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On procurement by certain quasi-public sector entities

Law of the Republic of Kazakhstan No. 47-VII dated June 8, 2021.

      Unofficial translation

Article 1. Scope of application of this Law

      1. This Law regulates the relations connected with the acquisition of goods, works and services necessary for the functioning as well as the performance of the statutory activities of national management holdings, national holdings, national companies and organisations, fifty percent or more of the voting shares (participation shares in the authorised capital) of which are directly or indirectly owned by the national management holdings, national holding companies, national companies, as well as social entrepreneurial corporations, except for legal entities, fifty percent or more of the voting shares (participation shares in the authorised capital) of which are directly or indirectly owned by the national managing holding company, national holding company, national companies, transferred for trust management to individuals or non-governmental legal entities with the right to subsequent redemption (hereinafter, “certain quasi-public sector entities”).

      2. This Law shall not apply to cases:

      1) the purchase of services from natural persons under employment contracts or from natural persons who are not business entities under contracts for paid services, including the services of private notaries, lawyers and bailiffs;

      2) contributing membership fees (contributions), including to the share capital of legal entities;

      3) acquisition of blocks of shares, participatory interests in the charter capital (hereinafter referred to as “participatory interests”) of legal entities;

      4) remuneration to members of the management body and the supervisory board, compensation or payment of expenses (travel and accommodation, subsistence allowance) related to the performance of the duties of members of the management body and the supervisory board;

      5) acquisition of goods, works and services carried out in compliance with international treaties of the Republic of Kazakhstan, as well as within the framework of investment projects financed by international organisations of which the Republic of Kazakhstan is a member;

      6) acquisition of financial services related to banking operations conducted by the National Bank of the Republic of Kazakhstan, banks and organisations conducting certain types of banking operations under licenses obtained in obedience to the legislation of the Republic of Kazakhstan, and services of other participants in the securities market, broker and/or dealer services, custodial services, acquisition of services for connection, maintenance and use of the financial automated information transport system, services of the international interbank information transmission and payment system, including those related to receipt of bank statements and information services provided by the stock exchange operating on the territory of the Republic of Kazakhstan, services of second-tier banks of the Republic of Kazakhstan and/or international (foreign) banks, legal advisers, financial advisers, external audit and/or appraisal organisations for the issue of comfort letters, investor trustee, payment transfer agents, registrars, procedural, arbitration and other services necessary for the customer's organisation of borrowing, including the issue and repurchase of securities, debt management and investment (treasury) portfolio, services provided by information and analytical systems of leading international financial information providers, as well as the purchase of the above services in securitisation transactions as originator and (or) lender under the Law of the Republic of Kazakhstan “On Project Financing and Securitisation”;

      7) payment of fees and charges levied at the seaport;

      8) hospitality, travel expenses and the purchase of services related to travel expenses;

      9) acquisition by the national holding company of the services of an international insurance company specialising in export credit insurance;

      10) purchase of a unified securities registrar and securities transaction services;

      11) the purchase of financial instruments, including securities, in treasury operations involving the placement of temporarily available funds;

      12) acquisition of attorney (agent) services within the framework of legal relations for the provision of a state guarantee, return of funds from the national budget diverted in the case of performance of obligations under the state guarantee, in compliance with the budgetary legislation of the Republic of Kazakhstan;

      13) acquisition by the national company in the agricultural sector of agricultural products and processed products, as well as services for their storage, processing, transportation, carried out in obedience to the legislation of the Republic of Kazakhstan;

      14) acquisition of socially important foodstuffs into regional food commodity stabilisation funds carried out in compliance with the legislation of the Republic of Kazakhstan.

Article 2. Basic concepts used in this Law

      The following basic concepts shall be used in this Law:

      1) pre-qualification is the process of assessing potential suppliers against the qualification requirements set out in the procurement rules;

      2) inaccurate information - false information contained in the application of a potential supplier or supplier for participation in procurement methods of tender, auction, single source and request for quotation, as well as made by corrections that distort the actual content of the documents and do not correspond to the submitted application of the potential supplier or supplier;

      3) a potential supplier - a natural person engaged in entrepreneurial activities, a legal entity (except for public institutions, unless otherwise provided for by the laws of the Republic of Kazakhstan), a consortium applying for the conclusion of a procurement contract;

      4) types of similar goods - not interchangeable similar goods;

      5) homogeneous goods, works, services - goods, works, services which, although not identical, have similar characteristics and consist of similar components, enabling them to perform the same functions;

      6) works - activities having a tangible result, as well as other activities classified as work in obedience to the laws of the Republic of Kazakhstan;

      7) conciliation commission - a permanent collegial body that considers appeals of potential suppliers who have evaded the conclusion of a contract and are included in the register of unfair procurement participants or the list of unreliable potential suppliers (vendors) of the Fund. The composition, working and decision-making procedure of the conciliation commission shall be determined by the procurement rules. The conciliation commission shall necessarily include representatives of the National Chamber of Entrepreneurs of the Republic of Kazakhstan, branch associations (unions) accredited in the National Chamber of Entrepreneurs of the Republic of Kazakhstan;

      8) services - activities aimed at satisfying the needs of the customer, with no tangible result;

      9) organisations of the Fund - legal entities, fifty percent or more of the voting shares (participatory interests) of which are directly or indirectly owned by the Fund on the right of ownership or trust management. Indirect ownership means ownership of fifty percent or more of the voting shares (participatory interests) of another legal entity by each successive legal entity on the right of ownership or trust management;

      10) an off-take contract - a contract concluded between a customer and a supplier for the supply of goods that the supplier plans to produce and ensure their delivery in the future, under pre-agreed terms of value, quantity (volume) and delivery dates;

      11) procurement - the purchase of goods, works and services by customers on a fee basis in obedience to the procedure prescribed by this Law and the procurement rules;

      12) procurement web portal: an information system for electronic procurement in compliance with this Law and the procurement rules;

      13) procurement participant - customer, organiser of procurement, potential supplier, supplier and operator of the electronic procurement information system;

      14) a centralised procurement control service - a service of a national management holding company, a national holding company, a national company other than a national company in which the national management holding company or national holding company is a shareholder, and a service of a socio-entrepreneurial corporation;

      15) procurement rules - depending on the scope of the regulated relationship:

      for certain quasi-public sector entities other than the Fund and the Fund's organisations - a legal act determining the procedure for procurement by certain quasi-public sector entities other than the Fund and the Fund's organisations, approved by the authorised procurement body;

      for the Fund and the Fund's organisations - the procurement procedure for the Fund and the Fund's organisations, approved by decision of the Board of Directors of the Fund in agreement with the procurement authority (hereinafter - the procurement procedure for the Fund);

      16) procurement organiser: an official or organisational unit of the customer or a legal entity designated as responsible for the implementation of the organisation and conduct of procurement procedures;

      17) procurement expert commission: a collegial body established by the organiser of the procurement or the customer with the involvement of experts to participate in developing the terms of reference and (or) the technical specification of the goods, works and services to be procured and (or) preparing an expert opinion on the compliance of potential suppliers' offers with the technical specification of the goods, works and services to be procured;

