RESTRICTED
WORLD TRADE WT/ACC/KAZ/6/Add.1
7February 1997
ORGANIZATION(97-0485)
Original: English
ACCESSION OFKAZAKSTAN
Questions andReplies
totheMemorandum ontheForeign Trade Régime
(Document WT/ACC/KAZ/3)
Addendum
Additional questions submitted byMembers andthereplies thereto provided bytheauthorities
ofKazakstan arereproduced hereunder.
_______________WT/ACC/KAZ/6/Add.1
Pageii
TABLE OFCONTENTS
Page
No.Quest.
No.
II. ECONOMY, POLICIES AND FOREIGN TRADE 1
2. Economic Policies 1
(a) Main directions ofongoing economic policies 1
Pricing policy 1 1-3
Private sector development /privatization 4 4-5
Sectoral priorities 5 6-12
(b) Monetary andfiscal policy 8 13-14
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
AFFECTING FOREIGN TRADE INGOODS AND TRADE IN
SERVICES9
3. Division ofAuthority between Central andSub-Central
Governments9 15-16
IV. POLICIES AFFECTING TRADE INGOODS 10
1. Import Regulation 10
(b) Characteristics ofnational tariff andnomenclature 10 17-18
(c) Tariff quotas andtariff exemptions 10 19-21
(d) Other duties andcharges, specifying anycharges forservices
rendered11
Customs processing feesandother customs services 11 22
Value added tax(VAT) 11 23-28
Excise taxes 13 29-35
(e) Quantitative import restrictions, including prohibitions, quotas
andlicensing systems15 36
(h) Customs valuation 15 37
(j) Pre-shipment inspection 17 38-40
(l) Rules oforigin 17 41-42
(m)(n)(o) Anti-dumping régime, Countervailing dutyrégime, Safeguard
Regime18 44-46
2. Export Regulation 19
(d) Export licensing procedures 19 46-47
(e) Other measures, e.g.minimum export prices, voluntary export
restrictions, orderly marketing arrangements20 48-50
3. Internal Policies Affecting Foreign Trade inGoods 21
(a) Industrial policy, including subsidy policies 21WT/ACC/KAZ/6/Add.1
Pageiii
Page
No.Quest.
No.
Agricultural subsidies 21 51-58
Non-agricultural subsidies 23 59-62
(b)(c) Technical regulations andstandards, Sanitary andphytosanitary
measures, including measures taken withrespect toimports24 63-64
(d) Trade-related investment measures 25 65-67
(j) Government-mandated counter-trade andbarter 26 68-69
(l) Government procurement practices 26 70-71
4. Policies Affecting Foreign Trade inAgricultural Products 26 72
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 27 73-76
VI. TRADE-RELATED SERVICES REGIME 28
1. General 28 77-86
Financial services 31 87-90
Telecommunications services 38 91-94
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES38 95-100WT/ACC/KAZ/6/Add.1
Page1
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
II.2 Economic Policies
II.2(a) Main directions andgoals
Pricing Policy
Question 1.
Kazakstan 'sMemorandum states that"only public services suchaselectricity, water supply, gas,
heating, postal, public transport andstate services (e.g. automobile inspection, licensing and
registration fees)remain subject toprice control" (page 8).Wewould appreciate more information
about price control policies andpractices inthese areas.
Could Kazakstan elaborate onthenature ofandrationale forprice control measures applied in
eachofthese areas, andwhether theyhave animpact ontrade andinvestment?
Answer:
a.Public Services
TheState Committee onPricing andAnti-Monopoly Policy (Anti-Monopoly Committee)
isthestatebodyresponsible forcontrolling prices ofpublic services. Public services, subject toprice
control inKazakstan, areheatdistribution, sewage systems, telecommunication services (domestic and
international communication services, telegraph communication services, cable radio installation,
receiving/transmitting TVandradio programs viasatellite, datatransmission through communication
channels), water distribution, electricity, andgas.Themain objective ofKazakstan 'spricing policy
inpublic services istheestablishment ofeconomically justifiable prices forallconsumers reflecting,
where applicable, interalia,thecostofproduction, thecostoftransportation, andtheprofitability
ofentities providing suchservices. Thecostofproduction applies onlytoheatandwater where fixed
prices areusedtocontrol prices atproduction. Thecostoftransportation isdetermined through tariff
ratesestablished toregulate natural monopolies (e.g.power transmission anddistribution networks,
telecommunication networks, gaspipelines, heatpipelines, sewage network, andwater distribution
networks). Therationale ofprice control forpublic services (utilities) isthatsuchservices depend
heavily onnatural monopolies.
Public services arecertainly important fortrade inservices andinvestment inKazakstan.
Most investors are,ononehand, consumers ofsuchservices andsome, ontheother hand, have
committed investment insome oftheinfrastructure (natural monopolies) delivering suchservices.
Inaddition, many investors deliver theirservices using thenatural monopoly infrastructure. Therefore,
theobjective ofthepricing policy regarding public services inKazakstan isdesigned tobalance the
interests oftheconsumers (thisincludes mostinvestors inKazakstan) andtheinvestors inthenatural
monopoly infrastructure.
b.State Services
Stateservices areprovided bythose entities authorized bythestatetorender suchservices.
Feesandduties thatmaybecharged bysuchentities areestablished bylegislation. There isnoone
single legislation governing price control overstateservices. Feesandduties forstateservices are
either advalorem orfixed. Thefollowing tablesummarizes stateservices andtheentities responsible
forrendering suchservices.WT/ACC/KAZ/6/Add.1
Page2
State Services Subject toPrice Control Entity Responsible forRendering Services
i State auto-inspection TheState Automobile Inspection Department
under theMinistry ofInternal Affairs
ii. Sanitary-epidemiological services
- services ofresearch laboratories
regarding bacteria, viruses,
radiology, noise, andvibration
- sanitary andchemical research of
water, air,andsoil
- certification ofwork place evaluation
ofdesign projects forsanitary
purposesSanitary-Epidemiological Stations under the
Ministry ofHealth.
iii. State veterinary services
- issuance oflicense forveterinary
activities
- approval ofimport/export license of
veterinary medicines
- registration ofveterinary medicineTheMinistry ofAgriculture
iv Statistical information services TheStatistics Committee
v. Registration ofmass media products National Agency onPress andMass Media.
