Milestones of Draft Law of the Republic of Kazakhstan “On permits and notices”.

In accordance with requirement of Clause 25 of National wide activity plan for realizing message of Head of State to people of Kazakhstan of 14 December 2012 “Strategy “Kazakhstan - 2050”: new political course of successful country” approved by Decree No. 449 of the President of the Republic of Kazakhstan of 18 December 2012 Ministry of Regional Development of the Republic of Kazakhstan elaborated Draft Law of the Republic of Kazakhstan “On permits and notices”.         

As it mentioned in Explanatory Note to Draft Law of the Republic of Kazakhstan “On permits and notices” development of the given Draft Law was preceded by insight review of international expertise forstatutory regulation of regulatory approval system in various countries of the world. Relevant laws in European Union, Ukraine, Russian Federation, Georgia, Uzbekistan were thoroughly studied.             

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As a result of studying best international practices the most advanced progressive approaches for regulating approval procedures have been incorporated in the Draft Law:

- making list of all approval documents comprehensive;

- fixing common standardized approaches in implementing all approval procedures;

-enhance application of such principles as “one contact" principle” and “silence implies consent”.

To provide public with opportunity to read through the given Draft Law and if required to offer their proposals and notes with respect to the given Draft Law Ministry of Regional Development of the Republic of Kazakhstan published Draft Law of the Republic of Kazakhstan “On permits and notices” at the official site of the Ministry www.minregion.gov.kz. As it follows from reference of Minister of Regional Development B. Zhamishev there were no proposals and notes on the public part regarding the given Draft Law in the mentioned Internet resource.   

Exhausting list of all permits and notices has been formed in the Draft Law taken into consideration. As of today the given list includes 733 permits and 35 notices.   

As it was repeatedly mentioned in the news the given Draft Law consists of 3 main sections:

- first section includes the current Law of the Republic of Kazakhstan “On licensing” as amended (all existing problems in licensing area have been revised);

- Provision on notices extracted from the Law of the Republic of Kazakhstan “On administrative procedures” was include in the second section;

- third section of the Draft Law has been entirely written again and regulates issues of approval procedures not being licenses.

Article 22 of the Draft Law provides for required instruments enabling to select degree of drastic nature for a particular permit depending on hazardous level of thecontrolled facility thus:

1) first category approvals are licenses to be introduced with regard to types (sub-types) of activities or acts (operations) related to high level of hazard;

2) second category approvals are all approvals which are not licenses  to be introduced with regard to types (sub-types) of activities or acts (operations) related to medium level of hazard;

3) with respect to types (sub-types) of activities or acts (operations) related to low level of hazard though requiring acquisition of information by state authorities concerning beginning and liquidating such types of activities or acts (operations) notices are introduced.

The Draft Law also provides for classification of approvals depending of controllable facilities as follows:

1) Class 1 – “permits issued for carrying out activities”;

2) Class 2 - “permits issued for facilities”;

3) Class 3 – “one-time permissions”;

4) Class 4 – “permits issued for carrying out activities with limited resources or using quotas”;

5) Class 5 – “permits issued for carrying out professional activities by physical persons”;

6) Class 6 – “permits issued for products”.

Few important milestones may be highlighted in the first section of the Draft Law (in the part concerning licensing):

- areas of activity subject to mandatory licensing are indicated in the Article 28 of the Draft Law. This Article differs from the currently applied list by the fact that one more area of activity “oil and gas” is included. Having studied the given Draft Law one could say that additional type of activity is created on the basis of dividing existing sub-types of activities in industrial area;

- as the Article 29 of the Draft Law says licenses may be granted to not only physical persons and legal entities registered in the territory of the Republic of Kazakhstan but also branches and representation offices of a foreign legal entity. At present with regard to the given issue there is a disagreement in state authorities whether branches and representation offices of a foreign legal entity may obtain a license (according to RK legislation branches are not legal entities). Changes mentioned in the given Article will significantly facilitate foreign companies to carry out their activity in the territory of the Republic of Kazakhstan resulting in additional investment flow into business development in the territory of the Republic of Kazakhstan;

- the Draft Law also specifies special conditions for licensing certain activity types such as: 1) entitling to carry out activity in financial area related to concentrating financial resources, 2) entitling to carry out activity in gambling business area, 3) for carrying out activity of arranging construction of residential buildings through attracting funds of shared construction participants, 4) entitling to carry out activity in the area of architecture, town building and construction, 5) in the area of using nuclear energy these conditions are applied to types of instruments, units, materials, substances and waste.

For convenience of physical persons and legal entities explicit list of types / sub-types of activities subject to obligatory licensing is indicated in the Appendix No. 1 to the given Draft Law.   

Upon bringing the given Draft Law into legal force the Law of the Republic of Kazakhstan No. 214 “On licensing” of 11 January 2007 will be declared to be no longer in force:

In the second section of the Draft Law (approval procedures) procedures for issuing second category permits are specified. The given section describes the whole process (procedure) for obtaining second category permits: due periods, payment settlement, refuse in issuing, termination of second category permits (list of second category permits is indicated in the Appendix No. 2 to the Draft Law).

Also detailed procedure is provided for notifying state authorities on commencing / terminating certain types of activities exhaustive list of which is indicated in the Appendix No. 3 to the Draft Law.     

Having studied the Draft Law in question one could say that major issues related to permits and notices are covered in this document. At bringing this Draft Law into legal effect (physical persons and legal entities) will simplify challenge for entrepreneurs to specify their activity type according to a particular category of approvals. Procedure for obtaining all permits is described in details and this will narrow search for normative and legal documents related to authorization system         

The Appendixes enclosed to the Draft Law contain exhaustive list of all licenses, permits and notices indicating their specific nature (regarding license alienability; applicability of tender procedures at permit issuance; permit effective period; exception from falling within the scope of the third part of Clause 3 Article 25 and Article 26 of the Draft Law at issuing permits; as well as other required information).     

According to prognoses for potential economic, social, legal and ecological effects upon introducing this Draft Law approvals which have not been presented by the state authorities at developing the given Draft Law or otherwise have not been included in final list will be deemed illegitimate and will be cancelled upon bringing a common law in force.      

Unfortunately the Draft Law doesn’t specify whether currently applied qualification requirements for obtaining licenses / permits are to be changed. Probably the requirements will be left unchanged and also it’s probably that authorized agencies will change / add a new requirement on the basis of coming this Draft Law into effect; only further practice will show how the legislation of the Republic of Kazakhstan would change due to accepting the Law “On permits and notices” and coming into legal force hereof.