      18) procurement expert: a natural person with special and/or relevant technical knowledge, experience and qualification in the field of procurement, confirmed by relevant documents (diplomas, certificates, certificates and other documents), engaged by the organiser of the procurement or the customer to participate in the development of the terms of reference and (or) the technical specification of the goods, works and services to be procured and (or) the preparation of an expert opinion on the compliance of potential suppliers' offers with the technical specification of the goods, works and services to be procured;

      19) procurement authority - the central executive body responsible for the management as well as inter-sectoral coordination of procurement of certain quasi-public sector entities;

      20) procurement contract (hereinafter referred to as “contract”) - a civil law contract concluded in obedience to this Law, the civil legislation of the Republic of Kazakhstan and the procurement rules;

      21) customers - certain quasi-public sector entities;

      22) goods - items (things), including semi-finished or raw materials in solid, liquid or gaseous state, electric and thermal energy, objects of intellectual property rights, as well as proprietary rights, with which purchase and sale transactions can be made in accordance with the laws of the Republic of Kazakhstan;

      23) Tender Commission (Auction Commission) – a collegial body established by the organiser of the procurement or the customer to carry out the procurement procedure by means of a tender (auction);

      24) National Welfare Fund (hereinafter referred to as the Fund) is a national management holding company;

      25) e-shop: an information system integrated with a web-based procurement portal, providing procurement as determined in the procurement rules;

      26) e-procurement information system operator - depending on the scope of the relationship:

      for certain quasi-public sector entities, other than the Fund and the Fund's organisations, the legal person(s) designated by the authorised procurement body, the powers of which are determined in the procurement rules;

      for the Fund and the Fund's organisations - a legal person determined by the Fund, the powers of which are defined in the Fund's procurement procedures.

Article 3. Legislation of the Republic of Kazakhstan on procurement by quasi-public sector entities

      1. Legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities is based on the Constitution of the Republic of Kazakhstan and consists of the provisions of the Civil Code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. The rules of the international treaty shall apply if an international treaty ratified by the Republic of Kazakhstan establishes rules other than those stipulated in this Law.

      Article 4: Principles of Procurement

      Procurement shall be based on the principles of:

      1) optimal and efficient use of the money used for procurement;

      2) openness and transparency of the procurement process, while respecting suppliers' rights and/or legitimate interests in commercial confidentiality (before the tender results are finalised);

      3) fair competition among potential suppliers, avoiding collusion between bidders;

      4) responsibilities of procurement participants;

      5) preventing corrupt practices;

      6) providing support to domestic producers of goods as well as domestic suppliers of works and services to the extent that this does not contradict international treaties ratified by the Republic of Kazakhstan;

      7) acquisition of innovative and high-tech goods, works and services;

      8) providing potential suppliers with an equal opportunity to participate in the procurement procedure, except as provided for in this Law;

      9) respect for the intellectual property rights contained in the goods procured.

Article 5. Procurement process

      1. The procurement process shall include:

      1) developing and approving a procurement plan (preliminary, annual, long-term ones);

      2) selecting and contracting a supplier;

      3) contract execution.

      2. The procurement process may also include procedures for the management of procurement categories and inventory management in accordance with procurement rules.

      3. Procurements shall be made via the web-based procurement portal, except as provided for in Article 18 of this Law.

Article 6. Procurement planning

      1. Procurement planning shall be based on relevant business plans and/or budgets and/or development plans and/or repair plans and/or production programmes and/or investment programmes and/or contracts for the fulfilment of the public task.

      2. Procurement plan (preliminary, annual, long-term one) shall be published on the procurement web portal.

      3. The customer, organiser of procurement shall divide heterogeneous goods, works and services into lots pursuant to their homogeneity, homogeneous goods - by types of homogeneous goods and by places of delivery, homogeneous works, services - by place of their performance, provision, except for cases provided for in the procurement rules.

      Paragraph 4 of Article 6 shall be effective since 01.01.2023.

      4. Price planning for a list of identical goods shall be carried out within the price tolerance determined by:

      1) for certain quasi-public sector entities, other than the Fund and the Fund's organisations, in obedience to the procurement rules;

      2) for the Fund and the Organisations of the Fund - in the manner determined by the Fund.

      The list of identical goods for certain quasi-public sector entities other than the Fund and the Fund's organisations shall be determined by the authorised procurement body.

      The list of identical goods for the Fund and the Fund's organisations shall be determined by the Fund.

      5. The procedure and deadlines for developing, approving and amending the procurement plan shall be set out in the procurement rules.

Article 7. Restrictions on participation in procurement

      1. A potential supplier may not participate in an ongoing procurement if:

      1) the potential supplier or its subcontractor (co-contractor) or consortium member is on the register of unfair participants in public procurement and/or on the list of unfair potential suppliers (vendors) of the Fund and/or on the list of debtors in respect of whom a court decision on declaring them bankrupt has entered into legal force;

      2) the potential supplier and (or) subcontractor (co-contractor) engaged by it, and (or) their manager, and (or) founders (shareholders) are included in the list of organisations and persons connected with financing of terrorism and extremism, or in the list of organisations and persons connected with financing of proliferation of weapons of mass destruction, in the manner established by the Law of the Republic of Kazakhstan “On Counteracting Money Laundering and Financing of Terrorism”;

      3) the potential supplier is a legal entity the place of incorporation of which is a state or territory included in the list of states with preferential tax treatment approved by the authorised state body responsible for ensuring the collection of taxes and other compulsory payments to the budget.

      2. No contract shall be awarded to potential suppliers referred to in paragraph 1 hereof.

Article 8. Qualification requirements for a potential supplier

      1. The qualification requirements for a potential supplier shall be determined in compliance with the procurement rules.

      2. The potential supplier shall submit the relevant documents required by the procurement rules to demonstrate its qualifications.

      3. The potential supplier - non-resident of the Republic of Kazakhstan in confirmation of its compliance with the qualification requirements established by the procurement rules shall submit the same documents as residents of the Republic of Kazakhstan, or documents confirming similar information on the qualifications of the potential supplier - non-resident of the Republic of Kazakhstan.

      Article 9: Consequences for a potential supplier or vendor providing inaccurate information

      1. Potential suppliers or suppliers who have provided inaccurate information during the procurement process shall be included in the register of unfair procurement participants, the list of unreliable potential suppliers (vendors) of the Fund as determined in the procurement rules.

      2. The credibility of the information provided by a potential supplier or vendor may be ascertained by the customer, the organiser of the procurement, the centralised procurement control service, the authorised procurement body or the state audit and financial control authorities at any stage of the procurement process.

      3. The Centralised Procurement Monitoring Service, the authorised procurement body or the state audit and financial control authorities, which have established that the potential supplier or supplier has provided inaccurate information, shall notify in writing of this fact no later than five working days from the day on which such fact is established:

      1) the customer, if such a fact is established after summing up the results of the procurement;

      2) the customer, the organiser of the procurement, if such a fact is established before summing up the results of the procurement.

      The written notification must be accompanied by copies of the documents proving this fact.

Article 10. Register of unfair procurement participants

      1. The register of unfair participants in procurement shall be formed in the electronic procurement information system.

      2. The register of unfair procurement participants shall be a list of:

      1) potential suppliers identified as winners but who have avoided the contract;

      2) potential suppliers or suppliers who have provided inaccurate information on the qualification requirements and/or documents affecting the tender offer;

      3) suppliers who have failed to fulfill or improperly fulfilled their contractual obligations.