vi. Fireinspection TheFireInspection Department under the
Ministry ofInternal Affairs.
vii. Evaluation ofconstruction projects Anylicensed entity
viii. Alltrade marks andpatents related
services including registration;
searches; andinvestigations asset
forth inAnnex 10of
WT/ACC/KAZ/3.ThePatent Office under theMinistry of
Industry andTrade
ix. Registration ofcopyrighted materials TheState Agency onCopyrights andRelated
Rights
x. Registration oflegalentities TheMinistry ofJustice.
xi. Customs processing andother
customs services asdescribed in
Table 4.1ofWT/ACC/KAZ/3TheCustoms Committee.
xii. Receipt ofcertificate oforigin for
export purposeTheTrade andIndustry Chamber.
xiii. Registration ofexport contract TheCommodity Exchanges.
xiv. Obtaining licenses toperform
economic activitiesAuthorized State bodies according to
Table A7.5 ofWT/ACC/KAZ/3.
xv. Evaluation ofapplication for
import/export licenses byauthorized
State bodies andministries according
toTable A3.1 andTable A9.1 of
WT/ACC/KAZ/3State bodies andministries according toTable
A3.1 andTable A9.1.
xvi. Evaluation oflicense application to
perform economic activitySanitary, ecological, andmining supervision
bodies inaccordance withGovernment
Resolution No.1894 of29December 1995.WT/ACC/KAZ/6/Add.1
Page3
State Services Subject toPrice Control Entity Responsible forRendering Services
xvii. Consultancy feescharged bycertain
ministries regarding laws
administered bysuchministriesRespective ministries
xviii. Safeguard services (e.g.protection of
premises)TheMinistry ofInternal Affairs
Stateduties arespecified bytheLaw"OnStateDuties" of31December 1996. Stateduties
areallfixed based onMonthly Evaluation Index. Thefollowing isalistofallactivities subject to
stateduties:
- claims submitted tocourt appeals, issuance ofcopies bythecourt;
- notary actions andnotarization ofdocuments;
- public registry (marriage, divorce, birth, death, etc.);
- registration related totravel abroad andissuance ofletter ofinvitation forvisas;
- issuance ofvisas;
- processing ofdocuments forcitizenship related matters;
- registration ofplace ofliving;
- registration forhunting right; and
- registration andre-registration ofcivilarmaments.
Thereason forprice control overState feesandduties charged byentities rendering State
services isthatonlyoneentity isauthorized bytheGovernment torender aspecific service.
Feesandduties aretransparent. Withtheexceptions offeesforintellectual property related
matters, feesapply equally toforeign andnational legalandnatural persons. Certain feesarecurrently
advalorem anddonotreflect thecostofservices rendered. Please notethatKazakstan iscurrently
intheprocess ofevaluating those statefeesandduties toensure theyreflect thecostofservices rendered.
c. Public Transport
Prices forpublic transport (e.g. buses, trolleys) areestablished andcontrolled bylocal
administration.
d. State Postal Services
TheStatePostOffice isconsidered a"natural monopoly" andtariff ratesforpostal services
areregulated bytheAnti-Monopoly Committee (AMC). Currently, there areplans toeliminate the
StatePostOffice fromthelistofnatural monopolies in1997. Rates established byprivate competing
companies inthissector arenotregulated bytheAMC.
Currently, thereisnosignificant competition forpostal services within Kazakstan. However,
there arenobarriers toenter thissector. Licenses arerequired tobeengaged inpostal services and
could beapplied forattheMinistry ofTransport andTelecommunications according totheLawon
Licensing.
Please notethattherearecurrently more thandozen national andforeign companies rendering
parcel andcourier services throughout Kazakstan. Companies likeDHL, UPS, Pony Express, TNT,
AseExpress dominate ininternational courier services.WT/ACC/KAZ/6/Add.1
Page4
Question 2.
Could Kazakstan confirm thattheGovernment doesnotintervene anywhere elsewithaviewto
directly influencing ordetermining prices ofgoods orservices, including through price stabilisation
schemes?
Answer:
Kazakstan confirms thattheGovernment doesnotintervene anywhere elsewithaviewto
directly influencing ordetermining prices ofgoods orservices, including through price stabilisation
schemes. Please noteunder thenextquestion thelistofnatural monopolies subject totariffregulation.
Question 3.
Could Kazakstan provide acomprehensive listoftheindustry sectors thatitwould regard as
natural monopolies?
Answer:
Thefollowing industry sectors areregarded asnatural monopolies:
- transmission anddistribution ofelectricity;
- distribution ofheat;
- oilandoilproducts pipelines;
- gaspipelines;
- railroads;
- water sewage systems;
- airnavigation (landing/take-off andusage ofairroutes);
- telecommunication networks; and
- State postoffice.
Private sector development /privatization
Question 4.
When State-owned enterprises areprivatised, areforeign investors accorded national treatment?
Answer:
Yes. When state-owned enterprises areprivatized, foreign investors areaccorded national
treatment. Article 2oftheLaw"OnPrivatization" of23December 1995 states thatforeign natural
andlegalpersons havetherighttobebuyers intheprivatization process likelocalnatural andlegal
persons. Inaddition, Article 3ofCivil Code of27December 1994 states thatforeign natural and
legalpersons havethesame rights provided forbythecivillegislation forcitizens andlegalentities
ofKazakstan unless otherwise stipulated bylegislation. Currently, nolegislative actsofKazakstan
stipulate discriminatory treatment concerning foreign participation inprivatization.
Question 5.
Why isforeign ownership oflandnotallowed where thelandisusedforthepurpose ofpersonal
farming, horticulture ordacha construction (page 10)?Arethere plans toliftthese restrictions?
Answer:
Foreign ownership oflandisnotallowed where landisusedforthepurpose ofpersonal
farming, horticulture ordacha construction. Themain reason isthatthistypeoflandislimited.
Kazakstan doesnothaveanycurrent plans toliftthese restrictions.WT/ACC/KAZ/6/Add.1
Page5
Sectoral priorities
Question 6.
WewelcometheKazakstanGovernment'sintention"tocontinueimprovingthelegalandregulatory
regime inorder toestablish conditions conducive forinvestment inallsectors, without exception",
anditsgoalofattracting foreign investment aswellasencouraging domestic investment (page 10).
