Legislative News

This CLIENT UPDATE includes amendments to the legislation of the RK and key appointments in February 2010.

The following 411 legislative acts were adopted in January 2010:

• Laws – 10

• Decrees of the President of the Republic of Kazakhstan – 5;

• Resolutions of the Government of the Republic of Kazakhstan – 83 (11 of which have not been enacted);

• Other regulatory legal acts.

Most of these regulatory legal acts are concerning public sector, but among them 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:

Law of the Republic of Kazakhstan dated 20 January 2010 № 239-IV «On Amendments to Some legislative Acts of the Republic of Kazakhstan on Issues of Simplification of State Registration of Legal Entities and Registration of Branch Offices and Representative Offices » (effective from 13.02.10)

Law was elaborated for rising of efficiency of legal entities registration, and correspondingly for establishment of optimal conditions of their functioning, avoidance of unnecessary formalities of legal entities registration, registration of branch offices and representative offices existing in the legislation. Period of state registration (re-registration) of legal entities, registration (re-registration) of branch offices and representative offices as well as issuance of documents was changed.

Law of the Republic of Kazakhstan dated 20 January 2010 № 240-IV «On Legal Expert Activity in the Republic of Kazakhstan» (effective from 02.02.10)

Law regulates social relations on conduction of legal expert activity in the Republic of Kazakhstan. Legal expert activity includes: 1) proceedings of legal expertise with regard to criminal, civil cases and cases on administrative violations; 2) scientific investigation in the sphere of legal expertise; 3) scientific methods and information support of legal expertise; 4) selection, professional development and enrichment of legal experts. Objective of legal expert activity is proceedings with regard to criminal, civil cases and cases on administrative violations by means of specific scientific knowledge.

Decree of the President of the Republic of Kazakhstan dated 1 February 2010 № 922 «On Strategic Development Plan of the Republic of Kazakhstan until 2020 » (effective from 01.02.10)

Strategic Development Plan of the Republic of Kazakhstan until 2020 was approved for implementation of Development Strategy of Kazakhstan until 2030. Strategic Development Plan of Kazakhstan until 2020 establishes key directions and strategic goals of the next decade. State efforts will be focused on five key directions: – preparation to post-crisis development; – accelerated diversification of economy; – investments to the future; – services for citizens; – maintaining of interethnic concord, safety, stability of international relations.

Resolution of the Government of the Republic of Kazakhstan dated 4 February 2010 № 66 «On Amendments to Resolution of the Government of the Republic of Kazakhstan dated 30 October 2009 № 1729» (effective from 04.02.10)

Rules of organization and procurement of medicines, preventive (immunobiological, diagnostic, disinfecting) medications, medical devices and medical equipment, pharmaceutical services on rendering of guaranteed volume of free medical treatment were amended by provision, according to which procurement of medicines and medical devices for the period of thirty days demand at prices not exceeding prices established by authorized body is allowed in case if Client has not remainders of medicines and medical devices for timely rendering of guaranteed volume of free medical treatment (first aid, institutional care, care substituting hospital) confirmed by territorial subdivisions of authorized body in the sphere of medicines circulation.

Resolution of the Board of the Agency of the Republic of Kazakhstan on Regulation and Control over Financial Market and Financial Organizations dated 29 December 2009 № 264 «On Amendments to Resolution of the Board of the Agency of the Republic of Kazakhstan on Regulation and Control over Financial Market and Financial Organizations dated 2 September 2008 года № 140 «On Lower Limit of Authorized and Own Capital of Second-Tier Banks» (effective from 10.02.10)

In accordance with amendments minimum amount of own capital was established for banks without branch offices starting from 1 October 2009: for acting banks, amount of own capital of which was not less than 10 000 000 000 (ten billion) tenge on 1 October 2009 in the amount of 2 000 000 000 (two billion) tenge under conditions: availability of amount of deposits received from legal entities and physical persons registered outside of Astana and Almaty except for bank special purpose deposits of subsidiaries and inter-bank deposits in the amount not less than 50% (fifty percent пятидесяти) of bank obligations, availability of credits issued to borrowers not affiliated with bank registered outside of Astana and Almaty except for inter-bank credits and reverse repo operations in the amount not less than 50% (fifty percent) from amount of deposits received from legal entities and physical persons registered outside of Astana and Almaty, and bank authorized capital.