      In the case referred to in sub-paragraph 1) of part one of this paragraph, the customer shall send information on such potential supplier to the centralised procurement control service within ten working days from the date on which the potential supplier refuses to conclude the contract.

      In the case referred to in sub-paragraph 2) of part one of this paragraph, the customer, the organiser of the procurement shall file a claim with a court to have such potential supplier or supplier declared an unfair participant in the procurement no later than thirty calendar days from the day when they became aware of the violation.

      In the case referred to in sub-paragraph 3) of part one of this paragraph, the customer shall be obliged to take legal action to declare such supplier an unfair participant in the procurement not later than thirty calendar days from the day when it/he/she became aware of the supplier's breach of contract, unless the supplier pays a forfeit (fine, penalty) and fully performs its contractual obligations.

      3. The conciliation commission shall consider the application of the potential supplier and take a decision on early removal or refusal of early removal of the potential supplier from the register of unfair participants in procurement.

      4. The register of unfair participants in procurement shall be formed based on:

      a decision by the centralised procurement control office in the case provided for in sub-paragraph 1) of part one of paragraph 2 hereof;

      a legally enforceable court judgement in the cases provided for in sub-paragraphs 2) and 3) of part one of paragraph 2 hereof.

      5. Potential suppliers included in the register of unfair participants in procurement on the ground provided for by sub-paragraph 1) of part one of paragraph 2 hereof shall be prohibited to participate in procurement for twenty-four months from the date of the decision to declare them unfair participants in procurement.

      Potential suppliers or suppliers included in the register of unfair participants in procurement on the grounds provided for in sub-paragraphs 2) and 3) of part one of paragraph 2 hereof shall be prohibited to participate in procurement for twenty-four months from the date of entry into legal force of the court decision declaring such potential suppliers or suppliers to be unfair participants in procurement.

      Grounds for removal from the register of unfair procurers shall be:

      1) the expiry of the period set out in parts one and two of this paragraph;

      2) a valid judicial decision overturning a decision declaring a prospective supplier or supplier to be an unfair procurer;

      3) the conciliation commission's decision to remove a potential supplier from the register of unfair suppliers.

      6. A decision to include a potential supplier or supplier on the register of unfair participants in a procurement may be appealed against in obedience to the legislation of the Republic of Kazakhstan.

Article 11. Modalities of procurement

      1. Procurement shall be carried out in the following ways:

      1) tender;

      2) auction;

      3) budget enquiry;

      4) from a single source;

      5) through commodity exchanges;

      6) through e-shop;

      7) through intra-holding cooperation.

      2. The procedure for procurement by the means provided for in paragraph 1 hereof shall be governed by the procurement rules.

      3. Procurement by the means provided for in sub-paragraphs 1) and 3) of paragraph 1 hereof may be carried out with a pre-qualification process in compliance with the procurement rules.

      4. Procurements in the manner provided for in sub-paragraph 2) of paragraph 1 hereof shall not apply when the Fund and the organisations of the Fund carry out procurements.

      5. The method of procurement provided for in sub-paragraph 5) of paragraph 1 hereof shall apply to the list of exchange goods approved by the authorised body in the field of trade regulation.

      6. The method of procurement provided for in sub-paragraph 7) of paragraph 1 hereof shall apply only to the procurement of the Fund and the organisations of the Fund.

      7. The method of procurement shall be determined by the purchaser in obedience to this Law, the procurement rules.

      8. The following shall be prohibited in procurement:

      1) when the tender documents (auction documents) establish qualification requirements for potential suppliers that are not provided for in the procurement rules, or when the tender documents (auction documents) or the information to be posted, when carrying out procurement by request for quotations, specify the characteristics determine whether the goods, works or services to be purchased belong to certain potential suppliers, except for cases:

      procurement of goods, works and services for the completion, retrofitting, unification or compatibility with existing goods, works and services, as well as for further technical support, maintenance and repair, including scheduled repairs (if necessary), of the main (installed) equipment;

      unless otherwise stipulated in the procurement strategy developed and approved in compliance with the Fund's procurement procedures;

      the purchase of goods, works and services to fulfil the customer's obligations under the contract concluded by it as a supplier with a non-resident of the Republic of Kazakhstan, and the existence in this contract of appropriate references to trademarks, service marks, trade names, patents, utility models, industrial designs, name of place of origin of goods and name of manufacturer, as well as other information and (or) documents that determine whether the goods, works, services purchased belong to a particular potential supplier or not;

      2) refusal to carry out procurement in cases not covered by the procurement rules;

      3) a potential supplier and/or subcontractors for work or co-contractors for services are found to be non-compliant with the qualification requirements and/or requirements of the tender documents (auction documents) on grounds not provided for in the procurement rules;

      4) non-division of heterogeneous goods, works and services into lots based on homogeneity, homogeneous goods - by type of homogeneous goods and by place of delivery, homogeneous works, services - by place of performance, except for cases stipulated by the procurement rules;

      5) preparation of a knowingly false expert opinion by a procurement commission or a procurement expert, on the basis of which an unlawful decision was taken by the tender commission (auction commission);

      6) single-source procurement in cases not covered by the procurement rules;

      7) requiring a potential supplier to submit documents that are not required by the tender documents.

Article 12. Conclusion and execution of the contract

      1. The contract shall be concluded and executed in obedience to this Law, the civil legislation of the Republic of Kazakhstan and the procurement rules.

      2. Liability for non-performance or improper performance of contractual obligations must be provided for the parties to the contract on a parity basis.

      The contract shall contain provisions for full payment for the supply of goods, works or services within a period not exceeding thirty working days from the date of performance of the obligations under the contract.

      3. The draft contract or the concluded contract may be amended by mutual agreement of the parties in cases provided for in the procurement rules.

      4. No amendments may be made to the draft contract or the concluded contract that may change the content of the conditions of the ongoing (conducted) procurement.

      5. Offtake contracts shall be concluded by certain quasi-public sector entities, other than the Fund and the Fund's organisations, in the manner determined by the competent authority in the field of procurement.

      Offtake contracts shall be entered into by the Fund and the Fund's organisations in compliance with the procedure determined by the Fund.

      No unilateral changes to an existing off-take contract shall be made to reduce the scope of the procurement and the price of the contract.

Article 13. Competence of an authorized body for procurement

      An authorised procurement body shall:

      1) determine web portals for procurement by certain quasi-public sector entities other than the Fund and the Fund's organisations;

      2) approve the rules for the operation of the web portals for the procurement of certain quasi-public sector entities other than the Fund and the Fund's organisations, including in case of technical failures in the operation of the web portals;

      3) request the necessary information and materials from the parties to the procurement in accordance with the procurement rules;

      4) engage experts from state bodies and other organisations to carry out expert examinations and consultations;

      5) develop and approve procurement guidelines for certain quasi-public sector entities other than the Fund and the Fund's organisations, including in coordination with the authorised bodies of the relevant sectors;

      6) approve the rules for the establishment and maintenance of procurement registers of certain quasi-public sector entities, other than the Fund and the Fund's organisations;

      7) draw up and approve the rules of control exercised by the centralised procurement control service, with the exception of the centralised procurement control service of the Fund;

      8) institute and consider cases of administrative offences in procurement by certain quasi-public sector entities and impose administrative penalties in compliance with the procedure established by the Code of Administrative Offences of the Republic of Kazakhstan;

      9) approve the procedure for the conclusion and execution of an oftake contract for certain quasi-public sector entities other than the Fund and the Fund's organisations;

      10) approve the manner in which the Fund and the organisations of the Fund enter into and execute an oftake contract;

      11) exercise other powers stipulated by this Law, other laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Article 14. Competence of certain quasi-public sector entities in procurement

      1. The Fund shall supervise and provide methodological guidance, monitoring and analysis on the procurement of the Fund and the Fund's organisations.

