New in Licensing Legislation

Dear Sirs,

In this issue we would like to draw your attention to recent amendment to the licensing rules.

Introduction

The amendments were introduced by the Law of the Republic of Kazakhstan “On amendments to certain legislative acts of the Republic of Kazakhstan on improvement of licensing system” No. 461-IV ЗRK dated 15.07.2011 (the “Law”). This Law is effective from 31 January 2012, except certain provisions, indicated in the Law, which will become effective from the date of its first official publication (30 July 2011).

The law is aimed to improve and simplify the current licensing procedure, decrease administrative burden for entrepreneurships.

What is new?

Procedure to follow upon introduction of new licensed activity

Earlier in the case of introduction of new licensed type of activity, the procedure of license receiving for business entities, carrying out such activity was not established. As a result,

companies were in breach of the licensing rules immediately upon introduction of such rules.

Now, there is a “moratorium” period to allow company to conduct its activity while they apply and receive the licenses. This period is limited by forty five working days from the date when qualification requirements under certain licensed activity were introduced.

No notarization of copies of documents is required

Requirement of submission of notarized copies of documents for receiving permitting documents is cancelled with alternative option of submission of original documents for checking the identity. Submission of notarized copies is required only upon failure to provide originals.

Terms of approval by the state bodies and license granting

Term for state bodies to approve license application is decreased from twenty five working days to ten working days from the application date, irrespectively who is applicant – small or large business entity.

Term to grant the license and/or annex to the license is decreased to fifteen working days, including small business entities. This decrease of terms does not apply to the licenses in the sphere of atomic energy use, financing sphere and activity, concentration of financial resources where terms remained to be thirty working days.

Term to issue a duplicate of the license and/or annex to it is decreased from ten working days to two working days.

Electronic procedures to apply for license were eliminated.

If authorities failed to issue a license within established term

In the event if license and/or its annex were not issued by the licenser within five working days, the license shall be automatically deemed as issued. In such case document, confirming legality of performing the licensed type of activity would be document confirming the receipt of license application.

The same principle applies if state authorities approving the license application failed to comply with the established terms.

The actions of licensees in the case of branch establishment

In the event if branch office of the licensee is established or change of location, Law establishes an obligation of the licensee to notify the licenser within ten working days enclosing the documents, confirming its compliance with the qualification requirements. Upon receiving them, the licenser reviews the conformity with qualification requirements and includes information to the register of licenses.

To attention of the companies which perform their activity in architecture, town planning and construction

The Law establishes special conditions for the licenses in mentioned areas mainly by dividing them into three categories. The division between categories is done by licensor.

Therefore, companies engaged in the mentioned activity shall apply for re-issuance of their licenses within six months from the effective date of the Law, namely, by 31 July 2012.

Duties of licensees in case of exclusion of activity from the list of licensed activity

In the case of exclusion of activity from the list of licensed activity, licensee shall return the license to the licenser within ten working days from the date of such exclusion.

Please be advised that in the event if licensee did not apply for re-issuance of the license and/or did not return licenses when required, they would be subject to imposition of administrative sanctions in accordance with the administrative code.