Legislative News

This Client Update includes amendments to the legislation of the Republic of Kazakhstan in August 2012.

The following 136 regulatory legal acts were adopted in August 2012:

• Decrees of the President of the Republic of Kazakhstan – 8;

• Resolutions of the Government of the Republic of Kazakhstan – 79;

• and other regulatory legal acts.

Most of these regulatory legal acts concern a public sector, however, there are some which may attract your attention and affect your business in Kazakhstan in a certain way.

We would like to draw your attention to the following regulatory legal acts:

INTERNATIONAL LAW

1) DECISION OF THE BOARD OF EURASIAN ECONOMICAL COMMISSION DATED 16 AUGUST 2012 No.134 ON REGULATORY ACTS IN THE SPHERE OF NONTARIFF REGULATIONS (MOSCOW) (enters into force by lapse of 30 calendar days from the date of its official publishing)

Decision establishes a Unified List of Goods, which prohibits or limits the import-export of goods by Customs Union member states in the frame of EEC in trading with third countries (hereinafter – Unified List).

Thus, for example, Unified List is supplemented with ozone-depleting substances and products containing such substances which are limited for import-export through the customs border of the Customs union

SUBSURFACE USE

1) REGULATION OF GOVERNMENT OF THE RK DATED 13 AUGUST 2012 No.1042 ON CONCEPTION OF DEVELOPMENT OF GEOLOGICAL SPHERE OF THE REPUBLIC OF KAZAKHSTAN UNTIL 2030 (effective from the date of signing)

Regulation approves the Conception of Development of Geological Sphere of the Republic of Kazakhstan until 2030 (hereinafter – Conception).

Conception is directed to development of geological sphere, provision of geological study of subsurface and development of new deposits.

Stimulation mechanisms of investments inflow into geological exploration by way of harmonization of RK subsurface use legal base with the international standards, including the sphere of the taxation and payments, provision of priority rights for subsurface use to those who has carried out their investment obligations within contracts on the state geological studying of subsurface will be developed and improved.

According to the Conception, it is assumed to provide free access to open geological information for the purposes of its free use in scientific and business activity. Also, the issue of creation of electronic information portal containing help data on resource base and mining, types, volumes, costs and productivity of geological works will be developed.

2) REGULATION OF THE GOVERNMENT OF THE RK DATED 7 AUGUST 2012 No.1028 ON AMENDING THE REGULATION OF THE GOVERNMENT OF THE RK DATED 27 JANUARY 2011 No.36 ON APPROVAL OF RULES OF CALCULATION OF MINIMUM KAZAKHSTANI CONTENT IN GOODS, WORKS AND SERVICES AT SUBSURFACE USE OPERATIONS WHICH ARE INCLUDED INTO THE CONDITIONS OF PROVISION OF SUBSURFACE USE RIGHTS (effective passing 10 calendar days upon its first official publishing)

The given regulation establishes a new edition of previous established Rules of calculation of minimum kazakhstani content in goods, works and services at subsurface use operations which are included into the conditions of provision of subsurface use.

The amendments, in general, provide the term “local content” instead of “Kazakhstani content”.

3) REGULATION OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN DATED 31 AUGUST 2012 No.1111 ON AMENDING THE REGULATION OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN DATED 30 DECEMBER 2010 No.1456 ON CONFIRMATION OF RULES ON PROVISION SUBSURFACE USE RIGHT (effective passing 10 calendar days upon its first official publishing)

Rules on provision of subsurface use rights are supplemented with provisions regulating the order of providing the subsurface use rights on common minerals, used at construction (reconstruction) and repair of roads of the general use, railways and hydro-constructions.

INVESTMENTS

1) REGULATION OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN DATED 22 AUGUST 2012 No.1066 ON CONFIRMATION OF RULES OF INPUTTING INVESTMENTS PROJECTS INTO THE LIST OF STRATEGIC INVESTMENT PROJECTS (effective upon its official publishing)

Regulation confirms the Rules of Inputting Investments Projects into The List of Strategic Investment Projects (hereinafter – Strategic projects rules), developed in accordance with the Law of RK On Investments.

List of strategic investment projects shall be supplemented with investment project which is directed to manufacturing of products with high value added cost, which corresponds to the priority types of activities on the high class level of general economical activity types classifier on which the investment preferences are provided, which is confirmed by the Regulation of the Government of the RK dated 8 May 2003 On Certain Issues of Realization of the Law of RK On Investments, and which also meets one of the following criteria:

1) investment project shall be directed to manufacturing of products which is listed in the list of activities on manufacturing of high technology products confirmed by the Government of the RK;

2) investments volume of the investment project shall consist of a minimum of five million minimum calculation indexes established for the corresponding financial year;

For the purposes of inputting the investment project into the list of strategic investment projects, legal entity shall apply with a request on such input in the form according to the Annex to the Strategic projects rules.

The request shall be addressed to the authorized body on investments in the term of first and third quarters of the year, but not later than 30th of the last month of the corresponding quarter.

ANTICORRUPTION LEGISLATION

1) REGULATION OF THE GOVERNMENT OF THE RK DATED 23 AUGUST 2012 No.1077 ON CONFIRMATION OF RULES ON REWARDING INDIVIDUALS NOTIFYING ON THE FACTS OF CORRUPTION OR WHICH HAS HELPED IN ANY WAY IN THE STRUGGLE WITH CORRUPTION (effective passing 10 calendar days upon its first official publishing) Regulation confirms the Rules on Rewarding Individuals Notifying on the Facts of Corruption or which Has Helped In Any Way in the Struggle with Corruption (hereinafter – Rewarding rules), developed in accordance with the Law of RK On struggle with corruption. Individuals notifying on the fact of a corruption or by helping in any way in the struggle with corruption shall be rewarded by single monetary payment.

Thus, for example, reward re corruption in administrative cases is 30 monthly calculation index (hereinafter – MCI), reward re corruption in criminal cases is 40, 50, 70 or 100 MCI. In the cases foreseen by the Rewarding rules (clause 6), rewards in the form of certificate of merit or honorary mention may be established. Funding the rewards shall be made from the republican budget.

Should you have any additional questions, please do not hesitate to contact us.

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.