      2. The Fund shall perform the following functions:

      1) determine the web portal for procurement of the Fund and the Fund's organisations;

      2) approve the rules for the operation of the web-portal for procurement of the Fund and the Fund's organisations, including in the event of technical failures on the web portal;

      3) approve the rules for the formation and maintenance of registers, lists in the area of procurement of the Fund and the Fund's organisations;

      4) approve the manner in which the Fund and the Fund's organisations enter into and execute an ophthalmic contract;

      5) determine the structural unit of the Fund acting as the centralised procurement control service for the Fund and the organisations of the Fund;

      6) exercise other powers as set out in this Law, other laws of the Republic of Kazakhstan, the charter of the Fund and the Fund's procurement procedures.

      3. The Board of Directors of the Fund shall:

      1) approve the Fund's procurement procedures;

      2) approve the rules for monitoring the implementation of the Fund's procurement.

      4. The first head, deputy head or other head of the contracting authority or the organiser of the procurement shall be appointed as chairman of the procurement commission.

Article 15. Control over compliance with the legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities

      1. Control over the compliance of certain quasi-public sector entities with the requirements of this Law and the procurement rules shall be carried out by the centralised procurement control service and the authorised procurement authority.

      2. The centralised procurement control service of certain quasi-public sector entities, other than the Fund and the Fund's organisations, shall be accountable to the board of directors of the quasi-public sector entity, which shall determine the quantitative composition, term of office and operating procedures of the centralised procurement control service, appoint and terminate the powers of its head and determine the amount and other conditions of remuneration of its employees.

      The Central Procurement Control Service of the Fund and the Fund's organisations shall report directly to the Board of Management of the Fund. The control procedure shall be set out in the Fund's procurement control rules.

      3. The objects subjected to control shall be:

      1) a purchaser, an organiser of procurement, a tender commission (auction commission), an expert procurement commission, a procurement expert;

      2) a potential supplier, supplier, and persons engaged by them as subcontractors for the performance of works or co-contractors for the provision of services, within the scope of the subject matter of the procurement being made;

      3) e-procurement information system operator.

      4. The grounds for monitoring compliance with procurement rules shall be:

      1) a written application or an application received via publicly available information systems and complying with the requirements of the legislation of the Republic of Kazakhstan on electronic document and electronic digital signature, of a potential supplier or a supplier taking part in a tender or auction, or its authorised representative with a complaint against actions (inaction), decisions of the customer, organiser of procurement or tender commission (auction commission), procurement expert, operator of electronic procurement information system;

      2) law enforcement orders received;

      3) inspection plan for the centralised procurement control service.

      5. Upon detection of any breaches of the procurement rules as a result of the monitoring, the Centralised Procurement Monitoring Service shall send to the subject of the monitoring:

      1) a binding remedial notification no later than three working days from the date of the discovery of the infringement;

      2) a binding act of the planned inspection containing recommendations for the elimination of detected irregularities and their causes.

      6. If, based on the results of control, the fact of an act (omission) containing elements of a criminal offence committed by the object of control is revealed, the centralized procurement control service shall forward information on the commission of the said act (omission) and documents confirming such fact to law enforcement agencies within five working days from the day of revealing such fact.

      7. If the centralised procurement control service issues a remedial notification, the object of control shall remedy the breaches specified in the notification within ten working days of the day following the date of delivery (receipt) of the notification.

      8. In the event of failure to comply with the notification to rectify irregularities detected as a result of the control within the period specified in paragraph 7 hereof, the centralised procurement control service shall transfer the materials to the authorised procurement body.

Article 16. Appeal against actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), procurement expert, expert commission on procurement, operator of information system for electronic procurement, decision of centralized service on procurement control

      1. A potential supplier, supplier shall be entitled to appeal against actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), expert on procurement, expert commission on procurement, operator of information system of electronic procurement if their actions (inaction), decisions violate rights and (or) legitimate interests of the potential supplier, supplier.

      2. A potential supplier shall be entitled to appeal against the actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), procurement expert, expert commission on procurement, operator of information system of electronic procurement, if their actions (inaction), decisions violate the rights and (or) legitimate interests of the potential supplier before the date of opening of applications, price offers.

      3. A potential supplier, who participated in the procurement, may appeal against the actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), expert on procurement, expert commission on procurement, operator of information system of electronic procurement within two working days from the date of publication of the protocol on the results of procurement, if their actions (inaction), decisions violate the rights and (or) legitimate interests of the potential supplier, who participated in the procurement.

      4. In response to a potential supplier not agreeing with the results of the tender, the tender committee shall submit a reasoned decision.

      5. In the cases provided for in paragraphs 2 and 3 hereof, the conclusion of the contract shall be suspended until the expiry of the time limit for the examination of the complaint.

      6. Upon expiration of time limits set by paragraphs 2 and 3 hereof, an appeal against actions (inaction), decisions of customer, organizer of procurement, tender commission (auction commission), expert on procurement, expert commission on procurement, operator of information system of electronic procurement to the centralized service on procurement control shall be made in obedience to the laws of the Republic of Kazakhstan.

      7. A complaint by a potential supplier, vendor may be submitted via the web portal for procurement in obedience to the legislation of the Republic of Kazakhstan on electronic document and electronic digital signature.

      8. Based on the results of the review of the complaint received within the time limits set out in paragraphs 2 and 3 hereof, the centralised procurement control unit shall decide whether to cancel and/or revise, or refuse to cancel and/or revise, the procurement results.

      A decision to reject the cancellation and/or review of the procurement results, containing the conclusions that no cancellation and/or review of the procurement results is necessary, with justification, shall be communicated to the applicant within three calendar days of the date of such decision.

      9. In the event of disagreement with the decision of the centralised procurement control unit made pursuant to paragraph 8 hereof, the potential supplier shall be entitled to appeal to a court of law.

Article 17. Liability for violation of the legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities

      Violation of the requirements of the legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities shall entail liability established by the laws of the Republic of Kazakhstan.

Article 18. Special procurement procedures

      1. Procurements with application of a special procedure shall be carried out in cases of purchase of goods, works, services, information on which constitutes state secrets and (or) contains official information of limited distribution, determined by the Government of the Republic of Kazakhstan, as well as within the framework of the state defence order in compliance with the legislation of the Republic of Kazakhstan on defence industry and the state defence order and in cases provided for by the rules of procurement.

      2. The special procedure shall be determined by the procurement rules.

      3. Special procedure procurement shall be carried out without the use of a web-based procurement portal.

Article 19. Enactment procedure of this Law

      This Law shall come into force on 1 January 2022, except for paragraph 4 of Article 6, which shall come into force on 1 January 2023.

      President of the Republic of Kazakhstan K. TOKAYEV

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Laws - On procurement by certain quasi-public sector entities (changes for 08 июня 2021) Z2100000047

Law of the Republic of Kazakhstan No. 47-VII dated June 8, 2021.