Ourunderstanding isthat, inthemining sector, therelevant legislation onthelicensing ofusers
ofnatural resources provides forthree types oflicense -anexploration license, amining license,
andacombined exploration/mining license often referred toasa"complex license".
Isitthecasethat, since May1996, thelegislation hasbeeninterpreted soastoprohibit theissue
ofthe"complexlicense"andinstituteatwo-stageexploration-then-miningapproach?Isthisproving
unattractive toinvestors, andisthisdisadvantaging companies which failed tocomplete "complex
license" negotiations before May1996?
Answer:
There arenolawsorlegalactswhich prohibit theissuance ofcomplex license inthemining
sector inKazakstan. Article 24oftheLawonSubsurface Utilization of27January 1996 permits the
issuance ofcombined exploration/production license. Also, Article 7ofGovernment Resolution No.
1017 of16August 1996 permits theissuance ofcombined licenses (exploration andproduction).
Licenses forexploration, production, andexploration/production ofthesubsurface areissued
onthebasis ofatender, asarule. Licenses areissued bytheGovernment ("Cabinet ofMinisters")
andbecome effective afterregistration attheMinistry ofGeology andtheProtection ofSubsurface
(MinGeo).
Tenders maybeofanopenoraclosed typeandareannounced bytheGovernment orpursuant
toitsinstructions theymaybeannounced byMinGeo. Theterms forconducting anopen-type tender
must bepublished inofficial publication. Theterms forconducting aclosed -type tender shallbe
communicated toallitspotential participants notlaterthan90daysprior toitsdate.
License mayalsobeissued asresult ofdirect negotiations withtheGovernment orbyabody
(Commission) authorized bytheGovernment.
Itisnotthecasethat,since May1996, thelegislation hasbeeninterpreted soastoprohibit
theissueofthe"complex license" andinstitute atwo-stage exploration-then-mining approach. More
than45complex licenses (exploration/mining) havebeenissued since May1996.
Inaddition, please notethat,according toArticle 22oftheGovernment Resolution No.1017
of16August 1996: when auseful mineral isdiscovered, thelicensee shallhavetherighttoextend
thelicense foraperiod which isneeded fortheappraisal ofthecommercial discovery. Inthecase
ofacommercial discovery theholder oftheexploration license shallhavetheexclusive right tobe
issued theproduction (mining )license, provided theterms oftheexploration license areimplemented.
Question 7.
Which government agency isultimately responsible fordeciding whether anapplication forthe
issueofamining license istobegranted ofrefused? Isthatagency solely responsible fordecisions
taken?WT/ACC/KAZ/6/Add.1
Page6
Answer:
TheGovernment isultimately responsible fordeciding whether anapplication fortheissue
ofamining license (except license forcommonly occurring useful minerals -suchassand, stones)
isgranted orrefused. Thegovernment issolely responsible fordecisions taken.
Oblast executive bodies (Akims) areultimately responsible fordeciding whether anapplication
fortheissue ofamining license forcommonly occurring useful minerals isgranted orrefused.
Question 8.
Istheresponsible agency legally abletoissuecombined exploration/mining licenses under current
legislation?
Answer:
Yes. Theresponsible agency (Government orAkim) islegally abletoissue combined
exploration/mining licenses under current legislation.
Article 24oftheLawonSubsurface Utilization of27January 1996 permits theissuance
ofcombined exploration/mining licenses. Inaddition, Article 23ofthesame lawrefers tothe
Government asthelicensing body forexploration andproduction ofallminerals, except commonly
occurring useful minerals. Oblast Executive bodies (theAkims) areresponsible forissuing exploration
andproduction licenses forcommonly occurring useful minerals.
Article8ofGovernmentResolutionNo.1017of16August1996statesthat(1)theGovernment
shallbethelicensing body forissuing licenses forexploration and/or production ofuseful minerals
except license forcommonly occurring useful minerals and(2)thelocalexecutive bodies (Akims of
oblasts)shallbethelicensingbodieswhichissuelicensesfortheexplorationandproductionofcommonly
occurring useful minerals.
Thecompetitive bidproposal toobtain alicense forexploration either onthebasisoftender
ordirect negotiations mustcontain thefollowing (according toArticle 18ofGovernment Resolution
No.1017):
- information concerning previous business oftheapplicant, including thelistofthestates where
theapplicant carried outitsbusiness within thelast5years, thebankreference onapplicant 's
financial status;
- intents oftheapplicant ontheterms ofexploration, including theprogram oftheoperation
andthecosts associated therewith;
- intents oftheapplicant withregard totheprotection ofthenatural environment, including
therecultivation andrecovery ofthecontractual territory land;
- indication ofthesources offinance forthedevelopment (owned orborrowed); and
- theperiod which isrequired fortheimplementation oftheinvestment program.
Thecompetitive bidproposal toobtain alicense forproduction either onthebasisoftender
ordirect negotiations mustcontain thefollowing (according toArticle 19ofGovernment Resolution
No.1017):
- information oftheexploration license andtheresults ofitsuse,ifany;
- expected dateofbeginning theproduction andwhen itattains itseconomic andtechnical
potential;
- estimated costs associated withtheproduction, andrevenues from selling useful minerals;
- projected cashreceipts oftheRepublic ofKazakstan andcapital investments intothe
development ofprotection andsocial infrastructure ofthecontract territory; and
- obligations concerning training ofKazakstan personnel.WT/ACC/KAZ/6/Add.1
Page7
According toArticle 20ofGovernment Resolution No.1017, thecompetitive bidtoobtain
acombined license fortheexploration andproduction mustcontain theprovisions asestablished for
thecompetitive bidproposal fortherighttoobtain alicense fortheexploration andtheprincipal terms
ofproduction intheevent ofcommercial discovery.
Failing toprovide therequired materials forthecompetitive bidwillnotqualify thebidder
forobtaining alicense.
Question 9.
Ifso,could Kazakstan provide details oftheprocedures andprocesses thatgovern theissue of
combined exploration/mining licenses? What lawsandregulations govern these procedures and
processes? Ifnot,what isthenature ofthelegal obstacle totheissuance ofsuch licenses, and
willthisobstacle beremoved?
