Legislative News

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

The following 280 legal acts were adopted in August 2010:

•\tDecrees of the President of the Republic of Kazakhstan – 8;

•\tResolutions of the Government of the Republic of Kazakhstan – 66 (3 of which are not effective yet);

•\tOther regulatory legal acts.

Most of these regulatory legal acts concern 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:

TAXI DESIGN

Order of Acting Minister of Transport and Communications of the Republic of Kazakhstan dated 30 June 2010 № 262 «On Amendments to Order of Acting Minister of Transport and Communications of the Republic of Kazakhstan dated 10 March 2004 № 113-I «On Approval of Rules of Transportation of Passengers and Luggage by Road Transport » (effective from 10.08.10).

In accordance with amendments to Rules of Transportation of Passengers and Luggage by Road Transport taxi shall be decorated by belt consisting of black and yellow boxes arranged in zigzag order of the following size: height – 30 centimeters; length – not less than 100 centimeters.

EXEMPTION FROM VAT IN THE FRAMEWORK OF CUSTOMS UNION

Order of the Minister of Finance of the Republic of Kazakhstan dated 16 July 2010 № 351 «On Approval of Rules of Exemption from Payment of Value Added Tax on Goods Temporary Imported to the Territory of the Republic of Kazakhstan».

Rules were elaborated in accordance with item 3 Article 276-15 of the Code of the Republic of Kazakhstan «On Taxes and Other Compulsory Payments to the Budget» (Tax Code). They establish procedure of exemption from payment of value added tax upon temporary import of goods, including transport vehicles to the territory of the Republic of Kazakhstan from the territory of member states of Customs Union.

PRESIDENTIAL AWARD «ALTYN SAPA»

Resolution of the Government of the Republic of Kazakhstan dated 28 July 2010 № 757 «On Amendments to Resolution of the Government of the Republic of Kazakhstan dated 31 July 2009 № 1167» (effective from 07.08.10)

Rules on preparation, submission and preliminary assessment of materials on competitors for award of the President of Republic of Kazakhstan «Altyn Sapa» were amended by Rules oo Preparation, Submission and Preliminary Expertise of Materials and Products Presented at Regional and Republican Competition-Exhibition «Best Goods of Kazakhstan».

INVESTMENT PREFERENCES: TYPES OF ACTIVITY

Resolution of the Government of the Republic of Kazakhstan dated 6 August 2010 № 809 «On Amendments to Resolution of the Government of the Republic of Kazakhstan dated 8 May 2003 № 436» (effective from 12.08.10 )

List of priority types of activity in accordance with level of classes of standard industrial classification of economic activities, in accordance with which investment preferences are granted, as well as maximum investment volumes are specified in a new redaction in accordance with Appendices 1 and 2 .

REQUIREMENTS TO EMITTERS AND THEIR SECURITIES WERE AMENDED

Resolution of the Board of Directors of the Agency of the Republic of Kazakhstan on Regulation and Control over Financial Market and Financial Organizations dated 25 June 2010 № 93 «On Amendments to Resolution of the Board of Directors of the Agency of the Republic of Kazakhstan on Regulation and Control over Financial Market and Financial Organizations dated 26 May 2008 № 77 «On Requirements to Emitters and Their Securities Allowable (Allowed) for Circulation on Stock Exchange as well as to Some Categories of Stock Exchange List » (effective from 12.08.10)

Requirements to emitters and their securities allowable (allowed) for circulation on stock exchange as well as to some categories of stock exchange list were changed. In particular, in accordance with amendments if share is in this category of official list of stock exchange, reduction of owned capital is allowed: financial organization upon compliance with prudential regulation on capital adequacy established by authorized body on regulation and control over financial market and financial organizations; emitter that is not financial organization up to the value equal to seventy percent of amount equivalent to eight million five hundred sixty thousand monthly calculation indices, but not lower than charter registered of emitter in accordance with financial reporting on the last reporting date approved by auditors’ report.

ACTIVITY LICENSED BY MINISTRY OF OIL AND GAS AND MINISTRY OF INDUSTRY AND INNOVATIVE TECHNOLOGIES

Resolution of the Government of the Republic of Kazakhstan dated 23 August 2010 № 826 «On Amendments to Some Decisions of the Government of the Republic of Kazakhstan» (effective from 24.08.10)

In accordance with amendments to Rules of Licensing of Some Types of Activities in the Industrial Sphere list of types of activity licensed by the Ministry of Oil and Gas of the Republic of Kazakhstan is given in a new redaction. List of activities licensed by the Ministry of Industry and Innovative Technologies of the Republic of Kazakhstan is also given in a new redaction.

AMENDMENTS ASSOCIATED WITH CUSTOMS UNION

Resolution of the Government of the Republic of Kazakhstan dated 19 August 2010 № 825 «On Amendments to Resolution of the Government of the Republic of Kazakhstan dated 19 March 2003 № 269»

In accordance with amendments to the List of Imported Goods, in accordance with which value added tax is paid by offset method in accordance with the procedure established by Code of the Republic of Kazakhstan dated 12 June 2001 «On Taxes and Other Compulsory Payments to the Budget” words «Code of goods in accordance Goods Classifier for Foreign Economic Activity of the RK” were replaced by words «Code of goods in accordance Goods Classifier for Foreign Economic Activity of the CU”.

SUBSURFACE USE LAW: LIST OF REGULATORY LEGAL ACTS TO BE ELABORATED

Order of Prime Minister of the Republic of Kazakhstan dated 28 August 2010 № 120-r “On Measures of Implementation of Law of the Republic of Kazakhstan dated 24 June 2010 «On Subsurface and Subsurface Use »

List of regulatory legal acts, adoption of which is required for implementation of Law of the Republic of Kazakhstan dated 24 June 2010 «On Subsurface and Subsurface Use».

INTERNATIONAL LAW

Draft Law of the Republic of Kazakhstan «On Ratification of Agreement between the Republic of Kazakhstan and Republic of Korea on Mutual Legal Assistance in Criminal Matters» (16 August 2010)

Agreement is aimed at establishment of legal basis for cooperation between competent bodies of Kazakhstan and Korea on issues of information exchange and rendering of legal assistance in crime investigation.

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 Amendments to the Labor Code of the Republic of Kazakhstan » (26 August 2010)

Main aim of this draft Law is improvement of legal regulation of labor relations. Draft Law is oriented on stimulation of economic activity of members of society, development of labor productivity, production efficiency, progressive development of economy on the whole by increase of social and economic guarantees of employees and improvement of their labor conditions.

Brief on Draft Law of the Republic of Kazakhstan «On Information and Information Protection» (August 2010)

Aim of this draft Law adoption is regulatory and legal consolidation of legal status of information, system of information protection, regulation of competence of state bodies in the sphere of information, information protection and provision of information protection.

Draft law will regulate social relations appearing upon execution of right for search, obtaining, production and distribution of information, use of information as object of civil rights, provision of information protection.

KEY APPOINTMENTS

The following appointments were made in August 2010:

•\t-Mr. N.Abykayev was appointed to the position of Chairman of National Security Committee of the Republic of Kazakhstan.

•\tMr. S.S.Khasenov was appointed to the position of Vice-Minister of Agriculture 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.