Kazakhstan Law News Digest for May 2022

I. Legislative Information

Competitors 

• The Competitors Authority has permitted the Methodology for the Evaluation of the Aggressive Scenario on Commodity Markets. Such methodology is critical, amongst different issues, to (1) decide the extent of competitors in particular commodity markets, (2) determine dominants/monopolists within the commodity market and (3) set up the appropriateness of the state presence within the enterprise sphere. 

Pure Monopoly 

• The Ministry of Nationwide Economic system of the Republic of Kazakhstan has launched numerous amendments and additions to the Guidelines of Actions of Pure Monopoly Entities. Specifically, the amendments concern the process of consideration of appeals in opposition to choices and actions of the Committee for Regulation of Pure Monopolies when rendering varied public companies resembling offering consent for reorganization or liquidation of a topic of pure monopolies, inclusion/exclusion from the register of topics of pure monopolies. The enchantment course of is now extra detailed and a compulsory pre-trial process is envisaged.

Subsoil Use 

• The Ministry of Power of the Republic of Kazakhstan has established the utmost costs for wholesale marketable gasoline within the home market of Kazakhstan for the interval from July 1, 2022 to June 30, 2023. Such costs are mounted individually for every area for gross sales (1) on the home market and (2) to customers buying marketable gasoline for additional manufacturing of liquefied pure gasoline. 
• The Ministry of Power of the Republic of Kazakhstan has permitted the Guidelines and process for engagement of impartial specialists throughout the state experience of the essential mission paperwork of the subsoil consumer on hydrocarbons. Specifically, these guidelines outline (1) the qualification necessities for the impartial knowledgeable, (2) the levels and process for the choice. 
• The Ministry of Trade and Infrastructure Growth of the Republic of Kazakhstan has modified the Guidelines for buy of products, works and companies (GWS) by subsoil customers and their contractors for manufacturing of strong minerals. Now clients should enter into “offset agreements” with suppliers when buying imported merchandise, if the annual quantity allotted by the shopper to buy GWS exceeds 500,000 MCI. The peculiarity of such settlement is further funding obligations of the provider, specifically investments of not lower than 5% of worth of the settlement within the financial system of the Republic of Kazakhstan, amongst different issues, by means of the institution of manufacturing and investments in analysis and improvement works. 
• The Ministry of Trade and Infrastructural Growth of the Republic of Kazakhstan has launched amendments to the Guidelines for buy of GWS by subsoil customers and their contractors for hydrocarbons/uranium manufacturing. The amendments relate to the association of tender documentation, tender software and open tender. Specifically, the open tender will now include 9 levels (beforehand 8 levels): a process for the comparability of tender paperwork was added for the aim of figuring out the authenticity. The record of instances through which the procurement of GWS from one supply is allowed has additionally been considerably expanded. It will come into impact on July 31, 2022. 
• The Ministry of Power of the Republic of Kazakhstan has permitted the time period for the evaluation of subsoil customers’ reviews when monitoring the fulfilment of their obligations below the subsoil use contract. This time period will probably be 30 enterprise days. Based mostly on the outcomes of the evaluation, in case of fulfilment of economic obligations by lower than 30% within the reporting 12 months, by April 1 following the reporting interval, the subsoil consumer will probably be notified of the violation and elimination of those violations. It will come into impact on August 2, 2022. 

Funding

• The Ministry of International Affairs of the Republic of Kazakhstan has established the time period of validity of the applying for an investor visa for non-residents finishing up funding actions within the Republic of Kazakhstan. Now, relying on the kind of funding exercise of a non-resident software, a visa shall be issued for five years or 3 years. Such an software expressed in written request of Committee on Investments of the Ministry of International Affairs to migration authorities is a authorized floor for an investor to acquire an investor visa from migration authorities.

Public Procurement 

• The Authorities of the Republic of Kazakhstan has established an exemption from nationwide remedy with regard to computing machines and their items for public procurement. Now state authorities might buy such merchandise solely from home producers. 

Public Companies 

• The Ministry of Digital Growth, Innovation and Aerospace Trade of the Republic of Kazakhstan has permitted the register of public companies in a brand new wording. 

Worldwide Paperwork

• The Parliament of the Republic of Kazakhstan has ratified the Settlement between the Authorities of the Republic of Kazakhstan and the Authorities of the Republic of Armenia on commerce and financial cooperation for the provision of oil merchandise to the Republic of Armenia, aside from oil, electrical energy, pure gasoline and coal. 

Land Relations

• The Majilis of the Parliament of the Republic of Kazakhstan is contemplating a draft legislation geared toward amending the Code on Administrative Offences on safety and use of land issues. Specifically, it has proposed to seize the accountability of native govt authorities for the failure to carry, or premature holding of, tenders for offering land plots for development. Adoption of this modification will promote compliance with the Land Code (paragraph 6-1 of Article 43) by native govt authorities, as native govt authorities usually don’t adjust to the necessities to offer land plots for tender, or present them with vital delays.