Answer:
TheLawonSubsurface Utilization of27January 1996andGovernment Resolution No.1017
of16August 1996 govern procedures andprocesses forissuance ofcombined exploration/mining
licenses. TheLawonSubsurface Utilization wasprovided totheWTO Secretariat inAugust 1996.
There isnolegalobstacle fortheissuance ofcombined exploration/mining license.
Question 10.
Isthere asettimeforlimit fortheresponsible agency toprocess anapplication foracombined
exploration/mining license from thedateoflodgment until notification ofitsfinal decision?
Answer:
Theapplication foralicense isbasically acompetitive bidproposal. Article 17ofGovernment
Resolution No1017of16August 1996states thataproposal mustbeconsidered within three months
from thedateofitsreceipt.
Question 11.
Onwhat grounds cantheresponsible agency legally refuse anapplication foracombined
exploration/mining license? Istheagency required tosetoutinwriting itsreasons forrefusing
anapplication foracombined exploration/mining license?
Answer:
Article 21ofGovernment Resolution No1017of16August 1996setsthecriteria fordenying
therighttoparticipate intender ordirect negotiations. Article 22ofthesameresolution setsthecriteria
fordetermining thewinner ofatender.
Theagency (Government orAkim) isnotrequired tosetoutinwriting itsreasons forrefusing
anapplication foracombined exploration/mining license.
Article 21:
Thedenial oftherighttoparticipate inatender orindirect negotiations maytakeplace in
thefollowing cases:
- theapplication issubmitted inviolation oftherequirements ofGovernment Resolution
No.1017;
- submission bytheapplicant ofinaccurate information;
- theapplication hasnodocumentary proof thattheapplicant hasorwillhavethetechnical,
institutional, managerial, andfinancial capacities which arerequired forconducting theWT/ACC/KAZ/6/Add.1
Page8
operations associated withtheexploration and/or production asstipulated intheapplication
fortheparticipation inthetender and/or thecompetitive bidproposal.
Article 22:
Thewinner ofatender shallbedetermined onthebasis ofthesetofthefollowing criteria:
- dateofbeginning andtheintensity oftheexploration;
- dateofbeginning theproduction andwhen itattains itseconomic andtechnical potential,
andalsotheuseful mineral maximum recovery factor;
- estimated amounts ofinitial andsubsequent payments tothebudget;
- amount ofinvestments, conditions andtermoffinancing theproject andcapital investments
intothedevelopment ofproduction andsocial infrastructure ofthecontract territory;
- compliance withtherequirements relating totheprotection ofthesubsurface andthenatural
environment, andtosafeconducting ofoperations.
Question 12.
Isthere anavenue ofjudicial appeal foranyapplicant whohasbeen refused acombined
exploration/mining license? Does thejudicial authority have thepower tooverturn therefusal
ofalicense?
Answer:
Yestobothquestions.
II.2(b) Monetary andfiscal policy
Fiscal policy
Question 13.
Wenotethatincome derived principally from landistaxed atalower ratethanbusiness income
(page 14). How is"income derived principally from land" defined?
Answer:
According toInstruction No.33approved bytheMinistry ofFinance on29January 1996,
income derived principally fromlandmeans income derived fromdirect utilization ofland(plantation
andcattle breeding). Alegalentity mayclaim alower taxrate(10%) ifover50%ofitstotalincome
isconnected withincome derived principally from land.
Question 14.
Weunderstand thatraising taxation revenue andcontrolling public expenditures areseenas
important issues fortheKazakstan Government, andnotethefourelements offiscal policy in
Kazakstan (page 15). Could Kazakstan elaborate onthepolicy measures thatarelikely tobe
adopted inthefuture toaddress eachoftheelements offiscal policy?
Answer:
Asmentioned inWT/ACC/KAZ/3, thefiscal policy ofthegovernment willconcentrate on
fourelements. Abriefdiscussion ofgovernment measures toaddress these fourelements isprovided
below:
i.Raising taxrevenues viastrengthened taxadministration:
Several initiatives arebeing undertaken:
- small enterprises likekiosks arebeing taxed through the"patent" method (aform of
presumptive taxation);WT/ACC/KAZ/6/Add.1
Page9
- theuseofcashregisters with"fiscal memory" isbeing mandated toreduce fraud;
- amore aggressive setofprocedures tocollect taxarrears isbeing instituted;
- anon-filer, stop-filer identification program isunder way;
- newtaxforms andinstructions fortheVAT andcorporate income taxarebeing developed.
ii.Improving thestructure andmanagement ofexpenditures:
- anewbudget systems lawwaspassed byParliament inDecember 1996. Thissignificantly
rationalizes allaspects ofthebudget process;
- amodern treasury system isbeing introduced;
- amodern budget classification system hasbeenintroduced.
iii. Overhauling thesocial safety net:
ALaw"Onobligatory Social Insurance" of18July1996 wasadopted, which determines
thelegal, organizational andeconomic basis ofsocial protection ofcitizens, guaranteed bythestate
andimplemented atthecostofobligatory social security insurance funds forthefollowing types of
social guarantee:
- retirement coverage;
- temporary disability allowance (including disability duetoemployee injury orprofessional
diseases);
- maternity allowance;
- health improving services;
- social support incaseofunemployment;
- obligatory medical insurance;
- birthallowance;
- burial allowance.
iv. Continuing theprocess ofdivestiture ofenterprises 'social assets:
Anaggressive process ofsocial assetdivestiture ismoving forward. Thisisaccomplished through
privatization, conversion programs, andcontract management. Divestiture istobecompleted around
theendof1998.
III. FRAMEWORKFORMAKINGANDENFORCINGPOLICIESAFFECTINGFOREIGN
TRADE INGOODS AND TRADE INSERVICES
III.3 Division ofAuthority between Central andSub-Central Governments
Question 15.
Kazakstan states thatGovernment powers affecting foreign trade aredevolved from national to
local authorities inaccordance with sixprinciples (page 22). What power does thecentral
Government have toensure thatsub-national governments areinaccordance withKazakstan 's
commitments under treaties?
Answer:
TheConstitution oftheRepublic ofKazakstan provides thatobligations undertaken pursuant
toaratified self-executing international agreement shall havepriority overitslawsandsublaws.
