Our M&A team in Kazakhstan discusses July highlights on key legal developments in the areas of energy, competition and land use.

I. Legislative news

Environment

  • The Ministry of Ecology, Geology and Natural Resources has approved the National Emission Quota Plan for 2022 – 2025. The National Plan determines the total amount of emission quotas distributed free of charge between the subjects of the regulated fields of activity, as well as the reserve amount allowances sold to subjects under the terms of the auction. By the way, regulated areas of activity include: electric power, oil and gas, mining, metallurgical and chemical activity, as well as the production of cement, lime, gypsum and bricks.

Basement use

  • The Department of Energy has established a maximum price on retail sales of Ai-80, Ai-92, and Ai-93 gasoline and summer and off-season diesel fuel for 180 calendar days beginning July 14. July 2022.

Gas and gas supply

  • The government has approved the comprehensive gas supply plan for 2022 – 2026. The comprehensive plan focuses on the analysis of problems and obstacles that hinder the development of the natural gas industry and, of course, proposes a certain number of solutions and initiatives. In particular, it is worth mentioning the list of preferences considered by the Ministry of Finance and the Ministry of National Economy for gas projects in Kazakhstan: exemption from property tax, corporate tax, VAT , property tax, excess profits tax.
  • The Competition Authority has introduced temporary state price regulation for retail sales of liquefied petroleum gas at service stations. Maximum prices are set separately for each city and region and are valid until January 1, 2023.

Investment

  • The government has approved the concept of investment policy in Kazakhstan by 2026. In general, the document describes the main issues of development of investment activity in Kazakhstan and analyzes the current investment policy. Please consider section 7 of the Concept, which includes an action plan, necessary to further develop the investment climate in Kazakhstan.
  • The Ministry of National Economy has prepared a draft law providing for a number of amendments to various legislative acts aimed at improving the business climate in the country. In particular, it is worth noting the possibility of introducing preferences in terms of monetary regulation for investors within the framework of investment agreements (article 295-2 of the company code). For example, it is proposed to allow investors to meet domestic/foreign currency repatriation requirements by crediting their foreign bank accounts. It should be noted that other simplified conditions may also be included in the investment agreement, but only after agreement with the National Bank. On August 11, 2022, public discussions on the bill concluded and the further status of the document has yet to be clarified.

Supply

  • The Ministry of Finance has introduced a number of amendments/additions to the procurement rules for quasi-public sector entities. In particular, the procurement procedure through the electronic store is regulated in detail. It should be remembered that purchases through the online store are made only for homogeneous goods, works and services (GWS). Homogeneity should be understood as GWS which, although not identical, have similar characteristics and perform the same functions.

Improvement of civil legislation

  • The Senate of the Parliament adopted the law modifying/supplementing in particular the Civil Code (the general part and the special part), the law “on the securities market”, the law “on joint-stock companies” on various questions concerning the securities market regulation, means of performance of obligations and activities of JSC (see the May 2022 summary for details of the changes). The law will enter into force on September 12, 2022, with the exception of certain provisions.

II. Clarifications from state authorities

  1. Response of the Minister of Justice dated 07.14.2022 – “On the need for notarization with the notary of Kazakhstan of the agreement on the sale and purchase of a share of the LLP already signed and notarized in Russia”.
  2. Response of the Minister of Labor and Social Protection of the Population of 20.07.2022 – “On the legality of the employer’s actions in refusing to hire previously dismissed employees”.
  3. Response from the Minister of Labor and Social Welfare dated 22.07.2022 – “On the withholding by the employer of the material aid provided to an employee for recovery after the dismissal of an employee of his own free will”.
  4. Response of the Minister of Justice dated 07.27.2022 – “On the possibility of registration of foreign ownership of commercial real estate in Kazakhstan”.

III. Case law news

  • On July 20, 2022, the Supreme Court published another issue of Bulletin No. 6/2022 containing, among other things, excerpts from certain decisions of the Judicial Council for Administrative and Civil Cases of the Supreme Court of the Republic of Kazakhstan.

IV. Legal Publications

Zakon.kz/Analytics

  • Zhanna Seidalina, judge of the Karaganda Regional Court, Doctor of Laws – “Introductory questions of extraterritorial jurisdiction”.
  • Almagul Ermekova, judge of the Saryarka district court of the city of Nur-Sultan – “Disputes concerning the right to ownership of residential premises”.

sud.gov.kz/Press Center

  • Umraliev Yerbol, Supreme Court Justice – “Blacklisting of public procurement. In each case, we have to check whether or not there was the intention of the supplier.”

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Kazakhstan Law News Digest July 2022 (Russian)

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