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

I. Legislative News

Environment

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

Subsoil Use

• The Ministry 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 from 14 July 2022.

Gas and Gas Supply

• The Government has approved the Comprehensive Gas Supply Plan for 2022 – 2026. The comprehensive plan focuses on analysing the problems and barriers restraining the development of the natural gas industry and, of course, offers a 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, CIT, VAT, land tax, excess profits tax.
• The Competition Authority has introduced a temporary state price regulation for retail sales of liquefied petroleum gas at gas stations. The maximum prices are set separately for each city and region and are valid until 1 January 2023.

Investment

• The Government has approved the Concept of Investment Policy in Kazakhstan by 2026. In general, the document discloses main issues in development of investment activity in Kazakhstan and analysis of current investment policy. Please consider Section 7 of the Concept, which includes an action plan, necessary for further development of 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 on improving the business climate in the country. In particular, it is worth noting the possibility of introducing preferences in the field of currency regulation for investors in the framework of investment agreements (Article 295-2 of the Entrepreneurial Code). For example, it is proposed to allow investors to fulfill the requirements of repatriation of national/foreign currency by crediting to their foreign bank accounts. It is noteworthy that other simplified conditions can also be included in the investment agreement, but only after agreement with the National Bank. On 11 August 2022, public discussions on the draft law were completed and the further status of the document has not yet been clarified.

Procurement

• The Ministry of Finance has introduced a number of changes/supplements to the Procurement Rules for Quasi-Public Sector Entities. In particular, now the procedure for procurement through the electronic shop is regulated in detail. It should be recalled that purchases through e-shop are made only in respect of homogeneous goods, works and services (GWS). Homogeneity should be understood as GWS that, though not identical, but have similar characteristics and perform the same functions.

Improvement of the Civil Legislation

• The Senate of the Parliament has adopted the Law amending/supplementing, in particular, the Civil Code (the General and Special Part), the Law "On Securities Market", the Law "On Joint Stock Companies" on various issues concerning regulation of the securities market, means of enforcement of obligations and activities of JSC (see the digest for May 2022 for details on the amendments). The Law shall come into effect on 12 September 2022, except for certain provisions.

II. Clarifications from the State Authorities

1. Response of the Minister of Justice dated 14.07.2022 – "On the need for notarization with Kazakhstan notary of the agreement on the sale and purchase of a share in the LLP already executed and notarized in Russia".
2. Response of the Minister of Labour and Social Protection of Population dated 20.07.2022 – "On the legality of the employer's actions in refusing to hire previously dismissed employees".
3. Response of the Minister of Labour and Social Welfare dated 22.07.2022 – "On the withholding by the employer of material assistance provided to an employee for recuperation after dismissal of an employee at his own will".
4. Response of the Minister of Justice dated 27.07.2022 – "On the possibility of registration of the foreigner's ownership of commercial real estate in Kazakhstan".

III. Case Law News

• On 20 July 2022 the Supreme Court published another issue of Bulletin No. 6/2022 containing, inter alia, extracts from certain rulings of the Judicial Board for Administrative and Civil Cases of the Supreme Court of the Republic of Kazakhstan.

IV. Legal Publications

Zakon.kz/Analytics

• Zhanna Seidalina, Judge of Karaganda Regional Court, PhD in Law – "Issues of introducing extraterritorial jurisdiction".
• Almagul Ermekova, Judge of the Saryarka district court of Nur-Sultan city – "Disputes about the right of ownership of residential premises".

Sud.gov.kz/Press Centre

• Umraliev Yerbol, Judge of the Supreme Court – "Blacklist of state procurements. In each case we need to check whether there was or was not intent of the supplier".

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Kazakhstan Law News Digest for July 2022 (Russian)

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