Accordingly, thedecisions ofAkims (therepresentative oftheExecutive atthesub-national level) or
ofMaslikhats (local representative bodies) which mayderogate fromKazakstan 'scommitments pursuant
tointernational agreements maybeannulled bythePresident, theGovernment, aSenior Akim, aswell
asthrough courtprocedures. Inaddition, theGeneral Prosecutor 'sOffice exercises constant supervision
overtheexact anduniform application oflawsandsublaws.WT/ACC/KAZ/6/Add.1
Page10
Question 16.
Could Kazakstan provide anassurance thattheapplication oftheprinciples mentioned onpage 22
willnotimpede itsability tomeet theobligations itwillassume under theWTO Agreement as
afuture WTO member?
Answer:
TheRepublic ofKazakstan, asaunitary State, willadhere toalloftheobligations undertaken
inthecontext oftheforthcoming negotiations.
IV POLICIES AFFECTING TRADE INGOODS
IV.1 Import Regulation
IV.1(b) Characteristics ofnational tariff andnomenclature
Question 17.
Could Kazakstan explain thenature ofthestructural andcoding differences between thetariff
nomenclature ofKazakstan andHarmonised System (page 25)?
Answer:
Kazakstan intends toadopt fullytheHarmonized System inApril 1997. Accordingly, any
structural orcoding differences thatmaynowexistbetween HS96andKazakstan 'stariffnomenclature
willhavebeeneliminated bythattime.
Question 18.
When willtheHS96changes beincorporated intoKazakstan 'stariff nomenclature? Willthis
occur prior tomarket access negotiations inthecontext ofKazakstan 'saccession?
Answer:
Kazakstan intends toincorporate HS96byApril 1997 prior tomarket access negotiations
inthecontext ofKazakstan 'saccession.
IV.1(c) Tariff quotas andtariff exemptions
Question 19.
Wenotethattheweighted-average tariff forChapter 22(beverages, spirits andvinegar) isaround
185percent(table A1.35, page77).What isthereason forrates ofimport dutywhich arevery
highcompared torates applied inother sectors?
Answer:
Thepurpose ofhighratesforChapter 22isrevenue generation.
Question 20.
Does Kazakstan have anyintentions ofachieving itssocial andrevenue objectives inthissector
through increased internal taxation accompanied byareduction inthetariff applied toimports?
Answer:
Kazakstan hasnointention toincrease internal taxation inthissector.WT/ACC/KAZ/6/Add.1
Page11
Question 21.
Wewelcome Kazakstan 'sstatement thatthere arenotariff quotas (page 25). CanKazakstan
provide anassurance thatitwillnotseektointroduce tariff quotas inthefuture?
Answer:
No.Kazakstan mayintroduce tariff quotas inthefuture. Such quotas willbeapplied in
conformity withArticle XIIIofGATT.
IV.1(d) Other duties andcharges, specifying anycharges forservices rendered
Customs processing feesandother customs services
Question 22.
Wenotethatcustoms levies forcustoms processing areimposed atanadvalorem rate(page 26).
Thisisinconsistent withArticle VIIIoftheGATT 1994. When willthestructure ofKazakstan 's
customs levies forcustoms processing berevised toreflect theapproximate costofservices
rendered?
Answer:
During accession totheWTO, Kazakstan willbring itsCustoms Processing Feein
linewithArticle VIIIofGATT 1994. Feesandcharges related toimportation willbechanged toreflect
thecostofservices rendered. Either afixedfeeoranadvalorem feewithaceiling willbeestablished.
Value added tax(VAT)
Question 23.
Wenotethatimported goods which areexempt from VAT include "goods purchased atbudget
expenses andimported byorganization supported attheexpenses ofstatebudget aswellasgoods
imported under foreign credit linesthatareguaranteed bytheState" (page 27).Could Kazakstan
explain thepurpose ofthisexemption andprovide alistoftheorganizations covered bythis
exemption?
Answer:
Thepurpose ofthisexemption istoreduce payments frombudget forimported goods atbudget
expense orunder foreign credit linesthatareguaranteed bytheState.
There isnolistoforganizations covered bythisexemption. Organizations seeking such
exemption mustprovide evidence tocustoms indicating thatimported goods arepurchased atbudget
expense orunder foreign credit linesthatareguaranteed bytheState.
Question 24.
What percentage ofKazakstan 'stotalimports arecovered bythisexemption?
Answer:
Itisestimated thatnomore than3%oftotalimports arecovered under thisexemption.
Question 25.
Wealsonotethatimported goods which areexempt from VAT include "goods imported bynatural
persons according totherateoffreeimport dutystipulated bytheGovernment" (page 27).What
percentage ofKazakstan 'stotalimports arecovered bythisexemption?WT/ACC/KAZ/6/Add.1
Page12
Answer:
Such statistical information isnotcollected.
Question 26.
Could Kazakstan provide details ofthisexemption? How would natural persons qualify forthis
exemption? Which natural persons would beeligible?
Answer:
Government Resolution No.1748 of31December 1996 liststhegoods andtheratesunder
which natural persons areexempted from paying VAT andExcise Taxes.
Code ofCommodity
NomenclatureName ofGoods towhich
exemption appliesRate ofimport
(peroneperson)
1. From 0301, 0302, 0303,
0304, 0305, 1604Sturgeon andsalmon, theirroe,and
delicacies made therefrom3kg.(netweight)
2. 2203.00 Beer 5litres
3. From 2204 (except 2204
30),2205, 2206, 2207,
2208, 2905Wine, Wine-making ingredients,
Champagne, Cognac, Allalcohol,
Fortified drinks, juices andbalsam,
Vodka, Liqueurs andvodka
products5litres
4. 2402 Tobacco products andother
products containing tobacco1000 units
(cigarettes)
5. From 271000330,
271000350Gasoline (other thanaviation
gasoline)100litres
6. From 271000610,
271000650, 271000690Diesel fuel 150litres
7. From 420310000 Clothing made ofnatural leather 3items (set)
8. From 4301, 4302, 4303,
650692000Cured andnon-cured furskins
(except mole, rabbit, dog,deer,
sheep skins), Wearing apparel made
ofnatural fur,including coats, short
coats, jackets, andmantles (except
apparel made offurskins ofmole,
rabbit, dog,deer, sheep skins),
Overcoats, short coats, jackets and
mantles withdecoration made from
fur(except mole, rabbit, dog,deer,
sheep)items (set)
9. From 701321, 701331,
701391, 940510500Objects made ofcrystal, including
lighting appliances3set(services)
10. From 7113, 710239000,
7114, 7116Gold, platinum orsilver jewellery 5units
Anynatural person iseligible forthese exemptions through customs declaration. Per
importation orentry, thenatural person mayclaim nomore thantenexemptions (oneexemption from
eachofthe10categories listed above). There isnolimitonthefrequency ofentries orimportation.WT/ACC/KAZ/6/Add.1
Page13
Question 27.
