Monthly Legal Alert: April-May-June 2020

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 April-May-June 2020 related to:

1.       New Administrative Procedure Code

2.       Changes to the Civil Procedure Code to Introduce Modern Court Technologies and Reduce Unnecessary Court Procedures and Costs

3.       Changes Improving Enforcement Proceedings and Criminal Law

4.       Changes to the Consumer Protection Regulation

5.       Amendments to the Rules of Organization of Activities of Payment Organizations

6.       Changes in the Regulation of Insurance Activities and the Securities Market

7.       Amendments to the Auction Rules for Subsoil Plots for Operations on Solid Minerals Exploration or Production

8.       New Registration Rules for Legal Entities and Branch and Representative Offices

9.       New Rules for the Provision of State Services in Subsoil Use

10.    New Rules for the Provision of Public Services in Environmental Protection

11.    New Rules for Issuing Licenses

12.    New Apostillization Rules

13.    Changes to the Employment Law

1.       New Administrative Procedure Code[1]

The new Code will come into force on 1 July 2021 (the current Law on Administrative Procedures[2] remains in effect until then). Unlike the law, the new Code regulates the resolution of disputes in administrative justice. In addition to the procedure for considering appeals by administrative bodies or officials and appealing to the higher administrative bodies, it stipulates the subsequent process of reviewing the complaints by the state courts (administrative justice).

The courts will have an active role, which will allow them to collect case evidence on their initiative if the presented evidence would be found insufficient.

The new Code also provides for the possibility of concluding an agreement on conciliation, mediation, or settlement of a dispute through a participatory procedure at all stages of the administrative process before a decision is made.

The new Code is designed to increase the effectiveness of protecting the rights of citizens and legal entities when considering disputes with authorities by the higher administrative bodies and in courts.

2.       Changes to the Civil Procedure Code [3]

Recent changes in the Civil Procedure Code can be divided into the following groups:

1)       The use of modern technology during the trial is now regulated at the legislative level, in particular, the use of modern technology devices, the electronic protocol, the court order in electronic form;

2)       The court of the Astana International Financial Center is indicated as one of the authorized bodies to resolve a dispute along with arbitration, mediation, and a participatory procedure;

3)       New articles regulating the activities of bailiffs are included;

4)       The terms for some procedural actions have been reduced from 5 business days to 3;

5)       The court has received the power to examine some applications without summoning the parties:

  • Application for the restoration of the missed deadline;
  • Order on changes of the measures to secure the claim;
  • Correction of misspellings and obvious arithmetic errors in the court decision;
  • Indexation of awarded monetary amounts;
  • Application for reopening of the case due to newly discovered or new circumstances;

6)       The maximum amounts of claims in cases considered in simplified proceedings have been increased for legal entities from 700 MCI to 2000 MCI, and for individual entrepreneurs and citizens from 200 MCI to 1000 MCI.

7)       Articles on mediation were revised for optimization.

8)       In the case of postponing the hearing, such procedural actions like examination of the evidence shall not be repeated. Witnesses can only confirm that previously given testimonies are correct.

9)       The powers of the court of appeal were expanded:

  • The court has the right to reverse the decision in whole or in part and to leave the claim without consideration when plaintiff filed an application to recall the claim and such application was submitted to the trial court and was not resolved on the merits;
  • The court has the right to reverse the decision in whole or in part and to leave the claim without consideration due to the fact that the claim was signed by a person or filed by a person who does not have authority if the plaintiff did not support such a claim in the court of appeal.

10)   The grounds for reviewing the case due to newly discovered or new circumstances were expanded.

11)   Appeals of arbitral awards are made to the courts of appeal, which consider applications as a panel (at least three judges) according to the rules of procedure for reviewing judicial acts.

3.       Changes Improving Enforcement Proceedings and Criminal Law[4]

According to changes in the Labor Code, the labor inspector received the authority to issue an order on the payment of wages based on the results of the inspection. The order may be appealed to a higher inspector or in court. If the order is not appealed against and is not executed voluntarily, it is sent for enforcement to the justice authorities or to the regional chamber of private enforcement agents.

The Administrative Code was supplemented by defamation, an administrative offense of dissemination of knowingly false information discrediting the honor and dignity of another person or undermining his reputation. If this act is committed publicly or by using the social media networks or included accusations in committing corruption offenses or serious crimes, more severe sanctions will be applied to the offender, including an arrest for up to 30 days.