Electrical Energy/Hydrocarbon Classification 

• The Senate of the Parliament of the Republic of Kazakhstan is contemplating a draft legislation geared toward enhancing the laws on electrical energy and subsoil use. Thus, this legislation would amend, amongst different issues, the Subsoil and Subsoil Use Code and the Regulation on Electrical Energy.

Subsoil and Subsoil Use Code 

• Article 12. It’s proposed to incorporate “shale oil” and “shale gasoline” within the classification of hydrocarbons. Thus, crude oil contained in shale rocks is acknowledged as shale oil. Shale oil and shale gasoline will probably be referred to unconventional varieties of hydrocarbons.

Regulation on Electrical Energy 

• Article 15-9. As a part of modernization, reconstruction or growth, current energy producing organizations will have the ability to construct producing vegetation utilizing gasoline in its place kind of gasoline. To be able to implement such mission, it’s potential to conclude an funding settlement with the Ministry of Power of the Republic of Kazakhstan. 

Civil laws 

• The Senate of the Parliament of the Republic of Kazakhstan is contemplating a draft legislation geared toward enhancing the laws on (1) capital market, (2) joint inventory firms, (3) insurance coverage market and (4) banking. This draft legislation accommodates a major variety of improvements and, amongst different issues, proposes the next: 

Civil Code of the Republic of Kazakhstan. Normal Half

• Article 136. Bonds. It’s proposed to alter the definition of bonds: Thus, a bond is a safety certifying, in accordance with the phrases of concern, the suitable to obtain remuneration on it and the par worth of the bond in cash or different equal property from the issuer of the bond (i.e., now bonds may have no predetermined maturity). 
• Article 292. Safety Deposit. It’s proposed to introduce a brand new kind of safety for the efficiency of an obligation—a safety deposit (an quantity to be transferred upfront). The sort of fee secures not each obligation, however exactly a financial obligation, and will probably be set off in opposition to the efficiency, in case of breach of obligation. If there isn’t a breach, the quantity is returned to the debtor. 

Civil Code of the Republic of Kazakhstan. Particular Half

• New Article 500-1. Repo Transactions. It’s proposed to introduce a brand new subtype of a sale and buy settlement—repurchase agreements (Repo). The settlement gives for two levels: 
  • Opening Repo – a Repo Vendor undertakes, inside the time period set forth within the settlement, to switch securities and (or) different monetary devices to a Repo Purchaser, and a Repo Purchaser undertakes to just accept them and pay a sure sum of money;
  • Closing Repo – a Repo Purchaser undertakes, inside the interval prescribed by the settlement, to switch again comparable securities of the identical concern and (or) different monetary devices to the possession of a Repo Vendor, and a Repo Vendor undertakes to just accept them and pay a sure sum of money.

Regulation on Securities Market 

• Article 1. It’s proposed to seize the definition of the next varieties of bonds:
  • social bonds are bonds the place the proceeds will probably be utilized to finance initiatives geared toward fixing social points and/or reaching optimistic social outcomes;
  • inexperienced bonds are bonds the place the proceeds will probably be utilized to finance inexperienced initiatives;
  • sustainability bonds are bonds the place the proceeds will probably be utilized to finance a mixture of inexperienced and social initiatives.
• New Article 12-2. Peculiarities of issuance of non-government perpetual bonds. It’s proposed to seize the potential of issuing bonds and not using a particular maturity. Such bonds have situations and restrictions on issuance. For instance, (1) they could be positioned solely amongst certified traders, (2) they aren’t topic to conversion into shares, (3) there are limitations on the problem quantity, (4) it’s not possible to redeem such bonds. 

Regulation on Joint Inventory Corporations

• New Article 30-2. Cut up of shares in an organization. Cut up of shares is a rise within the variety of excellent shares by means of a proportional break up of every share by decision of the final assembly of shareholders. Cut up of shares doesn’t end result within the change of the scale of the constitution capital or require a further concern. The splitting of shares requires the introduction of corresponding amendments to the report on the outcomes of the location of shares. 
• Clause 4 of Article 25-1. It’s proposed to alter the process of figuring out the worth of a share when bought by a minority shareholder on the request of a majority shareholder, in case the shares are traded on a inventory alternate. Now this value is decided on the premise of the market worth of shares, which is decided on the premise of inventory alternate buying and selling outcomes as of the date of demand for buyout. Now it’s proposed to find out this market worth as weighted common value of shares on the organized inventory market during the last six months previous to the date of transaction.

II. Clarifications from the State Authorities

1. Response of the Minister of Ecology, Geology and Pure Assets of the Republic of Kazakhstan dated Might 6, 2022 – “On the definition of a class of the item having unfavorable influence on the setting”.
2. Response of the Minister of Power of the Republic of Kazakhstan dated June 1, 2022 to the query of Might 17, 2022 – “On the situations specified within the tender paperwork when finishing up operations on exploration or manufacturing of hydrocarbons and manufacturing of uranium”.
3. Response of the Chairman of the State Income Committee of the Ministry of Finance of the Republic of Kazakhstan dated June 3, 2022 to the query dated Might 26, 2022 – “On exemption from taxation below CIT when paying dividends of the Firm to the non-resident founder”.

III. Scientific Publications

Zakon.kz/Analytics

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