introduces, among others, the following important changes:
license together with the asset can be assigned to third parties of provided by the Law;
a government agency is prohibited from inquiring additional documents not required by the Law;
the right to apply for the permission to be resumed following suspension provided that the cause of breach is removed.
VISA WAIVER BETWEEN KAZAKHSTAN AND SOUTH KOREA
1) The Visa Abolition Agreement between the Government of RK and the Government of South Korea, signed on 19 June 2014 in Astana, came into force on 29 November 2014.
As from 29 November 2014, citizens of both countries may enter and depart without visa for 30 days, if they have a valid passport or a laissez-passer and do not intend to work, study or live in the respective country they enter.
The allowed duration of stay should not exceed 60 calendar days each stay within 180 calendar days.
DRAFT LAW ON SUBSURFACE USE
1) On 19 November 2014, the Mazhilis of Parliament adopted the Draft Law “On changes and amendments into certain legal acts of RK on subsurface use”.
The Draft Law proposes to exercise the Government’s priority right only in relation to subsurface areas, which have a strategic significance.
Also the Draft Law proposes to abolish any restrictions on extension of the exploration period for onshore projects. The Draft Law further suggests to let subsurface users apply for an extension 3 months prior to the expiry of the exploration period, as opposed to 6 months as set forth by the current law.
Pursuant to the Draft Law subsurface use contract must include percentage ratio of Kazakhstan staff, products, works and services to the total number of staff, products, works and services.
The Draft Law clarifies remedial timelines for subsurface user for breach of the contract terms on physical obligations – no more than 6 months, on financial obligations, which are not related to physical obligations – no more than 3 months and on other obligations – no more than 1 month as from the the date of a written notification is received.
The Draft Law proposes to oblige subsurface users, which undertake offshore exploration and production, to insure their property risks and liability risks.
Also the Draft Law determines persons, which can review cases and impose administrative penalties on behalf of the authorized body in the oil and gas sector.
The Draft Law outlines in detail the procedure for contract area assignment into trust management.
The Draft Law proposes to impose statutory liability for administrative violations, which are not currently provided by the Administrative Code, such as:
violation of requirements for conducting petroleum operation and (or) non-compliance of prospecting, appraisals works and exploration works in relation to hydrocarbons;
flaring of associated and (or) natural gas without permission or failure to comply with permission terms of the authorized body in the oil and gas sector; and others.
The Draft Law is expected to be adopted by the Senate of Parliament and signed by the President in December 2014.
DRAFT LAW ON ENTREPRENEURSHIP IMPROVEMENT
1) On 19 November 2014, the Mazhilis of Parliament in the first reading adopted the Draft Law “On changes and amendments into certain legal acts of RK on fundamental improvement of business environment for entrepreneurship in RK”.
Pursuant to the Draft Law small business entity is entitled to undertake activities without a corporate seal.
Also the Draft Law proposes to accelerate timeline for state registration of small and middle business entities up to one hour from the moment of filling application through the e-Government web-site. This change does not cover joint stock companies and their branches (representative offices).
Small business entities are excluded from the payment of legal entity registration fee.
The Draft Law proposes to increase the temporary land use term for foreigners, stateless persons and foreign legal entities from 10 years to 25 years.
Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek a lawyer for a specific advice. Please note that Kazakhstan is an emerging economy and its legislation and legal system are in constant development. Should you have any questions or would like to discuss matters addressed in this Client Update, please contact us.