Amendments to the Law on Enforcement Proceedings and Status of Bailiffs were introduced, under which:

1)       The list of executive documents includes:

  • Writs of execution issued on the basis of the decisions made by the Court of the Astana International Financial Center;
  • Court orders of the Astana International Financial Center on measures to secure the claim or canceling of such measures;
  • Writ to the employer to pay salaries to the employees.

2)       Bailiffs summon the parties to their office or to the place where the actions are carried out by sending a subpoena. The law now specifies when such notices and subpoenas are considered delivered.

3)       Enforcement orders shall be returned to the collector in the event the debtor becomes a permanent resident outside of the RK except for the cases when the debtor owns property in the RK.

4)       In case of the delay of execution of the enforcement orders caused by the debtor, the penalty for individuals cannot exceed 360 MCI, for legal entities - 900 MCI, and for small and medium-sized businesses - 600 MCI.

5)       Amendments to the provisions on payment for a private enforcement agent's services stipulate that such payment shall not be recovered if the debtor voluntarily executes the enforcement document before presenting it for enforcement.

6)       A private enforcement agent is required to open a separate bank account for keeping the funds collected in favor of the creditors.

7)       A private enforcement agent is entitled to make audio, photo, and video recordings when executing enforcement orders related to eviction, settlement, demolition, and an inventory and seizure of property.

8)       The age limit for potential private enforcement agents was cancelled (previously it was necessary to be over 25 years old).

9)       The grounds for termination and cancellation of the private enforcement agent license are distinguished and specified.

10)   The detailed provisions related to the professional liability insurance of private enforcement agents include the minimum insurance amounts, cases of professional errors, incorrect or untimely paperwork, and illegal disclosure of confidential information.

11)   Temporary substitution of a private enforcement agent is now possible.

4.       Changes to the Consumer Protection Regulation

Changes have been made to a number of legislative acts, including the Civil and Administrative Codes, as well as the Law on the Protection of Consumer Rights. In particular, the Civil Code now provides for the protection of civil rights by compensating moral damage caused to a consumer by a violation of his rights and legally protected interests, which may be carried out by subjects of pre-trial settlement of consumer disputes.[5]

Article 190 of the Administrative Code was amended with a new violation – failure of the seller (manufacturer) to fulfill his obligations to display the required information, ensure the exchange or return of goods of appropriate and inadequate quality, and submit a written response to the claim.

The following changes have been made to the Law on Consumer Rights Protection[6]:

  • The Interdepartmental Council for the Protection of Consumer Rights will be developing proposals and recommendations as a new advisory board;
  • State control is introduced to ensure compliance with consumer protection laws in the form of unscheduled inspections and preventive control;
  • It is planned to create a unified information system for protecting consumer rights, designed to automate the process of receiving and considering consumer complaints, systematization, and registration at all levels of the system (effective from 1 January 1 2021);
  • The consumer has the right to refer to testimonies, photo and video recordings confirming the fact of the acquisition of goods, in the absence of a fiscal receipt or contract;
  • The detailed provisions on the compensation of moral damage include criteria for determining the compensation amount and compensation of the moral damage regardless of compensation of other losses, taking into account the circumstances and individual characteristics of the consumer.
  • Additional guarantees to consumers: free choice of the consumer, the seller is not allowed to stipulate the purchase of certain goods (works, services) by the compulsory purchase of other goods (works, services); producer’s responsibility for the quality of the goods (work, services) during the specified warranty period, shelf life or shelf-life; the seller’s obligation to post the contact details of the authorized body and the subjects of pre-trial settlement of disputes;
  • The public associations of consumers have the right to initiate testing of the quality and safety of goods (works, services), as well as consider consumer disputes as part of pre-trial conciliation.

5.       Amendments to the Rules of Organization of Activities of Payment Organizations[7]

Recent changes provide for a detailed registration procedure for payment organizations. In particular, the Rules are supplemented by a new Chapter 2-1, which contains the procedure for providing the public service “Inclusion into the Registry of Payment Organizations That Have Passed Registration with the National Bank of the Republic of Kazakhstan”, which provides for the basic requirements for the applicants.

