Legal Alert: March 2019

SIGNUM regularly provides Legislative/Regulatory Alerts to keep Clients informed about important laws and regulatory changes in the Republic of Kazakhstan (“RK”). This Alert includes recent developments introduced in March 2019 related to:

1. Marking of goods by means of identification in the EAEU

2. Trade and economic cooperation between Kazakhstan and Russia in the field of oil and oil products supply

3. Recording of foreign trade transactions for export control purposes

4. Government procurement

5. Formation and maintenance of registers for government procurement

6. Tenge base rate

On 16 March 2019, the Law on the Ratification of the Agreement on Marking of Goods by Means of Identification in the Eurasian Economic Union (EAEU) entered into force.

The Agreement on marking defines the procedure by which goods will be marked with unified means of identification within the EAEU. This Agreement applies to legal entities and individual entrepreneurs engaged in the production and (or) turnover of goods under the item “Garments, clothing accessories and other products from natural fur”.

2. Trade and economic cooperation between Kazakhstan and Russia in the field of oil and oil products supply²

On 16 March 2019, the Law on Ratification of the Protocol on Amendments to the Agreement between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on Trade and Economic Cooperation in the Supply of Oil and Oil Products to the Republic of Kazakhstan entered into force.

Significant changes were made to Article 6 on protection of the environment and national security. The Protocol excluded Appendices 2 and 3 in relation to lists of petroleum products prohibited for export from the Russian Federation to the Republic of Kazakhstan and petroleum products prohibited for export from the Republic of Kazakhstan outside the customs territory of the Customs Union.

3. Recording of foreign trade transactions for export control purposes³ 

On 4 March 2019, the Order on Approving the Rules and Forms for Recording Foreign Trade Transactions for Export Control Purposes entered into force.

The rules were developed in accordance with the Law of the Republic of Kazakhstan dated 21 July 2007 “On Export Controls” and outlined the procedure for Kazakhstani participants in foreign economic activity to keep records of foreign trade transactions with products, subject to export control.

Additionally, foreign trade transactions recording form was also approved.

4. Government procurement⁴

On 1 March 2019, the Order on Amendment of the Rules for Implementing Government Procurement entered into force.

Major changes were made in cases when akims are appointed as chairmen of the competition commission:

• In cases where the allocated amount for public procurement through a competition method exceeds 800,000 MCI, akims of the relevant administrative-territorial unit should be appointed
  

• In cases where the allocated amount for public procurement through a competition method exceeds 1,600,000 MCI, akims of cities of republican significance and the capital should be appointed.
  

• The Order also established criteria for helping to determine winners in case of parity, for example:
  

• if the conditional prices of competitive fee proposals are equal, the winner is the participant who has more experience as a general contractor in the market for goods, works, services, including similar types of goods, works, services that are the subject of the competition
  

• with equal experience as a general contractor, the winner is the bidder who has a larger amount of taxes paid for the four years preceding the previous year, according to data from the information systems of the state revenue bodies
  

• in case of equality of taxes paid, the winner is the bidder, whose application for participation received earlier than applications of other participants
  

Most of the other changes are of clarifying nature and bring the provisions of the Rules in line with the current legislation on government procurement.

5. Formation and maintenance of government procurement registers⁵

On 16 March 2019, the Order on Amending the Rules for Formation and Maintenance of Government Procurement Registers entered into force.

According to the changes, government procurement registers are divided into the following types:

• The customer register
  

• The government procurement contracts register
  

• The unfair participants of government procurement register
  

• The qualified potential suppliers register
  

• The complaints register
  

In accordance with this list, the Rules in paragraphs 15 and 16 on the register of unfair participants of government procurement are mentioned in the new edition and supplemented with Chapter 7 “The procedure for formation and maintenance of the complaints register”.

6. Tenge base rate⁶

The National Bank of Kazakhstan retained the tenge base rate at 9.25% with a fixed interest rate with a constant interest rate band +/- 1 p.p.

Any further decisions on the tenge base rate will be made based on dynamics of actual inflation, its forecast values and the extent to which risk scenarios will be implemented. This will be announced on 15 April 2019 at 5PM (Astana time).

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please note that Kazakhstan is an emerging economy, and its legislation and legal system are in constant development. Should you have any questions or want to discuss matters addressed in this Client Update, please contact us.

1. Law of the Republic of Kazakhstan No.230-VI dated 1 March 2019 “On Ratification of the Agreement on Marking of Goods by Means of Identification in the Eurasian Economic Union”
2. Law of the Republic of Kazakhstan No.228-VI dated 1 March 2019 “On Ratification of the Protocol on Amendments to the Agreement between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on Trade and Economic Cooperation in the Supply of Oil and Oil Products to the Republic of Kazakhstan dated 9 December 2010”
3. Order of the Minister of Industry and Infrastructure Development of the Republic of Kazakhstan No.76 dated 13 February 2019 “On Approving the Rules and Forms for Recording Foreign Trade Transactions for Export Control Purposes”
4. Order of the First Deputy Prime Minister of the Republic of Kazakhstan - Minister of Finance of the Republic of Kazakhstan No.142 dated 27 February 2019 “On Amendments to the Order of the Minister of Finance of the Republic of Kazakhstan No. 648 dated December 11, 2015 “On Amending the Rules for Formation and Maintenance of Government Procurement Registers”
5. The order of the First Deputy Prime Minister of the Republic of Kazakhstan - Minister of Finance of the Republic of Kazakhstan No.160 dated 1 March 2019 “On Amendments and Addenda to the Order of the Minister of Finance of the Republic of Kazakhstan No. 694 dated December 28, 2015 “On Amending the Rules for Formation and Maintenance of Government Procurement Registers"
6. Press Release of the National Bank of the RK No.7 dated 4 March 2019.