Legislative News

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

More than 100 regulatory legal acts of different nature were adopted in July 2012 and they concern both a public sector and a private sector.We tried to identify most useful for your business in Kazakhstan.

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

TAX

1) RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN No.960 DATED 23 JULY

According to the amendments, Republic of Singapore was excluded from the list of the states with preferential taxation.

The Resolution is effective from 1 January 2012.

In implementation of the Law of the Republic of Kazakhstan dated 9 January 2012 «On gas and gas supply» the Government of the Republic of Kazakhstan adopted the following resolutions:

GAS

1) «ON APPROVAL OF LIMIT PRICE OF WHOLESALE DISTRIBUTION OF LIQUEFIED PETROLEUM GAS IN THE LOCAL MARKET» No.980 dated 27 July 2012:

Starting from 30 September 2012, the limit price is approved in the amount of KZT35 805 per ton excluding value-added tax;

2) «ON APPROVAL OF RULES AND CONDITIONS OF ASSOCIATED GAS TRANSFER TO THE INVESTORS WITHIN PRIVATE-PUBLIC PARTNERSHIP IN GAS AND GAS SUPPLYSPHERE» No.913 dated 5 July 2012:

Decision of authorized body on transfer of commercial and (or) liquefied petroleum gas to an engaged investor for further use within private-public partnership in gas and gas supply sphere is made only under the condition that such investor accept commitments on production of hydrocarbon chemistry, oil and gas chemistry, as well as high value-added production and is exercised on general conditions, established by the Rules.

3) «ON APPROVAL OF RULES OF LIQUEFIED PETROLEUM GAS SUPPLY PLANNING IN THE LOCAL MARKET OF THE REPUBLIC OF KAZAKHSTAN» No.912 dated 5 July 2012.

Supply plan is developed monthly by the authorized body, is approved not later than 25thdate of the month, prior to the planning, and on this date is sent to the supplier, mayors of the regions, towns, piped gas organizations and is to be placed on website of the authorized body.

Accredited piped gas organizations possess the right of liquefied petroleum gas acquisition, implemented in accordance with the supply plan.

4) «ON APPROVAL OF RULES ON SUBMISSION OF INFORMTION ON MONITORING, TRANSPORTATION (TRANSFER), STORAGE AND SALE OF COMMERCIAL, LIQUEFIED PETROLEUM AND LIQUEFIED NATURAL GAS» No. 906 dated 4 July 2012;

Monitoring of the Authorized body includes monitoring the volume of production, transportation, storage, sale (including export and import) of commercial, liquefied petroleum and liquefied natural gas, and as well as producer and consumer prices on commercial, liquefied petroleum and liquefied natural gas, sold in the Republic of Kazakhstan and internal needs of the Republic of Kazakhstan in commercial and liquefied petroleum gas.

5) «ON APPROVAL OF THE RULES ON PRICE DETERMINATION FOR CRUDE AND COMMERCIAL GAS, ACQUIRED BY NATIONAL OPERATOR WITHIN PRIORITYRIGHTOF THE STATE» No. 948 dated 19 July 2012.

In order to provide energy security and to satisfy the internal needs in commercial gas, the Republic of Kazakhstan has a priority right before other parties on acquisition of alienated crude gas, owned by the subsurface users, as well as commercial gas, produced by the subsurface users during conversion of produced by them crude gas, owned by them in accordance with legislation of the Republic of Kazakhstan on subsurface and subsurface use and contracts on subsurface use.

REGULATORY COMPLIANCE

LAW OF THE REPUBLIC OF KAZAKHSTAN No.36-V DATED 10 JULY 2012 «ON INTRODUCTION OF AMENDMENTS TO CERTAIN LEGISLATIVE ACTS OF THE REPUBLIC OF KAZAKHSTAN ON DECREASE OF APPROVAL DOCUMENTS AND OPTIMIZATION OF CONTROL AND SUPERVISORY FUNCTIONS OF AUTHORIZED BODIES».

Amendments are introduced by the Law to 89 regulatory legal acts.

Law prohibits conducting of scheduled inspections in relation to small business enterprises within three years from the date of state registration (except established legal entities in order of reorganization and successors of reorganized legal entities), licenses cancellation for certain types of activity, change of licenses into electron form, as well as change into notification procedure for 40 types of licenses.

Entities, conducting business in notification procedure in accordance with Law, are to file notification on activity starting in accordance with Law of the Republic of Kazakhstan “On administrative procedures” within three months from the date of coming into force of the Law.

Administrative responsibility for construction without maintaining of technical and designer supervisions is introduced.

Criteria of referring to business entities were reviewed: criteria «average annual asset value» is changed into «average annual income» with establishment of the following threshold amount: for small business –60 thousand of MCI, for big business –over 3 mln. of MCI. Entities, not coming within parameters of small or big business will be considered as medium-sized business.

Except certain items, for which are established a later deadline, the indicated Law comes into effect from 08 August 2012.

COURTPRACTICE

REGULAT ORY RESOLUTION OF SUPREME COURT OF THE REPUBLIC OF KAZAKHSTAN No.3 DATED 27 JULY 2012 «ON CONSIDERATION OF COMPLAINTS BY COURTS ON ACTIONS (FAILURE TO ACT) AND DECISION OF PROSECUTOR, BODIES OF INQUIRY AND INVESTIGATION (ARTICLE OF 109 OF CRIMINAL PROCEDURAL CODE) »

Indicated Regulatory resolution is adopted in order to provide judicial rights protection, freedom and legal interests of individuals and legal entities during pre-trial procedure on criminal cases, as well as performance of equal litigation of complaints consideration on action (failure to act) and decision of prosecutor, bodies of investigation and inquiry.

According to the resolution, consideration of complaints by courts on effected actions (failure to act) in the stage of pre-trial procedure on criminal cases, as well as accepted decisions of the prosecutor, bodies of investigation and inquiry are one of the methods of realization of everyone’s rights on judicial protection, established in Constitution of the Republic of Kazakhstan by Criminal Procedural Code of RoK. Individuals have a right to go to the court with compliant (citizens of the Republic of Kazakhstan, foreigners, stateless persons), if their personal rights and freedom are affected by actions (failure to act) and by decisions of the prosecutor, bodies of investigation and inquiry, as well as organizations, if their legal interests are affected by indicated acts.

Regulatory resolution comes into effect from 14 July 2012.

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.