6.       Changes in the Regulation of Insurance Activities and the Securities Market[8]

Changes affected such areas as:

  • Requirements for Software, Hardware, and Other Equipment: participants are required to organize safe work and ensure the safety and protection of collected data from unauthorized access;
  • Rules for the Implementation of Custodial Activities in the Securities Market: additional measures are provided to ensure the integrity of the management company (monthly reports and data analysis, monitoring of the obligations and control over the composition of assets);
  • Rules for Establishing a Risk Management System and Internal Control for Organizations Engaged in Brokerage and Dealer Activities in the Securities Market, Investment Portfolio Management Activities: second-tier banks and insurance organizations engaged in the life insurance industry are required to establish risk management systems;
  • Rules for the Implementation of Investment Portfolio Management Activities: management reassignment is allowed only in cases provided for by legislative acts of the Republic of Kazakhstan and (or) the investment portfolio management agreement; if the investment portfolio manager combines his activity with brokerage and (or) dealer activity in the securities market, such individual shall not simultaneously supervise both management of investment portfolio and brokerage and (or) dealer activity, except for the chief executive officer;
  • Prudential Standards of Insurance and Reinsurance organizations: established regulatory values ​​and calculation methods.

7.       Amendments to the Auction Rules for Subsoil Plots for Operations on Exploration or Production of the Solid Minerals[9]

The procedure for organizing and conducting the auction is supplemented by provisions on the planning of the auction related to the auction territories' determination. Also, the application for participation in the auction now needs to be accompanied by a guarantee issued by a second-tier bank of the RK or an insurance contract that ensures fulfillment of obligations to pay a signature bonus.

In addition, new provisions on the recognition of the auction result as invalid are included. The procedure for issuing licenses based on the results of the auction is now more detailed. If the territory of the exploration or production site (s) is fully or partially adjacent to populated areas and related territories located in a distance of one thousand meters and less, the winner of the auction must submit to the competent authority the signed agreement on socio-economic support of the local population.

8.       Legislation Changes to Improve Business Climate[10]

In order to improve business climate, the following legislative acts were amended.

The following changes have been made to the Land Code:

1)       The terms of consideration and approval in the procedure for granting the right to land use, changing the use purpose of the land plot, decisions on granting the land plot into ownership have been reduced;

2)       The procedure for the provision of a land plot for the construction within the boundaries of an inhabited locality (a requirement to provide architectural design and planning documentation, technical conditions for connecting to engineering networks and topography; the natural monopoly entities are required to provide technical conditions for connecting to engineering networks within 5 days);

3)       When acquiring rights to land plots that are in state ownership, at the tenders (tenders, auctions), a sale and purchase agreement is concluded on the basis of the auction protocol within 2 days;

4)       The order to take measures to use the land plot for its intended purpose must be registered (however, this requirement does not limit the rights of the owner of the land plot or land user to dispose of the land plot or land use rights and passes to the new owner).

The Budget Code was supplemented with provisions not allowing to develop a design and estimate documentation for budget investment projects for the implementation of which there is no confirmation from the central authorized body for budget execution for projects funded from the republican budget, and the local authorized body for budget execution for projects funded from the local budget.

In the Entrepreneurial Code, amendments were introduced to the chapters on the protection of competition, state support for industrial, innovative, and investment activities.

1)       The competence of the antimonopoly body has been supplemented with the powers to monitor prices in commodity markets;

2)       The definition of a high monopoly price now also includes non-reduction of the price for goods when such reductions became possible due to the cost reduction, changes in the composition of sellers and buyers, taxation, tariff, and non-tariff regulation;

3)       Industrial assembly of vehicles and agricultural machinery has been classified as an industrial and innovative activity supported by the state;

4)       The investment preferences granting conditions were supplemented by provisions on mechanical engineering enterprises, including the production of foundry products, where the state participation share does not exceed 50%;

5)       In addition, the clause stating that only a legal entity that carries out activities included in the list of priority activities approved by the Government of the Republic of Kazakhstan may apply for investment preferences has been excluded from the list of conditions;

6)       New provisions on the forms of control over compliance with the terms of investment contracts were added: in-house control based on reports and visits to the facilities of the investment projects;

7)       The procedure for exercising state control over compliance with the terms of investment contracts has been regulated in detail. In particular, in case of non-fulfillment or improper fulfillment of the working program of the investment contract, the authorized investment body sends a written notification indicating the violations and sets a three-month period for eliminating such violations.

The Law "On State Registration of Legal Entities and Record Registration of Branches and Representative Offices" now requires submission of an application for opening bank account and a copy of the contract for compulsory employee insurance against accidents when submitting the application for the state registration of a small and medium-sized business entity through the "electronic government" web portal.

According to the latest amendments to the Law "On Limited and Additional Liability Partnerships", the charter of a limited liability partnership may contain a procedure for resolving deadlock situations. In this case, the executive body must notify all participants of the partnership about the initiation of such a procedure by the participant.