      Unofficial translation

Article 1. Scope of application of this Law

      1. This Law regulates the relations connected with the acquisition of goods, works and services necessary for the functioning as well as the performance of the statutory activities of national management holdings, national holdings, national companies and organisations, fifty percent or more of the voting shares (participation shares in the authorised capital) of which are directly or indirectly owned by the national management holdings, national holding companies, national companies, as well as social entrepreneurial corporations, except for legal entities, fifty percent or more of the voting shares (participation shares in the authorised capital) of which are directly or indirectly owned by the national managing holding company, national holding company, national companies, transferred for trust management to individuals or non-governmental legal entities with the right to subsequent redemption (hereinafter, “certain quasi-public sector entities”).

      2. This Law shall not apply to cases:

      1) the purchase of services from natural persons under employment contracts or from natural persons who are not business entities under contracts for paid services, including the services of private notaries, lawyers and bailiffs;

      2) contributing membership fees (contributions), including to the share capital of legal entities;

      3) acquisition of blocks of shares, participatory interests in the charter capital (hereinafter referred to as “participatory interests”) of legal entities;

      4) remuneration to members of the management body and the supervisory board, compensation or payment of expenses (travel and accommodation, subsistence allowance) related to the performance of the duties of members of the management body and the supervisory board;

      5) acquisition of goods, works and services carried out in compliance with international treaties of the Republic of Kazakhstan, as well as within the framework of investment projects financed by international organisations of which the Republic of Kazakhstan is a member;

      6) acquisition of financial services related to banking operations conducted by the National Bank of the Republic of Kazakhstan, banks and organisations conducting certain types of banking operations under licenses obtained in obedience to the legislation of the Republic of Kazakhstan, and services of other participants in the securities market, broker and/or dealer services, custodial services, acquisition of services for connection, maintenance and use of the financial automated information transport system, services of the international interbank information transmission and payment system, including those related to receipt of bank statements and information services provided by the stock exchange operating on the territory of the Republic of Kazakhstan, services of second-tier banks of the Republic of Kazakhstan and/or international (foreign) banks, legal advisers, financial advisers, external audit and/or appraisal organisations for the issue of comfort letters, investor trustee, payment transfer agents, registrars, procedural, arbitration and other services necessary for the customer's organisation of borrowing, including the issue and repurchase of securities, debt management and investment (treasury) portfolio, services provided by information and analytical systems of leading international financial information providers, as well as the purchase of the above services in securitisation transactions as originator and (or) lender under the Law of the Republic of Kazakhstan “On Project Financing and Securitisation”;

      7) payment of fees and charges levied at the seaport;

      8) hospitality, travel expenses and the purchase of services related to travel expenses;

      9) acquisition by the national holding company of the services of an international insurance company specialising in export credit insurance;

      10) purchase of a unified securities registrar and securities transaction services;

      11) the purchase of financial instruments, including securities, in treasury operations involving the placement of temporarily available funds;

      12) acquisition of attorney (agent) services within the framework of legal relations for the provision of a state guarantee, return of funds from the national budget diverted in the case of performance of obligations under the state guarantee, in compliance with the budgetary legislation of the Republic of Kazakhstan;

      13) acquisition by the national company in the agricultural sector of agricultural products and processed products, as well as services for their storage, processing, transportation, carried out in obedience to the legislation of the Republic of Kazakhstan;

      14) acquisition of socially important foodstuffs into regional food commodity stabilisation funds carried out in compliance with the legislation of the Republic of Kazakhstan.

Article 2. Basic concepts used in this Law

      The following basic concepts shall be used in this Law:

      1) pre-qualification is the process of assessing potential suppliers against the qualification requirements set out in the procurement rules;

      2) inaccurate information - false information contained in the application of a potential supplier or supplier for participation in procurement methods of tender, auction, single source and request for quotation, as well as made by corrections that distort the actual content of the documents and do not correspond to the submitted application of the potential supplier or supplier;

      3) a potential supplier - a natural person engaged in entrepreneurial activities, a legal entity (except for public institutions, unless otherwise provided for by the laws of the Republic of Kazakhstan), a consortium applying for the conclusion of a procurement contract;

      4) types of similar goods - not interchangeable similar goods;

      5) homogeneous goods, works, services - goods, works, services which, although not identical, have similar characteristics and consist of similar components, enabling them to perform the same functions;

      6) works - activities having a tangible result, as well as other activities classified as work in obedience to the laws of the Republic of Kazakhstan;

      7) conciliation commission - a permanent collegial body that considers appeals of potential suppliers who have evaded the conclusion of a contract and are included in the register of unfair procurement participants or the list of unreliable potential suppliers (vendors) of the Fund. The composition, working and decision-making procedure of the conciliation commission shall be determined by the procurement rules. The conciliation commission shall necessarily include representatives of the National Chamber of Entrepreneurs of the Republic of Kazakhstan, branch associations (unions) accredited in the National Chamber of Entrepreneurs of the Republic of Kazakhstan;

      8) services - activities aimed at satisfying the needs of the customer, with no tangible result;

      9) organisations of the Fund - legal entities, fifty percent or more of the voting shares (participatory interests) of which are directly or indirectly owned by the Fund on the right of ownership or trust management. Indirect ownership means ownership of fifty percent or more of the voting shares (participatory interests) of another legal entity by each successive legal entity on the right of ownership or trust management;

      10) an off-take contract - a contract concluded between a customer and a supplier for the supply of goods that the supplier plans to produce and ensure their delivery in the future, under pre-agreed terms of value, quantity (volume) and delivery dates;

      11) procurement - the purchase of goods, works and services by customers on a fee basis in obedience to the procedure prescribed by this Law and the procurement rules;

      12) procurement web portal: an information system for electronic procurement in compliance with this Law and the procurement rules;

      13) procurement participant - customer, organiser of procurement, potential supplier, supplier and operator of the electronic procurement information system;

      14) a centralised procurement control service - a service of a national management holding company, a national holding company, a national company other than a national company in which the national management holding company or national holding company is a shareholder, and a service of a socio-entrepreneurial corporation;

      15) procurement rules - depending on the scope of the regulated relationship:

      for certain quasi-public sector entities other than the Fund and the Fund's organisations - a legal act determining the procedure for procurement by certain quasi-public sector entities other than the Fund and the Fund's organisations, approved by the authorised procurement body;

      for the Fund and the Fund's organisations - the procurement procedure for the Fund and the Fund's organisations, approved by decision of the Board of Directors of the Fund in agreement with the procurement authority (hereinafter - the procurement procedure for the Fund);

      16) procurement organiser: an official or organisational unit of the customer or a legal entity designated as responsible for the implementation of the organisation and conduct of procurement procedures;

      17) procurement expert commission: a collegial body established by the organiser of the procurement or the customer with the involvement of experts to participate in developing the terms of reference and (or) the technical specification of the goods, works and services to be procured and (or) preparing an expert opinion on the compliance of potential suppliers' offers with the technical specification of the goods, works and services to be procured;

      18) procurement expert: a natural person with special and/or relevant technical knowledge, experience and qualification in the field of procurement, confirmed by relevant documents (diplomas, certificates, certificates and other documents), engaged by the organiser of the procurement or the customer to participate in the development of the terms of reference and (or) the technical specification of the goods, works and services to be procured and (or) the preparation of an expert opinion on the compliance of potential suppliers' offers with the technical specification of the goods, works and services to be procured;

