Our Kazakhstan M&A team discusses the June highlights on key legal developments for energy, competition and subsoil use areas.
I. Legislative News
- The Government of Kazakhstan has determined the conditions and procedure for designating a state-owned enterprise as JSC and LLP as the subject of a special right. It is worth a reminder that the term "special right" as a new regime of monopoly position was captured in the legislation quite recently and means an exclusive or preferential right of a market entity to produce, sell and/or purchase any goods on a competitive market.
- The Competition Authority has approved the Rules for providing market entities with equal access to the key capacity of a dominant or monopolist entity on a specific commodity market. Please note that the notion of "key capacity" appeared in the legislation in January this year and means the goods, work and services of a dominant or monopolist entity without access to which other market participants cannot produce and/or or sell goods on the market.
Subsoil Use / Petrochemicals
- The Ministry of Industry and Infrastructure Development has approved new wording for license forms for the following types of subsoil use operations:
- Geological study of subsoil
- Exploration of solid minerals
- Extraction of solid minerals
- Extraction of commonly occurring minerals
- Subsoil space use
- The National Security Committee, jointly with a number of ministries, has introduced a six-month ban (starting from July 12, 2022) on the export from the territory of the Republic of Kazakhstan (except for the export in gas tanks provided by manufacturers of motor vehicles and in individual containers of not more than 20 liters), of gasoline, diesel fuel and certain petrochemicals, except for machine oils by motor vehicles.
Gas and Gas Supply
- The Ministry of Energy has approved the maximum price for liquefied petroleum gas marketable on the domestic market of the Republic of Kazakhstan outside the commodity exchange. The maximum price will be set at KZT 33,600 per ton (excluding VAT) for the period from July 1, 2022 to June 30, 2023.
Public Private Partnership (PPP)
- The Ministry of National Economy has established the limits of state obligations for PPP and concession projects. Such monetary limits have been approved for each region for the period from 2022 to 2024.
- The Government has introduced a new term, "a single investment projects pool," in the regulation of investment activities. It is a list of investment projects (formed by the Committee on Investments of the Ministry of Foreign Affairs) in non-primary sectors of the economy at a value of more than KZT 500,000,000, initiated by national and foreign investors. In addition, it established a structural unit Task Force on the basis of National Company KAZAKH INVEST JSC, which will be mainly responsible for (a) forming and maintaining a single investment projects pool and (b) providing services to investors that have a one-stop principle and implement projects with an investment volume of 7,500,000 MCI or more in all sectors of the economy.
- The Ministry of Agriculture has approved new wording for the Rules for the organization and conduct of tenders for the sale of state land or land lease rights on the web portal of the public property registry https://e-qazyna.kz/.
The Ministry of Energy has approved new wording for the maximum tariffs for electric power sold by power generating organizations up to and including the year 2025. Such maximum tariffs are established for groups of power generating organizations.
The Senate of the Parliament has approved the adoption of a law aimed at improving legislation on electricity, energy conservation, subsoil use, local governments and the state border (see the digest for May 2022 for more details). This will come into effect on August 31, 2022.
- The Senate of the Parliament is considering a draft law amending a number of legislative acts on development of digitalization and innovation in business processes and in the work of public authorities. This draft law contains a significant number of innovations and, among other things, proposes the following:
Law on State Registration of Legal Entities and Record Registration of Branches and Representative Offices
It is proposed to complete: (a) state registration of legal entities (including if a legal entity is created as a result of reorganization); (b) accounting registration of a branch (representative office) of a legal entity; (c) state re-registration of a legal entity; and (d) state registration of termination of a legal entity electronically based on an electronic application submitted through the “e-government” web portal.
Law on Post
Article 18-1. It is proposed to implement new postal services, such as electronic and hybrid mail services. The aim is the electronic transmission of messages, information, letters and documents between authenticated service users with confirmation of sending and delivery of such transmission and ensuring secure storage of received messages, information, letters and documents. User authentication will be carried out through an electronic digital signature.
Law on Permissions and Notifications
Article 7. It is proposed to allow (a) verification of the applicant’s compliance with qualification or permit requirements and (b) the automatic issue of a permit in the state information system. This implies a regime in which the consideration of the application and the issue of the permit is carried out without the involvement of the responsible person of the licensing authority.
The Majilis of the Parliament is considering a law on ratification of the agreement between the Governments of the Republic of Kazakhstan and the United Arab Emirates on promotion and mutual investment protection, signed in Abu Dhabi on March 24, 2018.
II. Clarifications from the State Authorities
- Response of the Minister of Labor and Social Protection of Population dated June 15, 2022: "If the employer has several grounds for termination of the employment agreement, choosing the ground shall be the prerogative right of the employer."
- Response of the Minister of Energy dated June 24, 2022: "Wholesale of liquefied petroleum gas by the owner of the gas-filling station to another owner of the gas-filling station shall be not allowed."
III. Scientific Publications
Zakon.kz / Analytics
- Suleimenov M.K., Professor, Member of the National Academy of Sciences of the Republic of Kazakhstan, Amendments to the Constitution: advantages and disadvantages
- Klimkin S.I., PhD in Law, Chief Researcher of the Institute of Legislation and Legal Information of the Republic of Kazakhstan, The analysis of certain provisions of the Law of the Republic of Kazakhstan No. 2255 "On Commercial Partnerships" dated 2 May 1995
- Nesterova Y. V., PhD in Law, Chief Researcher of the Institute of Legislation and Legal Information of the Republic of Kazakhstan, The problem of arbitration agreement in disputes involving consumers
- Shakirova A.A., Judge of the Specialized Inter-District Administrative Court of Karaganda Region, Disputes in public services
- Zhadauova Z., Chief Researcher of the Department of Legislation Effectiveness Analysis of the Institute of Legislation and Legal Information of the Republic of Kazakhstan, On the analysis of stability (instability) of the Law of the Republic of Kazakhstan No. 379-V ЗРК "On Public-Private Partnership" dated 31 October 2015
- Akhmetova A.Y., Vice-Minister of Justice of the Republic of Kazakhstan, On improvement of copyright legislation
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