The Law "On Architectural, Urban Planning and Construction Activities in the Republic of Kazakhstan" has been supplemented with provisions regarding state registry of construction projects - an electronic database of feasibility studies, standard projects and design (design and estimate) documentation for the construction of new facilities approved by the consolidated non-departmental expertise body (effective from December 31, 2020). In addition, a new definition of public investments in construction, funded from the republican and local budgets; targeted funds of non-state loans under a state guarantee or other state security; the National Fund of the Republic of Kazakhstan; funds for the realization of the concession projects.

The list of construction projects for which the preparation of design estimates is not required has also been detailed and expanded. The owner (customer, investor, developer) independently carries out the commissioning of these projects, except for cases when the construction and operation of these projects infringe on the rights of other citizens or contradicts state, public, and (or) private interests.

The list includes the construction of on-site communication lines; construction of mobile complexes of container, block and modular design, as well as one-story buildings (structures) for commercial, catering and consumer services, made from collapsible structures; construction of buildings or structures for temporary, seasonal or auxiliary purposes; construction of open-type parking lots for no more than fifty cars, as well as garages with boxes for no more than two cars; overhaul of linear engineering networks and structures on them, which does not require their relocation, changing of the depth and height, or pipe diameter; construction of small architectural forms and fencing of territories; construction of outdoor sports grounds, sidewalks, paving around buildings (structures); repair and replacement of units of technological or engineering equipment, for which the technological resource has been exhausted and which do not require reconstruction or re-profiling of the enterprise (workshop); redevelopment (re-equipment) of non-production premises, carried out in existing buildings which not affect (do not require) changes in load-bearing structures, etc.

According to the latest amendments to the Law "On Complex Entrepreneurial License (Franchising)", the clause prohibiting the participation of the licensee in the activities of the licensor's competitors has been removed from the licensee's obligations.

According to the latest amendments to the Law "On Advertising", the range of use of visual images or sound of the minors has been expanded. Now such use is allowed not only in social advertising and advertising of products for minors, but also in advertising of products (works, services) that will not have harmful effects on the physical and mental health of the minors.

In the Law "On State Registration of Rights to Real Estate", the article on the provision of information from the legal registry is supplemented providing for the release of the information on registered encumbrances and rights to real estate to any interested person upon request.

In addition, a special procedure for the electronic registration of transactions, provided for in Сlause 2 of Article 20 of this law applies only to transactions certified by a notary.

The Law "On Enforcement Proceedings and the Status of Bailiffs" was amended with provisions regarding the pledgee’s right to retain the pledged property within the liquid value (no more than 70% of the assessed value).

From the Law "On Rehabilitation and Bankruptcy", the requirement to offer a property complex as a single lot at least two times before selling it in separate lots has been excluded.

Amendments to the Law "On Public Procurement" affected the restrictions associated with participation in public procurement. Namely, to participate in public procurement of services of international rating agencies, financial services from one source, the providers shall have no outstanding obligations in enforcement proceedings or be registered in the unified registry of debtors. In addition, in the article on qualification requirements, exceptions were made to the requirement for work experience. In particular, in the case when the services being bid on through the public procurement require the potential supplier to have a license and (or) permission.

9.       New Rules for Registration of Legal Entities and Registration of Branches and Representative Offices[11]

The acting Minister of Justice approved new Rules for the Provision of Public Services for State Registration of Legal Entities and Registration of Branches and Representative Offices, which include application forms and lists of necessary documents required for registration. The service is provided in both paper and electronic form. The term for the provision of the service is 5 business days.

10.    New Rules for the Provision of State Services in Subsoil Use[12]

The Minister of Energy approved new rules for the provision of public services, affecting:

  • Transfer of the rights to subsoil use and objects related to the rights of subsoil use;
  • Signing of contracts for subsoil use for hydrocarbons and uranium mining;
  • Signing of additional agreements to subsoil use contracts for hydrocarbons and uranium mining.

The new rules provide for application forms, lists of required documents, terms of consideration, appeals, and other aspects of the standard for the provision of these services.

11.    New Rules for the Provision of State Services in Subsoil Use Except for Hydrocarbons and Uranium[13]

The Minister of Industry and Infrastructure Development approved the following new acts:

  • Registration Rules for Pledge Agreement of the Subsoil Use Rights for Exploration, Production, or Combined Exploration and Production for Groundwater, Therapeutic Mud and Solid Minerals;
  • Registration Rules for Pledge Agreement of the Subsoil Use Rights for Exploration, Production of Widespread Minerals;
  • Rules for Concluding Agreements on the Processing of Solid Minerals;
  • Rules for Issuing an Application for the Transformation of a Subsoil Plot;
  • Rules for Issuing a Permit for the Use of a Liquidation Fund;
  • Rules for Issuing a Permit for the Extraction of Rock Mass and (or) Movement of Soil in the Exploration Area Exceeding One Thousand Cubic Meters.