      19) procurement authority - the central executive body responsible for the management as well as inter-sectoral coordination of procurement of certain quasi-public sector entities;

      20) procurement contract (hereinafter referred to as “contract”) - a civil law contract concluded in obedience to this Law, the civil legislation of the Republic of Kazakhstan and the procurement rules;

      21) customers - certain quasi-public sector entities;

      22) goods - items (things), including semi-finished or raw materials in solid, liquid or gaseous state, electric and thermal energy, objects of intellectual property rights, as well as proprietary rights, with which purchase and sale transactions can be made in accordance with the laws of the Republic of Kazakhstan;

      23) Tender Commission (Auction Commission) – a collegial body established by the organiser of the procurement or the customer to carry out the procurement procedure by means of a tender (auction);

      24) National Welfare Fund (hereinafter referred to as the Fund) is a national management holding company;

      25) e-shop: an information system integrated with a web-based procurement portal, providing procurement as determined in the procurement rules;

      26) e-procurement information system operator - depending on the scope of the relationship:

      for certain quasi-public sector entities, other than the Fund and the Fund's organisations, the legal person(s) designated by the authorised procurement body, the powers of which are determined in the procurement rules;

      for the Fund and the Fund's organisations - a legal person determined by the Fund, the powers of which are defined in the Fund's procurement procedures.

Article 3. Legislation of the Republic of Kazakhstan on procurement by quasi-public sector entities

      1. Legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities is based on the Constitution of the Republic of Kazakhstan and consists of the provisions of the Civil Code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. The rules of the international treaty shall apply if an international treaty ratified by the Republic of Kazakhstan establishes rules other than those stipulated in this Law.

      Article 4: Principles of Procurement

      Procurement shall be based on the principles of:

      1) optimal and efficient use of the money used for procurement;

      2) openness and transparency of the procurement process, while respecting suppliers' rights and/or legitimate interests in commercial confidentiality (before the tender results are finalised);

      3) fair competition among potential suppliers, avoiding collusion between bidders;

      4) responsibilities of procurement participants;

      5) preventing corrupt practices;

      6) providing support to domestic producers of goods as well as domestic suppliers of works and services to the extent that this does not contradict international treaties ratified by the Republic of Kazakhstan;

      7) acquisition of innovative and high-tech goods, works and services;

      8) providing potential suppliers with an equal opportunity to participate in the procurement procedure, except as provided for in this Law;

      9) respect for the intellectual property rights contained in the goods procured.

Article 5. Procurement process

      1. The procurement process shall include:

      1) developing and approving a procurement plan (preliminary, annual, long-term ones);

      2) selecting and contracting a supplier;

      3) contract execution.

      2. The procurement process may also include procedures for the management of procurement categories and inventory management in accordance with procurement rules.

      3. Procurements shall be made via the web-based procurement portal, except as provided for in Article 18 of this Law.

Article 6. Procurement planning

      1. Procurement planning shall be based on relevant business plans and/or budgets and/or development plans and/or repair plans and/or production programmes and/or investment programmes and/or contracts for the fulfilment of the public task.

      2. Procurement plan (preliminary, annual, long-term one) shall be published on the procurement web portal.

      3. The customer, organiser of procurement shall divide heterogeneous goods, works and services into lots pursuant to their homogeneity, homogeneous goods - by types of homogeneous goods and by places of delivery, homogeneous works, services - by place of their performance, provision, except for cases provided for in the procurement rules.

      Paragraph 4 of Article 6 shall be effective since 01.01.2023.

      4. Price planning for a list of identical goods shall be carried out within the price tolerance determined by:

      1) for certain quasi-public sector entities, other than the Fund and the Fund's organisations, in obedience to the procurement rules;

      2) for the Fund and the Organisations of the Fund - in the manner determined by the Fund.

      The list of identical goods for certain quasi-public sector entities other than the Fund and the Fund's organisations shall be determined by the authorised procurement body.

      The list of identical goods for the Fund and the Fund's organisations shall be determined by the Fund.

      5. The procedure and deadlines for developing, approving and amending the procurement plan shall be set out in the procurement rules.

Article 7. Restrictions on participation in procurement

      1. A potential supplier may not participate in an ongoing procurement if:

      1) the potential supplier or its subcontractor (co-contractor) or consortium member is on the register of unfair participants in public procurement and/or on the list of unfair potential suppliers (vendors) of the Fund and/or on the list of debtors in respect of whom a court decision on declaring them bankrupt has entered into legal force;

      2) the potential supplier and (or) subcontractor (co-contractor) engaged by it, and (or) their manager, and (or) founders (shareholders) are included in the list of organisations and persons connected with financing of terrorism and extremism, or in the list of organisations and persons connected with financing of proliferation of weapons of mass destruction, in the manner established by the Law of the Republic of Kazakhstan “On Counteracting Money Laundering and Financing of Terrorism”;

      3) the potential supplier is a legal entity the place of incorporation of which is a state or territory included in the list of states with preferential tax treatment approved by the authorised state body responsible for ensuring the collection of taxes and other compulsory payments to the budget.

      2. No contract shall be awarded to potential suppliers referred to in paragraph 1 hereof.

Article 8. Qualification requirements for a potential supplier

      1. The qualification requirements for a potential supplier shall be determined in compliance with the procurement rules.

      2. The potential supplier shall submit the relevant documents required by the procurement rules to demonstrate its qualifications.

      3. The potential supplier - non-resident of the Republic of Kazakhstan in confirmation of its compliance with the qualification requirements established by the procurement rules shall submit the same documents as residents of the Republic of Kazakhstan, or documents confirming similar information on the qualifications of the potential supplier - non-resident of the Republic of Kazakhstan.

      Article 9: Consequences for a potential supplier or vendor providing inaccurate information

      1. Potential suppliers or suppliers who have provided inaccurate information during the procurement process shall be included in the register of unfair procurement participants, the list of unreliable potential suppliers (vendors) of the Fund as determined in the procurement rules.

      2. The credibility of the information provided by a potential supplier or vendor may be ascertained by the customer, the organiser of the procurement, the centralised procurement control service, the authorised procurement body or the state audit and financial control authorities at any stage of the procurement process.

      3. The Centralised Procurement Monitoring Service, the authorised procurement body or the state audit and financial control authorities, which have established that the potential supplier or supplier has provided inaccurate information, shall notify in writing of this fact no later than five working days from the day on which such fact is established:

      1) the customer, if such a fact is established after summing up the results of the procurement;

      2) the customer, the organiser of the procurement, if such a fact is established before summing up the results of the procurement.

      The written notification must be accompanied by copies of the documents proving this fact.

Article 10. Register of unfair procurement participants

      1. The register of unfair participants in procurement shall be formed in the electronic procurement information system.

      2. The register of unfair procurement participants shall be a list of:

      1) potential suppliers identified as winners but who have avoided the contract;

      2) potential suppliers or suppliers who have provided inaccurate information on the qualification requirements and/or documents affecting the tender offer;

      3) suppliers who have failed to fulfill or improperly fulfilled their contractual obligations.