Imported goods which areexempt from VAT include "goods originated inandimported from
CIScountries" (page 27). Why isthisexemption provided? CanKazakstan provide adetailed
explanation ofhowVAT arrangements fortrade which CIScountries differ from arrangements
forother countries?
Answer:
With respect toCIScountries (Agreement between CISCountries onAgreed Principles of
TaxPolicy; 13March 1992), VAT applies atsource rather thandestination. Inother words, VAT
applies onimports fromCIStoKazakstan atthecountry oforigin. Kazakstan iscurrently intheprocess
ofnegotiation withother CIScountries tomake VAT applicable atdestination rather thansource.
Question 28.
Arethese arrangements consistent withWTO requirements?
Answer:
Inpractice, these arrangements donotcontradict WTO requirements. VAT applies equally
ongoods imported fromCISandnon-CIS countries. With respect toCIScountries, VAT applies at
source rather thandestination. Allgoods imported toKazakstan fromother CIScountries aresubject
toVAT inthose countries. Thedifference hereisthatKazakstan collects theVAT applied ongoods
imported fromnon-CIS countries, andother CIScountries collect theVAT applied ongoods exported
toKazakstan from those countries. Forthose CIScountries which have aVAT ratelower than
Kazakstan 'srate,Kazakstan applies thedifference inrateonimports from those countries.
Excise taxes
Question 29.
Werefer totheinformation provided ontheproduct coverage ofKazakstan 'sexcise taxes (pages
27-29), andnotethatthere aredifferent government resolutions relating toexcise onimported
goods andexcise ongoods produced inKazakstan. Dotheprovisions ofthese government
resolutions differ onlyinrespect oftherates ofexcise dutyaccording toplace oforigin ofthe
products concerned? Wewould begrateful fordetails ofanyother difference, including therational
forthem.
Answer:
Thedifference isonlyinrespect totheratesofexcise dutyaccording toplace oforigin of
theproducts concerned. There isnoother difference.
Question 30.
Wenotethatsome excisable imported goods attract aconsiderably higher rateofexcise taxthan
domestically-produced likeproducts (table 4.2).When willKazakstan bring itsexcise taxes into
fullconformity withArticle IIIoftheGATT 1994?
Answer:
During accession totheWTO, Kazakstan willwork toward bringing itsexcise taxsystem
inlinewiththenational treatment principle ofWTO.
Question 31.
Does Kazakstan have anyplans toassemble passenger automobiles orlorries withacarrying
capacity under 1.25tons? Ifso,willnational treatment oninternal taxation andregulation be
provided?WT/ACC/KAZ/6/Add.1
Page14
Answer:
Anyforeign ordomestic investor hastheright andiswelcome toestablish abusiness in
Kazakstan forassembling automobiles orlorries. Inthiscase, national treatment oninternal taxation
andregulation willbeprovided.
Question 32.
Werefer totheexcise taxexemptions listed onpages 27-28 oftheMemorandum. Does Kazakstan
haveanyplans toremove excise taxexemptions thatdiscriminate infavour ofgoods originating
inandimported from theCIS?
Answer:
Inpractice, thereisnodiscrimination withregard toexcise taxesinfavour ofgoods originating
andimported from CIS. Excise Taxes applies equally ongoods imported from CISandnon-CIS
countries. Withrespect toCIScountries, Excise Taxes applies atsource rather thandestination. All
goods imported toKazakstan fromother CIScountries aresubject toExcise Taxes inthose countries.
Thedifference hereisthatKazakstan collects theExcise Taxes applied ongoods imported fromnon-CIS
countries andother CIScountries collect theExcise Taxes applied ongoods exported toKazakstan
from those countries.
Kazakstan iscurrently intheprocess ofnegotiation withother CIScountries tomake Excise
Taxes applicable atdestination rather thansource.
Question 33.
Thedescription ofthiscategory ofexcise taxexemption seems toimply thatallgoods originating
inandimported from theCISarefreefrom excise tax,while many domestically produced like
products aresubject toexcise. Does table 4.2provide acomplete listofthedomestically produced
goods affected inthisway? Areallofthegoods listed inthetable 4.2affected inthisway?
Answer:
Theanswer tobothquestions isYes. Also, please seeresponse toprevious question.
Table 4.2wasupdated toreflect recent changes inexcise taxes. Please notetheanswer to
question IV.15 oftheECQuestions concerning WT/ACC/KAZ/3.
Question 34.
Iseligibility foralicense toproduce liqueurs, vodka products, fortified drinks andjuice, wine
orbalsam inKazakstan based onnationality? Ifso,wewould begrateful fordetails ofnationality
restrictions andanyother restrictions?
Answer:
EligibilityisnotbasedonnationalityaccordingtoArticle1ofGosStandardGuidingDocument
RD50RK16-1995.
Question 35.
Could Kazakstan provide details ofthelegalobligations oflicensed producers ofliqueurs, vodka
products, fortified drinks andjuice, wine orbalsam relating tothepurchase offoreign inputs
fortheir activities?
Answer:
There arenocurrent legalobligations forlicensed producers ofliqueurs, vodka products,
fortified drinks andjuice, wineorbalsam relating tothepurchase offoreign inputs fortheiractivities.WT/ACC/KAZ/6/Add.1
Page15
IV.1(e) Quantitative import restrictions, including prohibitions, quotas andlicensing systems
Question 36.
Could Kazakstan provide alistdetailing theproducts currently subject toquantitative import
restrictions, adescription ofthemeasures applied ineachcase, together withreasons andWTO
justification (page 29).
Answer:
AsexplainedinWT/ACC/KAZ/3,Kazakstandoesnothaveanyimportquotas.Importlicenses,
however, arerequired forcertain goods. Table A3.1 andTable A3.2 ofAnnex 3ofWT/ACC/KAZ/3
provided thelistsofgoods subject toimport licensing. Please note, however, thatthese licenses are
notlinked toanyquotas.