The new rules provide for application forms, lists of required documents, terms of consideration, appeals, and other aspects of the standard for the provision of these services.

12.    New Rules for the Provision of Public Services in Environmental Protection[14]

The Minister of Ecology, Geology, and Natural Resources approved the following new acts:

  • Rules for Issuing a License to Perform Work and Provide Services in Environmental Protection;
  • Rules for Issuing a License to Import into the Territory of the Republic of Kazakhstan from Countries that are not Members of the Customs Union, and Export from the Territory of the Republic of Kazakhstan to These Countries of Ozone-Depleting Substances and Products Containing Them;
  • Rules for Issuing a Permit for Work Using Ozone-Depleting Substances, Repair, Installation, Maintenance of Equipment Containing Ozone-Depleting Substances;
  • Rules for Issuing Environmental Permits for Category I Facilities;
  • Rules for Issuing Conclusions of the State Ecological Expertise for Facilities of the 1st Category;
  • Rules for Issuing Permits for Emissions into the Environment for Facilities of II, III and IV Categories;
  • Rules for Issuing Conclusions of the State Ecological Expertise for Facilities of II, III and IV Categories;
  • Rules for Issuing a License for the Export and Import of Hazardous Waste;
  • Rules for the Provision of Environmental Information.

The new rules provide for application forms, lists of required documents, terms of consideration, appeals, and other aspects of the standard for the provision of these services.

13.    New Rules for Issuing Licenses for the Operation of Mining and Chemical Industries[15]

The Minister of Industry and Infrastructure Development approved new rules, which provide for the application forms, a list of required documents, terms of consideration, appeals, and other aspects of the standard for the provision of this service.

14.    New Rules for Issuing Licenses for the Purchase of Electricity for Energy Conservation Purposes[16]

The Minister of National Economy approved new rules, which provide for the application forms, a list of required documents, terms for consideration, appeal, and other aspects of the standard for the provision of this service.

15.    New Rules for Issuing Licenses for Medical Services[17]

The Minister of Health approved new rules, which provide for the application forms, a list of required documents, terms of consideration, appeal, and other aspects of the standard for the provision of this service.

16.    New Rules for Providing Information on the Category of Business Entity[18]

The Minister of National Economy approved new rules, which provide for the procedure for the provision of services and appeal against decisions/actions of officials, as well as other aspects of the provision of this service.

17.    New Rules for Apostillization of Official Documents[19]

The acting Minister of Justice approved new rules for apostille of official documents issued by the justice authorities, other state bodies and notaries, which provide for the procedure for the provision of services and appeal against decisions/actions of officials, as well as other aspects of the provision of this service.

18.    New Rules for Licensing the Export and Import of Products Subject to Export Control[20]

The Minister of Industry and Infrastructure Development approved in a new edition of these Rules, which provide for the procedure for obtaining, the application form, the license form, as well as other aspects of the provision of this service.

19.    Changes to the Employment Law

Changes to the Labor Code

According to the latest amendments, the employment contracts can be made and modified in electronic form and signed with the electronic signature.

Article 44 of the Labor Code is supplemented by the obligation of the employer to temporarily transfer a pregnant woman (12 or more weeks of pregnancy), working on a rotational basis, to a five-day or six-day working week with payment for the work performed, but not lower than the average salary for the previous work. For the period waiting for the new position, she shall be exempted from the work while maintaining the average wage.

In addition, recall from the paid annual leave of a pregnant woman who provided the employer with a pregnancy certificate is not allowed (previously, a certificate was not required).[21]

Early termination of the employment contract by agreement of the parties is now possible only by sending a notice in compliance with the procedure provided for in Clause 2 of Article 50.

The procedure for termination of the employment contract at the initiative of the employer had been amended as well. In particular, upon termination in case of refusal to undergo a medical examination (alcoholic, narcotic, drug intoxication), the employer shall issue an act on the refusal of the employee. In addition, upon termination due to committing of guilty acts or omissions of the employee handling monetary or other values, abuse of power, the employer must issue an act of internal investigation.

The waiting period for the employer's response when terminating the employment contract at the initiative of the employee has been increased from 7 calendar days to 7 business days.[22]

According to the latest amendments to the Code of the Republic of Kazakhstan “On Administrative Offenses,” employment discrimination is expressed not only in violation of the employee’s right to equal pay for equal work, but also on providing equal working conditions, and entails the imposition of fines on officials and companies.

