Kazakhstan's Law on WTO Accession01 march 2016, 17:37
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 Law on WTO Accession.
LAW ON WTO ACCESSION
The Law on WTO Accession (Law of the Republic of Kazakhstan dated 27 October 2015 no.365-V “On Introduction of Amendments and Additions to Some Legislative Acts of the Republic of Kazakhstan in Connection with Accession to World Trade Organisation”) came into effect on 9 November 2015.
The main purpose of the Law on WTO Accession is to make national legislation compliant with international treaties executed by Kazakhstan in the frameworks of the World Trade Organisation (the “WTO”) in anticipation to official accession of Kazakhstan to WTO.
Amendments Related to Foreign Labor Force Attraction
The Law on WTO Accession introduces the definition of “internal corporate transfer” of foreign employees from legal entity established in the territory of one of WTO countries to subsidiaries, branches, representative offices of such legal entity established in Kazakhstan. Such transfer can be performed for the period of up to 3 years (with 1 year prolongation option) and foreign employees shall receive work permits from Kazakh authorised body. The foreign employees transferred under the internal corporate transfer are, however, exempt from the annual foreign labour force quote requirement established by Kazakh law (i.e. the number of such “transferred” employees to Kazakhstan is unlimited subject to compliance with Kazakh to foreign employees ratio established by Kazakhstan Government).
Amendments Related to Subsoil Users Obligations re Local Content
The Law on WTO Accession abolished mandatory requirement of local goods for the subsoil users who executed their subsoil use contracts after 1 January 2015. These subsoil users will not be obliged to use local goods and materials and will not be obliged to buy goods from local producers. The obligation to use local services and works (the minimal threshold is 50%), however, did not change and subsoil users still have to keep such obligation.
Under the Law on WTO Accession, the definition of Kazakhstan provider of works and services has been amended and now includes individual entrepreneurs and/or legal entities established under Kazakh law, located in Kazakhstan and using not less than 95% of Kazakh employees excluding managers and specialists transferred to Kazakhstan as a part of “internal corporate transfer” described above. The total number of such “transferred” managers and specialist shall not exceed 25% and 50% from 1 January 2022 out of total number of managers and specialists by each respective category.
The obligation of subsoil user to use Kazakh employees in conduction of subsoil operations has also been amended by the Law on WTO Accession. Now subsoil user is entitled to use managers and specialists transferred to Kazakhstan as a part of “internal corporate transfer” provided that the ratio of Kazakh employees will be kept at 50% of the total employees by each respective category.
Strengthening the Liability for Breaches of Trademark Rights
Currently the person who illegally used a trademark or mark similar to the trademark to the extent of confusion, shall destroy the goods or package of goods where such trademark/ mark similar to trademark is placed. Previously, the obligation to destroy the relevant goods arose only if it was impossible to delete the trademark/ mark similar to trademark from the goods/package.
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