Also, please notethatTable A9.1 ofWT/ACC/KAZ/3 needs tobeamended toinclude the
following itemaccording toGovernment Resolution No712ofJune6,1996.
Name ofGoods Code ofCommodity NomenclatureTheministries
and
Departments
whose Prior
Approval is
Required
Special technical devices
intended forperformance of
special operative and
investigation efforts, devices
forprotection ofinformation,
other devices ofdouble
application (including parts
thereto, software), instructive
andtechnical documentation
relating tospecial technical
devices (including bothdesign
andmaintenance)8301, 8517, 8518, 8520, 8521, 8525,
8526, 8527, 8528, 8531, 9013, 9022
(only special technical devices, devices
forprotection ofinformation andother
devices ofdouble destiny) 8529, 8543
(only forspecial technical devices)Committee for
National
Security
IV.1(h) Customs valuation
Question 37.
Kazakstan states thatcustoms valuation islargely based ontheWTO Customs Valuation
Agreement. Thisseems toimply thatthere aresome deviations from WTO requirements. Can
Kazakstan describe anydeviations?
Answer:
Although thevaluation provisions ofKazakstan 'sCustoms Code largely conform totheWTO
Agreement onCustoms Valuation, there aresome discrepancies andomissions, which aredescribed
below. In1997, Kazakstan willamend itsCustoms Code tobring itfullyintoconformance withthe
WTO Valuation Agreement.
i. TheCustoms Code defines arelated-party toinclude onethathasmore thana20%percent
ownership share intheother party. Article 15(4)(d) oftheWTO Valuation Agreement defines arelated
party toinclude onewhoholds a5%orgreater share intheother party. Inaddition, theWTOWT/ACC/KAZ/6/Add.1
Page16
ValuationAgreementstatementthatarelatedpartyincludes"officerordirectorofoneanother'sbusiness"
doesnotappear intheCustoms Code.
ii. TheCustoms Code defines "transaction value" astheprice paidorpayable forimported
merchandise "atthemoment oftheircrossing ofthecustoms boundary oftheRepublic ofKazakstan."
Thisisnotconsistent withtheWTO Valuation Agreement, which defines transaction value astheprice
paidorpayable fortheimported merchandise "when soldforexport."
iii. TheCustoms Code doesnotinclude certain oftheWTO Valuation Agreement provisions
onrelated-party prices. Specifically, itdoesnotinclude thetwotestssetoutinArticle 1(2)oftheValue
Code todetermine whether arelated-party price maybeusedasabasis forappraisement (theuse
of"testvalues" andevidence ofthecircumstances ofsale).
iv. Article 129oftheCustoms Code, which defines transaction value ofidentical goods, limits
Customs 'consideration toexports ofidentical goods made within 90daysprior totheimportation of
thegoods under valuation, alimitation thatisnotfound intheWTO Valuation Agreement.
v. Inthecalculation ofdeductive value, theWTO Valuation Agreement, Article 5,requires
thecustoms authorities toconsider firstthose sales made atorabout thetimethegoods under
appraisement areimported and,onlyifnosuchsalesarefound, consider salesmade within 90days
oftheimportation. TheCustoms Code doesnotmake thisdistinction, butdirects Customs toconsider
allsalesmade within the90-day period inthefirstinstance.
vi. Article 2oftheWTO Valuation Agreement provides thatwhere thetransportation-related
costsandcharges described byparagraph 2ofArticle 8areincluded inthetransaction value ofidentical
orsimilar goods, anadjustment shallbemade totakeaccount ofsignificant differences insuchcosts
andcharges between theimported goods andtheidentical goods arising fromdifferences indistances
andmodes oftransport. TheCustoms Code provides foradjustment ofallexpenditures described in
Article 128oftheCustoms Code, which includes notjusttransportation-related charges, butassists,
royalties, commissions, andother additions toprice thataredelineated under Article 8oftheWTO
Valuation Agreement.
vii. Article 4oftheWTO Valuation Agreement provides thatanimporter -athisexclusive option-
mayelecttohavetheimported merchandise appraised under thecomputed value rather thandeductive
value, orviceversa. TheCustoms Code doesnotexpressly limitthiselection totheimporter.
viii. Article 132oftheCustoms Code provides thatacomputed value shallinclude anamount
forprofit usually derived byexporters insaleofgoods ofthesame typeasthose under valuation.
Itdoesnotinclude thelimitation required byArticle 6oftheWTO Valuation Agreement thatonly
profits ofexporters inthesame country ofexport aretobeconsidered.
ix. Asstated inKazakstan 'sMemorandum onForeign Trade Regime, Article 133oftheCustoms
Code doesnotfullydelineate theprohibitions contained inArticle 7(2)oftheWTO Customs Valuation
Agreement. Specifically, Articles 7(2)(b),(c), (d)and(f)oftheWTO Agreement onCustoms Valuation
arenotincluded intheCustoms Code.
x. Article 16oftheGATT Valuation Code requires thecustoms body toprovide awritten
explanation totheimporter upon written request "astohowcustoms value oftheimporter 'sgoods
wasdetermined." Article 126oftheKazakstan Customs Code provides instead forawritten explanation
ofthereasons whytheimporter 'sdeclared value maynotbeaccepted.WT/ACC/KAZ/6/Add.1
Page17
IV.1(j) Preshipment inspection
Question 38.
Could Kazakstan outline whyithashadrecourse topreshipment inspection? Which aspect or
aspects ofArticle 1.3oftheWTO Agreement onPreshipment Inspection arerelevant?
Answer:
On31January 1997, Prehipment Inspection waseliminated.
Question 39.
Whyhavegoods imported from CIScountries andgoods valued atnotmore than3,000 USdollars
beenexempted from preshipment inspection? How willsuchexemptions affect thefulfilment of
theobjectives ofKazakstan 'spreshipment inspection arrangement?
Answer:
Please seeanswer toquestion 38.
Question 40.
Could Kazakstan advise ofanychanges toitspreshipment inspection arrangement since its
memorandum wasproduced?
Answer:
Please seeanswer toquestion 38.
IV.1(l) Rules oforigin
Question 41.