The New Edition of the Rules for Obtaining and Renewal of the Work Permits for Foreign Employees

A new version of these Rules introduced some changes and clarifications. In particular, the branches and representative offices of foreign legal entities were excluded from the definition of an employer. According to the latest changes, a foreign worker is an immigrant employed by an employer to carry out work functions in the Republic of Kazakhstan. The concept of managers is excluded from the new edition.

The list of cases when the permit is not issued is supplemented with the following reason: failure to fulfill obligations to replace foreign labor in the fourth category.

In addition, the forms of the permit itself, statements, notifications, and some other forms have changed.

20.    The Special Procedure for State Procurement and Changes in the Rules for State Procurement

The special state procurement procedure will be in effect until 31 July 2020 inclusive.

State procurement using a special procedure is carried out in one of the following ways:

1)       request for quotations;

2)       from one source;

3)       competition.

The buyer determines the method of state procurement in accordance with this procedure. Moreover, in the case of applying the tender method, the buyer has the right to independently decide how to make purchases: by the tender method in accordance with the special procedure or in accordance with Art. 13 of the Law on State Procurement.[23]

Changes were made to the procedure for determining the compliance of a potential supplier with the qualification requirement for financial stability.[24] In particular, Chapter 13 is supplemented by paragraph 445-1, according to which the qualification requirement of financial stability of a potential supplier does not apply to potential suppliers participating in state procurement in accordance with Article 51 of the Law on State Procurement (goods for people with disabilities and labor associations of public associations of special needs persons).

In addition, the following changes were made in April:

  • Payments under actually executed state procurement contracts must be made within 5 days;
  • The requirements for making the application security and execution of the state procurement contract for the “request for quotation by special order” and “competitive bidding using the special order (only for purchases if the allocated amount of the tender (lot) exceeds twenty thousand times the monthly calculation index set at the corresponding fiscal year by the law on the republican budget)”;
  • The requirements on the inclusion of potential suppliers in the register of unscrupulous participants, as well as the application of penalties against them related to current negative phenomena in the country's economy, are excluded;
  • A simplified special tender procedure for state procurement, which allows to skip the preliminary review of the draft tender documentation, preliminary acceptance and appeal within the framework of cameral control, due to which the procurement period is reduced from 45-60 days to 7 days.[25]

The revised list of Kazakhstan producers for state procurement by requesting price offers includes 2,678 subjects.[26]

The Rules for the Procurement of Goods, Work, and Services by National Managing Holdings, National Holdings, National Companies and Organizations fifty or more percent of voting shares (stakes in the authorized capital) of which directly or indirectly belong to the national managing holding, the national holding, and the national company, were amended.[27]

Now the buyer has the right to carry out procurement procedures related to the selection of a supplier of goods, works, and services according to the approved preliminary plan for the procurement of goods, works and services before approving the corresponding budget (production program and (or) investment program and (or) budget and (or) development plan and (or) business plan and (or) estimates of income and expenses).

In this case, the condition for concluding the contract is the approval of the corresponding budget (production program and (or) investment program and (or) budget and (or) development plan and (or) business plan and (or) estimate of income and expenses) and (or) an agreement to fulfill a government assignment and procurement plan (s) and amendments and (or) amendments to them for goods, work, services, in respect of which procurement procedures on the selection of a supplier have been carried out. 

Before concluding an agreement, the buyer has the right to refuse to make purchases in the following cases:

1)       Reduction of expenses for the acquisition of goods, works and services when specifying (adjusting) the corresponding budget;

2)       Changes and additions to the strategic plan, budget.

At the same time, amendments and additions to the procurement plans (preliminary annual procurement plan) aimed at acquiring such goods, works, services in the current year are not allowed. In case of cancellation of the purchase, the costs incurred by the potential supplier are not reimbursed.

21.    Limits on the Exchange Rate Differences 

Starting from 20 March 2020, until 1 July 2020, the limits on exchange rate differences were established as follows:

  • USD – 6 tenge;
  • EURO – 7 tenge.[28]

22.    Some Amendments Were Introduced to the Orders of the Ministry of Investment and Development[29]

According to the latest amendments, the working body of the Commission on Natural Resources is the Geology Committee of the Ministry of Ecology, Geology and Natural Resources (former Geology and Subsoil Use Committee of the Ministry of Investment).