      In the case referred to in sub-paragraph 1) of part one of this paragraph, the customer shall send information on such potential supplier to the centralised procurement control service within ten working days from the date on which the potential supplier refuses to conclude the contract.

      In the case referred to in sub-paragraph 2) of part one of this paragraph, the customer, the organiser of the procurement shall file a claim with a court to have such potential supplier or supplier declared an unfair participant in the procurement no later than thirty calendar days from the day when they became aware of the violation.

      In the case referred to in sub-paragraph 3) of part one of this paragraph, the customer shall be obliged to take legal action to declare such supplier an unfair participant in the procurement not later than thirty calendar days from the day when it/he/she became aware of the supplier's breach of contract, unless the supplier pays a forfeit (fine, penalty) and fully performs its contractual obligations.

      3. The conciliation commission shall consider the application of the potential supplier and take a decision on early removal or refusal of early removal of the potential supplier from the register of unfair participants in procurement.

      4. The register of unfair participants in procurement shall be formed based on:

      a decision by the centralised procurement control office in the case provided for in sub-paragraph 1) of part one of paragraph 2 hereof;

      a legally enforceable court judgement in the cases provided for in sub-paragraphs 2) and 3) of part one of paragraph 2 hereof.

      5. Potential suppliers included in the register of unfair participants in procurement on the ground provided for by sub-paragraph 1) of part one of paragraph 2 hereof shall be prohibited to participate in procurement for twenty-four months from the date of the decision to declare them unfair participants in procurement.

      Potential suppliers or suppliers included in the register of unfair participants in procurement on the grounds provided for in sub-paragraphs 2) and 3) of part one of paragraph 2 hereof shall be prohibited to participate in procurement for twenty-four months from the date of entry into legal force of the court decision declaring such potential suppliers or suppliers to be unfair participants in procurement.

      Grounds for removal from the register of unfair procurers shall be:

      1) the expiry of the period set out in parts one and two of this paragraph;

      2) a valid judicial decision overturning a decision declaring a prospective supplier or supplier to be an unfair procurer;

      3) the conciliation commission's decision to remove a potential supplier from the register of unfair suppliers.

      6. A decision to include a potential supplier or supplier on the register of unfair participants in a procurement may be appealed against in obedience to the legislation of the Republic of Kazakhstan.

Article 11. Modalities of procurement

      1. Procurement shall be carried out in the following ways:

      1) tender;

      2) auction;

      3) budget enquiry;

      4) from a single source;

      5) through commodity exchanges;

      6) through e-shop;

      7) through intra-holding cooperation.

      2. The procedure for procurement by the means provided for in paragraph 1 hereof shall be governed by the procurement rules.

      3. Procurement by the means provided for in sub-paragraphs 1) and 3) of paragraph 1 hereof may be carried out with a pre-qualification process in compliance with the procurement rules.

      4. Procurements in the manner provided for in sub-paragraph 2) of paragraph 1 hereof shall not apply when the Fund and the organisations of the Fund carry out procurements.

      5. The method of procurement provided for in sub-paragraph 5) of paragraph 1 hereof shall apply to the list of exchange goods approved by the authorised body in the field of trade regulation.

      6. The method of procurement provided for in sub-paragraph 7) of paragraph 1 hereof shall apply only to the procurement of the Fund and the organisations of the Fund.

      7. The method of procurement shall be determined by the purchaser in obedience to this Law, the procurement rules.

      8. The following shall be prohibited in procurement:

      1) when the tender documents (auction documents) establish qualification requirements for potential suppliers that are not provided for in the procurement rules, or when the tender documents (auction documents) or the information to be posted, when carrying out procurement by request for quotations, specify the characteristics determine whether the goods, works or services to be purchased belong to certain potential suppliers, except for cases:

      procurement of goods, works and services for the completion, retrofitting, unification or compatibility with existing goods, works and services, as well as for further technical support, maintenance and repair, including scheduled repairs (if necessary), of the main (installed) equipment;

      unless otherwise stipulated in the procurement strategy developed and approved in compliance with the Fund's procurement procedures;

      the purchase of goods, works and services to fulfil the customer's obligations under the contract concluded by it as a supplier with a non-resident of the Republic of Kazakhstan, and the existence in this contract of appropriate references to trademarks, service marks, trade names, patents, utility models, industrial designs, name of place of origin of goods and name of manufacturer, as well as other information and (or) documents that determine whether the goods, works, services purchased belong to a particular potential supplier or not;

      2) refusal to carry out procurement in cases not covered by the procurement rules;

      3) a potential supplier and/or subcontractors for work or co-contractors for services are found to be non-compliant with the qualification requirements and/or requirements of the tender documents (auction documents) on grounds not provided for in the procurement rules;

      4) non-division of heterogeneous goods, works and services into lots based on homogeneity, homogeneous goods - by type of homogeneous goods and by place of delivery, homogeneous works, services - by place of performance, except for cases stipulated by the procurement rules;

      5) preparation of a knowingly false expert opinion by a procurement commission or a procurement expert, on the basis of which an unlawful decision was taken by the tender commission (auction commission);

      6) single-source procurement in cases not covered by the procurement rules;

      7) requiring a potential supplier to submit documents that are not required by the tender documents.

Article 12. Conclusion and execution of the contract

      1. The contract shall be concluded and executed in obedience to this Law, the civil legislation of the Republic of Kazakhstan and the procurement rules.

      2. Liability for non-performance or improper performance of contractual obligations must be provided for the parties to the contract on a parity basis.

      The contract shall contain provisions for full payment for the supply of goods, works or services within a period not exceeding thirty working days from the date of performance of the obligations under the contract.

      3. The draft contract or the concluded contract may be amended by mutual agreement of the parties in cases provided for in the procurement rules.

      4. No amendments may be made to the draft contract or the concluded contract that may change the content of the conditions of the ongoing (conducted) procurement.

      5. Offtake contracts shall be concluded by certain quasi-public sector entities, other than the Fund and the Fund's organisations, in the manner determined by the competent authority in the field of procurement.

      Offtake contracts shall be entered into by the Fund and the Fund's organisations in compliance with the procedure determined by the Fund.

      No unilateral changes to an existing off-take contract shall be made to reduce the scope of the procurement and the price of the contract.

Article 13. Competence of an authorized body for procurement

      An authorised procurement body shall:

      1) determine web portals for procurement by certain quasi-public sector entities other than the Fund and the Fund's organisations;

      2) approve the rules for the operation of the web portals for the procurement of certain quasi-public sector entities other than the Fund and the Fund's organisations, including in case of technical failures in the operation of the web portals;

      3) request the necessary information and materials from the parties to the procurement in accordance with the procurement rules;

      4) engage experts from state bodies and other organisations to carry out expert examinations and consultations;

      5) develop and approve procurement guidelines for certain quasi-public sector entities other than the Fund and the Fund's organisations, including in coordination with the authorised bodies of the relevant sectors;

      6) approve the rules for the establishment and maintenance of procurement registers of certain quasi-public sector entities, other than the Fund and the Fund's organisations;

      7) draw up and approve the rules of control exercised by the centralised procurement control service, with the exception of the centralised procurement control service of the Fund;

      8) institute and consider cases of administrative offences in procurement by certain quasi-public sector entities and impose administrative penalties in compliance with the procedure established by the Code of Administrative Offences of the Republic of Kazakhstan;

      9) approve the procedure for the conclusion and execution of an oftake contract for certain quasi-public sector entities other than the Fund and the Fund's organisations;

      10) approve the manner in which the Fund and the organisations of the Fund enter into and execute an oftake contract;

      11) exercise other powers stipulated by this Law, other laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Article 14. Competence of certain quasi-public sector entities in procurement

      1. The Fund shall supervise and provide methodological guidance, monitoring and analysis on the procurement of the Fund and the Fund's organisations.

