Blog of our mind

13 November 2015 saw the adoption of the Republic of Kazakhstan Law to Amend Certain Legislative Acts of the Republic of Kazakhstan on Rehabilitation and Bankruptcy (hereinafter referred to as the Law). Specifically, the Rehabilitation and Bankruptcy Law received a new chapter, 6-1, Settlement, which enables the debtor and creditors to make a settlement agreement at any stage of bankruptcy proceedings in order to discontinue bankruptcy proceedings. The effective date of the amendments is 2 December 2015.

In its practice, Linkage & Mind has not infrequently come across applications of FIDIC templates in major construction projects in various industries. FIDIC templates were normally used where the contractor was a foreign company and/or the project was financed by international financial institutions[1]. In this context, the Kazakhstan party quite often tried to change the structure and contents of the contract in an attempt to harmonize it as much as possible with the Kazakhstan law and practices. In the end, the contract contained a great number of amendments and exceptions to the General Terms and Conditions

The Law of the Republic of Kazakhstan “On combating legalization (laundering) of Illegally Gained Income and Financing of Terrorism” (hereinafter – the Law) was amended by virtue of the Law of the Republic of Kazakhstan № 343-V of 08.02.2015. In particular, the amendments were made into the threshold amount of transactions in money and (or) other assets, subject to financial monitoring.

As a general rule, investors and Kazakhstani entrepreneurs prescribe an arbitration clause in contracts with foreign counterparties and, subsequently submit disputes to international arbitration courts in other states (herein below “international arbitration courts”), and  Kazakhstani residents also sometimes submit their disputes to international arbitration courts.

However, a judicial practice shows that residents encounter difficulties in recognition of validity of arbitration clauses (arbitration agreements), because the competent courts opine that residents’ disputes cannot be submitted to international arbitration courts, e.g. LCIA, ICC, etc., referring to provision of point 4, article 6 Law on Foreign Arbitration

Pursuant to Law of the Republic of Kazakhstan No.333-V of 17 July, 2015 “On amendments and additions into the certain legal acts of the Republic of Kazakhstan pertaining increase of protection of property right, securing performance of contractual obligations and strengthening of liability for violation of them” the Civil Code, Law on registration of mortgage of immovable property and Law on Banks and Banking Activity have been amended.

VAT deregistration of taxpayers (legal entities) in which CEO or sole participant are foreign individuals

Sub –clause 8, clause 4, article 571, the Tax Code of the Republic of Kazakhstan (the “Tax Code”), came into force on 1 July 2015.