In addition, the new forms of the following reports were adopted:

  • The technical project of the field;
  • Report on the extracted solid mineral resources;
  • Report on the extracted common mineral resources;
  • Report on the extracted precious metals and stones;
  • Geological report.

23.    Limits on Cash Withdrawals by the Companies

The National Bank imposed the following limits on cash withdrawals for the legal entities from their bank accounts during one calendar month effective until 31 December 2020:

1)       20 (twenty) million tenge for small businesses;

2)       120 (one hundred twenty) million tenge for medium businesses;

3)       150 (one hundred fifty) million tenge for large businesses.

Second level banks and KAZPOST are exempted from such limitations for their withdrawals from the correspondent bank accounts at the National Bank, as well as the companies operating in food products retail, pharmaceutics, medical and orthopedic equipment and supplies, agricultural purchases. 

24.    Tax Regulation

Starting from 1 April 1 2020, the Government introduced a 0% rate of the following taxes and social payments:

  •  Individual Income Tax withheld at the sauce;
  • Individual Income Tax paid by private practice professionals;
  • Social Tax, Obligatory Pension Contributions, Obligatory Professional Pension Contributions, Social Contributions, and Obligatory Medical Insurance except for the payments to be paid by the private entrepreneurs for themselves.[30]

This rate is applicable to the following employers and their employees:

-       Micro, small, and medium businesses, and private practice professionals for their obligations that became due from 1 April 2020 until 1 October 2020 (in the sphere of retail, transport, education, services etc.)

-       Large businesses for their obligations that became due from 1 April 2020 until 1 July 2020 (in the sphere of automobile retail, passenger avia transport, hospitality services, restaurants, real estate rent and management).

In addition, for the period from 1 April 2020 until 1 October 2020, 0% rate of the property tax will apply to:

-       Runways at the aerodromes and airports;

-       Any property of private practice professionals.

In addition, for the taxpayers, residents of the RoK, operating in the area of passenger avia transport, are allowed deferral of the VAT payment for the non-resident on technical maintenance and legal fees related to the leasing of the airplanes until 1 January 2021.

Starting from 1 March 2020, the deadlines for submitting of the tax reports on obligations for 2019 were moved from 31 March 2020 to 31 May 2020.[31] 

In addition, the Government Resolutions and Orders of the Minister of Finance introduces a number of changes to the tax regulation:

1)       According to the new edition of the Rules for the Return of Excessively Paid VAT[32], the excessively paid VAT from the budget can be returned through the web portal: www.egov.kz by the Taxpayer’s Offices. The return is made on the basis of the act and the conclusion of the thematic audit.

2)       The new version of the Rules for the Use of Cash Registers[33] provides a standard of public services on registration, change of registration data and deregistration of cash registers.

3)       Changes to the Regulation on the Appeal Commission for the Consideration of Contesting the Results of Inspections and (or) Notifications on Elimination of Violations[34] provide for the participation of representatives of “Atameken”, the National Chamber of Entrepreneurs of the Republic of Kazakhstan, in reviewing the complaints on tax and customs inspections. Such representatives are expected to have 1 vote when the Commission will make its resolution.



[1] Administrative Process Procedure Code No.350-VI dated 29 June 2020.

[2] Law on Administrative Procedure No. 107-II dated 27 November 2000.

[3] Law on Amendments to the Civil Procedure Code Designed to Introduce Modern Court Technologies and Reduce Unnecessary Court Procedures and Costs No. 342-VI dated 10 June 2020.

[4] Law on Amendments to Legislative Acts Related to Improving Enforcement Proceedings and Criminal Law No. 349-VI dated 26 June 2020.

[5] Clause 1 Article 9 of the Civil Code of the RK.

[6] Law on Consumer Rights Protection No. 274-IV dated 4 May 2010.

[7] Resolution of the National Bank No. 35 dated 19 March 2020 “On Amendments of the Resolution of the National Bank No.215 dated 31 August 2016 On Approval of the Rules on Regulation of the Payment Organizations”.

[8] Resolution of the Agency on Regulation of the Financial Market No.60 dated 25 May 2020 “On Amendments to Legal Acts Regulating Insurance Activity and the Securities Market”.

[9] Decree of the Minister of Industry and Infrastructural Development No. 237 dated 27 April 2020 “On Amendments of the Decree of the Minister on Investments and Development No.315 dated 11 May 2018 On Approval of the Rules of the Auction for Subsoil Plots for Operations on Exploration or Production of the Solid Minerals”.