      2. The Fund shall perform the following functions:

      1) determine the web portal for procurement of the Fund and the Fund's organisations;

      2) approve the rules for the operation of the web-portal for procurement of the Fund and the Fund's organisations, including in the event of technical failures on the web portal;

      3) approve the rules for the formation and maintenance of registers, lists in the area of procurement of the Fund and the Fund's organisations;

      4) approve the manner in which the Fund and the Fund's organisations enter into and execute an ophthalmic contract;

      5) determine the structural unit of the Fund acting as the centralised procurement control service for the Fund and the organisations of the Fund;

      6) exercise other powers as set out in this Law, other laws of the Republic of Kazakhstan, the charter of the Fund and the Fund's procurement procedures.

      3. The Board of Directors of the Fund shall:

      1) approve the Fund's procurement procedures;

      2) approve the rules for monitoring the implementation of the Fund's procurement.

      4. The first head, deputy head or other head of the contracting authority or the organiser of the procurement shall be appointed as chairman of the procurement commission.

Article 15. Control over compliance with the legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities

      1. Control over the compliance of certain quasi-public sector entities with the requirements of this Law and the procurement rules shall be carried out by the centralised procurement control service and the authorised procurement authority.

      2. The centralised procurement control service of certain quasi-public sector entities, other than the Fund and the Fund's organisations, shall be accountable to the board of directors of the quasi-public sector entity, which shall determine the quantitative composition, term of office and operating procedures of the centralised procurement control service, appoint and terminate the powers of its head and determine the amount and other conditions of remuneration of its employees.

      The Central Procurement Control Service of the Fund and the Fund's organisations shall report directly to the Board of Management of the Fund. The control procedure shall be set out in the Fund's procurement control rules.

      3. The objects subjected to control shall be:

      1) a purchaser, an organiser of procurement, a tender commission (auction commission), an expert procurement commission, a procurement expert;

      2) a potential supplier, supplier, and persons engaged by them as subcontractors for the performance of works or co-contractors for the provision of services, within the scope of the subject matter of the procurement being made;

      3) e-procurement information system operator.

      4. The grounds for monitoring compliance with procurement rules shall be:

      1) a written application or an application received via publicly available information systems and complying with the requirements of the legislation of the Republic of Kazakhstan on electronic document and electronic digital signature, of a potential supplier or a supplier taking part in a tender or auction, or its authorised representative with a complaint against actions (inaction), decisions of the customer, organiser of procurement or tender commission (auction commission), procurement expert, operator of electronic procurement information system;

      2) law enforcement orders received;

      3) inspection plan for the centralised procurement control service.

      5. Upon detection of any breaches of the procurement rules as a result of the monitoring, the Centralised Procurement Monitoring Service shall send to the subject of the monitoring:

      1) a binding remedial notification no later than three working days from the date of the discovery of the infringement;

      2) a binding act of the planned inspection containing recommendations for the elimination of detected irregularities and their causes.

      6. If, based on the results of control, the fact of an act (omission) containing elements of a criminal offence committed by the object of control is revealed, the centralized procurement control service shall forward information on the commission of the said act (omission) and documents confirming such fact to law enforcement agencies within five working days from the day of revealing such fact.

      7. If the centralised procurement control service issues a remedial notification, the object of control shall remedy the breaches specified in the notification within ten working days of the day following the date of delivery (receipt) of the notification.

      8. In the event of failure to comply with the notification to rectify irregularities detected as a result of the control within the period specified in paragraph 7 hereof, the centralised procurement control service shall transfer the materials to the authorised procurement body.

Article 16. Appeal against actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), procurement expert, expert commission on procurement, operator of information system for electronic procurement, decision of centralized service on procurement control

      1. A potential supplier, supplier shall be entitled to appeal against actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), expert on procurement, expert commission on procurement, operator of information system of electronic procurement if their actions (inaction), decisions violate rights and (or) legitimate interests of the potential supplier, supplier.

      2. A potential supplier shall be entitled to appeal against the actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), procurement expert, expert commission on procurement, operator of information system of electronic procurement, if their actions (inaction), decisions violate the rights and (or) legitimate interests of the potential supplier before the date of opening of applications, price offers.

      3. A potential supplier, who participated in the procurement, may appeal against the actions (inaction), decisions of the customer, organizer of procurement, tender commission (auction commission), expert on procurement, expert commission on procurement, operator of information system of electronic procurement within two working days from the date of publication of the protocol on the results of procurement, if their actions (inaction), decisions violate the rights and (or) legitimate interests of the potential supplier, who participated in the procurement.

      4. In response to a potential supplier not agreeing with the results of the tender, the tender committee shall submit a reasoned decision.

      5. In the cases provided for in paragraphs 2 and 3 hereof, the conclusion of the contract shall be suspended until the expiry of the time limit for the examination of the complaint.

      6. Upon expiration of time limits set by paragraphs 2 and 3 hereof, an appeal against actions (inaction), decisions of customer, organizer of procurement, tender commission (auction commission), expert on procurement, expert commission on procurement, operator of information system of electronic procurement to the centralized service on procurement control shall be made in obedience to the laws of the Republic of Kazakhstan.

      7. A complaint by a potential supplier, vendor may be submitted via the web portal for procurement in obedience to the legislation of the Republic of Kazakhstan on electronic document and electronic digital signature.

      8. Based on the results of the review of the complaint received within the time limits set out in paragraphs 2 and 3 hereof, the centralised procurement control unit shall decide whether to cancel and/or revise, or refuse to cancel and/or revise, the procurement results.

      A decision to reject the cancellation and/or review of the procurement results, containing the conclusions that no cancellation and/or review of the procurement results is necessary, with justification, shall be communicated to the applicant within three calendar days of the date of such decision.

      9. In the event of disagreement with the decision of the centralised procurement control unit made pursuant to paragraph 8 hereof, the potential supplier shall be entitled to appeal to a court of law.

Article 17. Liability for violation of the legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities

      Violation of the requirements of the legislation of the Republic of Kazakhstan on procurement by certain quasi-public sector entities shall entail liability established by the laws of the Republic of Kazakhstan.

Article 18. Special procurement procedures

      1. Procurements with application of a special procedure shall be carried out in cases of purchase of goods, works, services, information on which constitutes state secrets and (or) contains official information of limited distribution, determined by the Government of the Republic of Kazakhstan, as well as within the framework of the state defence order in compliance with the legislation of the Republic of Kazakhstan on defence industry and the state defence order and in cases provided for by the rules of procurement.

      2. The special procedure shall be determined by the procurement rules.

      3. Special procedure procurement shall be carried out without the use of a web-based procurement portal.

Article 19. Enactment procedure of this Law

      This Law shall come into force on 1 January 2022, except for paragraph 4 of Article 6, which shall come into force on 1 January 2023.

      President of the Republic of Kazakhstan K. TOKAYEV

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