Monthly Legal Alert: February 2023
SIGNUM regularly provides Legislative/Regulatory Alerts to keep Clients informed about important laws and regulatory changes in the Republic of Kazakhstan (“RK”). This Alert covers recent developments introduced in February 2023 related to:
1. Amendments in labor laws.
2. Digital assets and informatization activity.
3. Maximum auction prices for RES facilities.
1. Amendments in labor laws[1].
Termination of employment contract with the head of a legal entity
Upon expiration of the employment contract with a head of a legal entity and absent a notification on expiration of the employment contract, the employment contract is extended for a year, unless a different extension period is indicated by other approved documents. Prior to the introduction of these amendments, the period has been extended for an indefinite time until the adoption of respective shareholder’s resolution.
Labor arbitration
In addition to the governmental labor inspector, the labor arbitration panel includes representatives of the tripartite commission on social partnership and regulation of social and labor relations. Members of the tripartite commissions representing the parties to the social partnership are included in the labor arbitration panel on a parity basis.
Employees' strikes during a collective labor dispute
During a collective labor arbitration dispute employees can conduct a one-hour warning legitimate strike consisting of no more than 50 employees. The employer must be warned in writing by employees on the beginning of a one-hour warning strike no later than 3 business days in advance.
2. Digital assets and informatization activity
Business entities and governmental control
Individual entrepreneurs and legal entities engaged in digital mining activities can only be subjects of medium or large businesses.
Governmental control on verification and supervision of the subjects of control and supervision activities for compliance with the requirements of the Kazakhstan laws is conducted in the digital assets activities. Such control may apply prompt response measures in the course of its implementation.
Electricity purchase by miners
The Law on Electricity of RK is supplemented[2] with provisions which regulate the purchase of electricity by digital miners.
According to the Law, digital miners acquire electrical energy:
1) within the established quotas determined by the system operator;
2) produced outside the RK within the framework of the technical capability of the unified electric power system of the RK, determined by the system operator;
3) from energy producing organizations using RES;
4) at the financial and settlement center for the support of RES;
5) for generating plants that are not connected to the unified electric power system of the RK, with the exception of energy producing organizations connected to the unified electric power system of the RK as of 1st January 2023.
At the same time, the volume of purchased electricity must be at least 1 megawatt of average daily power purchased at centralized auctions of electric energy by the price increase auction method. Digital miners must have automated systems for commercial accounting of electrical energy, telecommunications systems that ensure their unification with systems, a load disconnect device installed at the system operator and at the power transmission organization when connected to their networks.
Technical conditions for connection to electrical networks for digital miners are issued by energy transmission organizations exclusively from transformer substations with a voltage of 35 kilovolts and higher with a permitted power of at least one megawatt in accordance with the legislation of the RK.
Licensing
Operations in the digital assets will now be a licensed activity.
The following permits have been added to the Kazakhstan laws on permits and notifications[3]:
Ø License to carry out digital mining activities;
Ø Permission to issue and circulate secured digital assets.
3. Maximum auction prices for RES facilities[4]
The maximum auction prices for RES facilities are as follows:
Ø Wind power plants converting wind energy – KZT/kW*hour 22.68 (without VAT);
Ø Photovoltaic converters of solar energy for conversion of solar radiation energy - KZT/kW*hour 34.61 (without VAT);
Ø Hydroelectric power plants using the hydrodynamic energy of water – KZT/kW*hour 41.23 (without VAT);
Ø Biogas plants - KZT/kW*hour 32.23 (without VAT).
- Law of the Republic of Kazakhstan No. 199-VII dated 15 February 2023 "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the Issues of Simplifying the Procedure for Resolving Labor Disputes and Conflicts." Enters into force on 18 April 2023.
- Law of the Republic of Kazakhstan No. 194-VII dated 6 February 2023 “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Digital Assets and Informatization”. Enters into force on 1 April 2023.
- Law of the Republic of Kazakhstan “On Permits and Notifications”.
- Order of the acting Minister of Energy of the Republic of Kazakhstan No. 70 dated 15 February 2023 “On Amendments to the Order of the Minister of Energy of the Republic of Kazakhstan dated 30 January 2018 No. 33 “On Approval of Maximum Auction Prices”. Enters into force on 5 March 2023