[10] Law No. 352-VI dated 29 June 2020 “On Amendments to Some Legislative Acts of the Republic of Kazakhstan On Issues of Improving the Business Climate”.

[11] Decree of the acting Minister of Justice No.66 dated 29 May 2020 “On Approval of the Rules for Provision of the State Services in Registration of the Legal Entities, Branch and Representative Offices”.

[12] Decree of the Minister of Energy No.214 dated 29 May 2020 “On Approval of the Rules for Provision of the State Services of the Ministry of Energy of the Republic of Kazakhstan in Subsoil Use Sector”.

[13] Decree of the Minister of Industry and Infrastructure Development No.323 dated 30 May 2020 “On Approval of the Rules for Provision of the State Services in Subsoil Use Except for the Hydrocarbons and Uranium and “On Amendments to the Decree of the Minister of Investment and Development of the Republic of Kazakhstan No. 339 dated 17 May 2018 On Approval of the Rules for License Application for Artisanal Mining”.

[14] Decree of the Minister of Ecology, Geology, and Natural Resources No.130 dated 2 June 2020 “On Approval of the Rules for the Provision of the State Services in Environmental Protection”.

[15] Decree of the Minister of Industry and Infrastructure Development No.335 dated 8 June 2020 “On Approval of the Rules for Provision of the State Services on Issuing of the License for Operations in Mining and Chemical Industry”.

[16] Decree of the Minister of the National Economy No.47 dated 5 June 2020 “On Approval of the Rules for Provision of the State Services on Issuing of the License for Purchasing of the Electricity in Energy Conservation Purposes”.

[17] Decree of the Minister of Health No. ҚР ДСМ-59/2020 dated 1 June 2020 “On Approval of the Rules for Provision of the State Services on Issuing of the License for Medical Services”.

[18] Decree of the Minister of the National Economy No.44 dated 29 May 2020 “On Approval of the Rules for Provision of the State Services for Providing Information on the Category of the Business Entity”.

[19] Decree of the acting Minister of Justice No.58 dated 27 May 2020 “On Approval of the Rules for Provision of the State Services for Endorsement of the Apostille on the Official Documents Issued by the Justice and Other Authorities, and the Notaries of the Republic of Kazakhstan”.

[20] Decree of the Minister of Industry and Infrastructure Development No.354 dated 16 June 2020 “On Amendments to the Decree of the Investments and Development No.719 dated 13 October 2016 On Approval of the Rules for Licensing of the Export and Import of the Products Subject to the Customs Control”.

[21] Clause 4 Article 95 of the Labor Code.

[22] Clause 3 Article 56 of the Labor Code.

[23] Resolution of the Government No. 288 dated 13 May 2020.

[24] Decree of the First Deputy of the Prime-Minister of the RK, the Minister of Finance No. 1438 dated 27 December 2019 “On Amendments to the Decree of the Minister of Finance No.648 dated 11 December 2015 On Approval of the Regulations of the State Procurement”, Chapter 13.

[25] Resolution of the Government No. 191 dated 10 April 2020.

[26] Decree of the Minister of Industry and Infrastructure Development No. 201 dated 14 April 2020.  

[27] Decree of the First Deputy of the Prime-Minister, the Minister of Finance No.352 dated 4 April 2020.

[28]Resolution of the National Bank No. 33 dated 19 March 2020 “On Limits of the Exchange Rate Difference During Operations Conducted through the Foreign Currency Exchange Shops”.

[29] Decree of the Minister of Ecology, Geology and Natural Resources No.114 dated 21 May 2020 “On Amendments to Decrees of the Ministry of the Investment and Development of the Republic of Kazakhstan”.

[30] Decree of the President No.287 dated 16 March 2020 “On Further Measures to Stabilize the Economy Related to Taxation”.

[31] Resolution of the Government No. 224 dated 20 April 2020.

[32] Decree of the Acting Minister of Finance No.634 dated 26 June 2020 “On Amendments to the Decree of the Minister of Finance No. 391 dated 19 March 2018 On Approval of the Rules for the Return of Excessively Paid Value Added Tax”.

[33] Decree of the Minister of Finance No. 554 dated 1 June 2020 “On Amendments to the Decree of the Minister of Finance No. 208 dated 16 February 2018 On Use of the Cash Registers”.

[34] Decree of the Minister of Finance No. 551 dated 1 June 2020 “On Amendments to the Decree of the Minister of Finance No.23 dated 12 January 2018 On Approval of the Regulation on the Appeal Commission for the Consideration of Contesting the Results of Inspections and (or) Notifications on Elimination of Violations”.