Joint Order of the Minister of Finance of the Republic of Kazakhstan dated 2 February 2010 № 32 and Minister of Economy and Budget Planning of the Republic of Kazakhstan dated 4 February 2010 № 27 «On Approval of Forms of Check Lists for Tax Inspections» (effective from 03.02.10)

Forms of check lists were approved: 1) for complex or issue-related inspection in accordance with Appendix 1 to Order; 2) for counter inspection in accordance with Appendix 2 to Order; 3) for issue-related inspections by separate issues in accordance with Appendix 3 to Order; 4) for chronometry inspection in accordance with Appendix 4 to Order. Check list includes limiting list of requirements to activity of private entrepreneurs specified by laws of the Republic of Kazakhstan and Resolutions of the Government of the Republic of Kazakhstan, non-observance of which results in threat for life and health of population, environment, property interests of citizens, legal entities and state.

Resolution of the Government of the Republic of Kazakhstan dated 23 February 2010 № 114 On Approval of List of Subsoil Blocks to be Put for a Tender (effective from 23.02.10)

In accordance with law of the Republic of Kazakhstan dated 27 January 1996 «On Subsoil and Subsoil Use» Government approved list of subsoil blocks to be put for a tender.

INTERNATIONAL LAW

Resolution of the Government of the Republic of Kazakhstan dated 26 February 2010 № 138 On Signing of Agreement between the Government of the Republic of Kazakhstan and Government of the Kingdom of Norway on International Road Transport (effective from 26.02.10)

Transport operator that has a right to conduct international motor transport operations in the state of registration may conduct the same operation in/from the territory of host state, transit across the territory of host state or to/from third countries under conditions specified in the present Agreement. Transport operator and members of transport vehicles crews should observe national legislation of host state in case of motor transport operations in the territory of this state.

Resolution of the Government of the Republic of Kazakhstan dated 27 February 2010 № 144 On Accession of the Republic of Kazakhstan to European Cultural Convention dated 19 December 1954 (effective from 27.02.10)

Each Party of Convention to the extent possible:

а) encourages study of languages, history and culture of other Parties of Convention and provides corresponding means to such Parties for promotion of such study in its territory, and

b) encourages study of own language or languages, history and cultures in the territory of other Parties of Convention and provides corresponding means to the citizens of these Parties to conduct such study in its territory.

DRAFT REGULATORY LEGAL ACTS

Also we would like to provide additional information about forthcoming regulatory legal acts.

Brief on Draft Law of the Republic of Kazakhstan «On State Regulation of Production and Turnover of Several Types of Oil Products» (February 2010)

New draft law stipulates transfer to new operational scheme of oil refining and oil products sale aimed at regulation of activity of unproductive intermediaries, modernization of refineries and development of competitive relations in this market.

Draft law will establish state regulation of retail price of lubricants (by establishment of cap-rates). At the same time state regulation is not specified for wholesale activity.

Brief on Draft Law of the Republic of Kazakhstan «On Science»

The aim of this draft law adoption is establishment of conditions for development of competitiveness and balance in the system of science that will ensure acquisition, generation and transfer of knowledge required for sustainable social and economic development of the country as well as efficient manufacturing application.

KEY APPOINTMENTS

The following appointments were made in February 2010:

• B.A. Nakymbekov was appointed to the position of Chairman of Land Management Agency of the Republic of Kazakhstan;

• Mr. A.V. Shkarupu was appointed to the position of Chairman of the Agency on Regulation of Natural Monopolies of the Republic of Kazakhstan.

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.