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Changes in Kazakhstani Law on Corruption Countermeasures

15 february 2016, 17:26
0

GRATA Finance & Securities Group has released a legal alert covering important legal developments in the Kazakhstani legislation that occurred in 2015.

Most of the changes were introduced in the legislation pursuant to adoption in May 2015 of a new policy document – the Plan of the Nation: 100 Steps for Implementation of 5 Institutional Reforms – governing the development of Kazakhstan in the short-term perspective.

The legal review covers the following areas:

1. Law on Corruption Countermeasures
2. New Civil Procedure Code
3. Law on Astana International Financial Center
4. Law on Judicial System
5. Law on Supreme Judicial Council
6. Resolution on Application of Bankruptcy and Rehabilitation Legislation by the Courts
7. New Commercial Code
8. PPP Law
9. Law on WTO Accession
10. Law on Special Defensive, Antidumping and Compensational Measures
11. Law on Ownership Right Further Protection
12. Law on Amendments to Electric Power Industry
13. Law on Amendments Related to Non-performing Loans,  Financial Services and Financial Organisations
14. Law on Agricultural Cooperatives
15. Privatisation Decree
16. Rules of Electronic Trades
17. New Procurement Law

Each of them is addressed in a separate release on our website, whereas the today’s release deals with the changes in the Law on Corruption Countermeasures.   

LAW ON CORRUPTION AND COUNTERMEASURES

The new Law on Corruption Countermeasures (Law of the Republic of Kazakhstan no. 410-V dated 18 November 2015 “On Corruption Countermeasures”) has been enacted from 1 January 2016 and replaced the previous law of the Republic of Kazakhstan “On Combating Corruption” no. 267-I dated 2 July 1998.

The new Law on Corruption Countermeasures is aimed on improvement and strengthening of anti-corruption measures and further development of measures preventing the corruption.

The main amendments contained in the new Law on Corruption Countermeasures are listed below.

Anticorruption Monitoring and Analysis of Corruption Risks

The new Law on Corruption Countermeasures introduced the new corruption countermeasures, such as “anticorruption monitoring” and “analysis of corruption risks”. Anticorruption monitoring shall be conducted by the authorised body (the National Bureau for Counteractions to Corruption of the Ministry for Public Service Issues of the Republic of Kazakhstan) and other subjects of corruption countermeasures – state bodies, quasi-state sector subjects, non-governmental organisations and legal entities and individuals (the “Subjects”). Anticorruption monitoring is conducted by the Subjects for the purposes of assessment of the practice of law application, conducting anticorruption analysis and improvement of measures aimed on development of anticorruption culture. Analysis of corruption risks can be external and internal. External analysis of corruption risks is executed by the authorised body by analysis of legislation and checking the activity of state bodies and organisations, subjects of quasi-state sector. Internal anticorruption analysis is conducted by the Subjects (except individuals) themselves.

Anticorruption Culture

The new Law on Corruption Countermeasures is now also aimed on the formation of anticorruption culture that is a countermeasure to corruption in addition to the measures mentioned above. Formation of anticorruption culture is performed by the authorised body and other Subjects and includes mainly educational, information, organisational and other measures.

Anticorruption Standards

Anticorruption Standards are recommendations established by the authorised body in order to prevent corruption.

In our view the measures listed above are of declarative and recommendation nature and there is no clear mechanism how the state will ensure all of these measures are indeed taken in practice. Unlike the above, the below amendments seem to be more efficient in terms of corruption limitation.

Measures of Financial Control

Under the current legislation, candidates to the state officials and their spouses shall provide to the tax body declaration on taxable income and property (including income and property located abroad) (the “Income and Property Declaration”) and certain other information (on bank deposits, securities, shareholdings in companies etc.) State officials and their spouses shall provide the Income and Property Declaration annually and state officials dismissed for negative reasons and their spouses shall provide the Income and Property Declaration within 3 years from the moment of their dismissal. Non-provision of the mentioned information may incur administrative and criminal liability.

From 1 January 2017, state officials (and not candidates) and their spouses shall provide the Income and Property Declaration.

In addition, the following persons shall provide assets and liabilities declaration (the “Assets and Liabilities Declaration”): candidates to the President, members to the Parliament and local representative bodies (maslikhats), heads of the local executive bodies (akims) and their spouses.

Information on provision/non-provision by the relevant persons of the Income and Property Declaration and the Assets and Liabilities Declaration shall be placed on the website of the tax body. Non-provision of the mentioned information may incur administrative and criminal liability.

From 1 January 2020, certain information contained in the Declarations mentioned above shall be published on the websites of the relevant state bodies if such Declarations have been provided by the following state officials and their spouses:

-          Political state officials;

-          Administrative state officials of “A” corpus;

-          Members of the Parliament;

-          Judges;

-          Managing officials of quasi-state sector companies.

Conflict of Interests

The new Law on Corruption Countermeasures introduced the definition of the “conflict of interests” for the state officials. Certain state officials are now expressly prohibited to perform their functions if they reveal the conflict between their personal interests and their job functions that may lead to undue performance by the state officials of their relevant functions. In this case, relevant state officials shall inform his management on the conflict of interests and the management shall take appropriate measures to address the conflict of interests issue, such as suspending the relevant person from performance of the functions that constitute the conflict of interests, amending his functions accordingly etc.

National Report on Corruption Countermeasures

The new Law on Corruption Countermeasures introduced the obligation of the authorised body to provide the President with the annual national report on corruption countermeasures. Such report shall be based on results of work of the authorised body and activity of state bodies, individuals and legal entities on the corruption issues.

 

Comments and recommendations can be sent to schikanayev@gratanet.com. We will make sure we fix any problems and continue to offer you the best service we can.

Shaimerden Chikanayev, Partner

Email: schikanayev@gratanet.com 

Mob: 7701 7878020

Marina Kahiani, Partner

Email: mkahiani@gratanet.com 

Mob: 7701 7251269

This Legal Alert is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons. This Legal Alert should not be acted upon in any specific situation without appropriate legal advice and it may include links to websites other than the GRATA website. If you no longer wish to receive legal alerts from the GRATA Finance & Securities Group, please send an email to schikanayev@gratanet.com


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