WenotethatKazakstan hasprovided abrief outline ofitsrules oforigin (page 31).Wewould
begratefulifKazakstancoldprovidemorespecificdetailonitslegislation,regulationsandpractices
intheareaofrules oforigin.
Answer:
Therulesfordetermination oforigin ofgoods aresetoutinArticles 141to147ofKazakstan 's
CustomsCodeandthe"ResolutionoftheHeadsoftheCommonwealthofIndependentStatesConcerning
theRules forIdentifying theCountry ofOrigin ofGoods" (September 24,1993). Inaddition, the
rulesoforigin forpurposes oftheGeneralized System ofPreferences aredescribed intheagreement
among CIScountries concerning "Rules toDetermine theOrigin ofGoods ofDeveloping Countries
forGranting Tariff Benefits" (April 12,1996).
These rules arelargely based ontheprinciples ofAnnex D.1oftheKyoto Convention.
Imported goods aredeemed tooriginate inthatcountry where theyarewholly produced ormanufactured
or,where twoormore countries contribute tothemanufacture oftheimported good, thatcountry in
which thegood islastsubstantially transformed. Thefollowing goods areconsidered tohavebeen
wholly produced ormanufactured inonecountry:
i. minerals products extracted from itssoilorinterritorial waters oronitscontinental shelf;
ii. vegetable products harvested orgathered inthatcountry;
iii. liveanimals bornandraised inthatcountry;
iv. products obtained from liveanimals inthatcountry;
v. products ofhunting andfishing inthatcountry;
vi. production extracted orproduced inworld ocean byvessels ofthatcountry, orvessels leased
(chartered) bythatcountry;WT/ACC/KAZ/6/Add.1
Page18
vii. secondary rawmaterials andwaste which aretheresult ofproduction orother operations
which areperformed inthatcountry;
viii. production obtained inopencosmos onspace ships ofthatcountry orspace ships leased by
thatcountry;
ix. goods manufactured orproduced exclusively from production ofitems 1-8.
Agoodisconsidered tohaveundergone asubstantial transformation if:(1)thereisachange
inthetariff classification ofthegoodatthefour-digit levelasaresult ofthatprocessing, (2)thegood
hasundergone industrial ortechnological operations which areconsidered sufficient toconfer origin,
or(3)acertain percentage value ofthegoodmaybeattributed tothatcountry. Additional legislation
concerning rulesoforigin areintheprocess ofbegin drafted. Article 142oftheCustoms Code further
provides thatachange inorigin willnotberecognized where thegood merely undergoes oneofthe
following operations:
- operations necessary forthepreservation ofthegoods during storage ortransportation;
- operations forpreparation ofgoods forsales andtransportation (such asbreaking bulk,
grouping ofpackages, sorting, andrepacking), simple assembly operations, ormixing of
goods without changing theessential characteristics ofthegoods.
Question 42.
HowwillKazakstan administer theobligations itwillassume under theWTO Agreement onRules
ofOrigin when itaccedes totheWTO?
Answer:
Kazakstan willadminister itsobligations under theAgreement onRules ofOrigin bytaking
themeasures necessary toensure thatitsrules andpractices concerning origin ofgoods arefullyin
compliance withtheagreement.
IV.1(m) (n)(o)Anti-dumping, Countervailing Duty andSafeguards Measures
Question 43.
WenotethatKazakstan isintheprocess ofdeveloping procedural rules andimplementing
regulations intheareas ofanti-dumping, countervailing dutyandsafeguards (page 31).Wewould
begrateful ifKazakstan could provide details ofitslegislation, regulations andpractices ineach
ofthisareas.
Answer:
Kazakstan hassofarnotimposed anti-dumping, countervailing, orsafeguard duties.
TheCustoms Code of20July1995 iscurrently theonly legislation which refers to
anti-dumping regime (Article 115), countervailing regime (Article 116) andSafeguard regime
Article 114). Noprocedural rules orimplementing regulations havebeendeveloped.
Please notethatKazakstan iscurrently intheprocess ofdrafting alaw"OnAnti-Dumping
Measures", alaw"OnCountervailing Measures" andalaw"OnSafeguard Measures". These three
lawswillconform totheWTO rulesandwillbetheonlylawsgoverning anti-dumping, countervailing,
andsafeguard regime inKazakstan. These lawsareexpected tobesubmitted totheParliament in1997.
Question 44.
What time-frames areenvisaged forthedevelopment ofprocedural rules andimplementing
regulations ineachofthisareas?WT/ACC/KAZ/6/Add.1
Page19
Answer:
Anynecessary procedural rules andimplementing regulations willbeelaborated afterthe
lawsaresubmitted totheParliament.
Question 45.
Could Kazakstan supply details ofhowitsregulations andprocedures intheareas ofanti-dumping,
countervailing dutyandsafeguards willapply toimports from itsfree-trade areaandcustoms
union partners?
Answer:
Currently, therearenoregulations andprocedures inplaceaddressing thisissue. Regulations
andprocedures willbeelaborated afterthethreelawsondumping, countervailing, andsafeguards are
submitted totheParliament.
IV.2. Export Regulation
IV.2(d) Export licensing procedures
Question 46.
Could Kazakstan provide anexplanation ofthecriteria thatareusedtodecide whether ornot
toissue anexport license (page 32).
Answer:
Thefollowing documents arerequired fortheissuance oflicense:
- application;
- fee;
- contract between buyer andseller;
- certificate oforigin;
- certificate ofquality;
- approval oftheMinistry concerned withthegoods inaccordance withTable A9.1 of
WT/ACC/KAZ/3; and
- permission from thegovernment forcertain goods according toTable A9.2 of
WT/ACC/KAZ/3.
Anapplication mayberejected under oneofthefollowing conditions:
- incomplete application package (oneoftheabove listed documents missing);
- unpaid license fee;and
- adocument intheapplication package contradicting acting legislation.
Question 47.
TheMemorandum states thattheMinistry ofTrade hasprimary responsibility fortheissuance
oflicenses; however, theMinistry primarily concerned withthegoods inquestion must approve
theissuance ofthelicense (page 32).IstheroleoftheMinistry ofTrade intheissuance ofexport
licenses restricted onlytoacting asaconduit between theapplicant andministries other than
theMinistry ofTrade? Thatistosay,doestheMinistry ofTrade lackpower todetermine whether
togrant orrefuse anapproval foranexport license?
Answer:
TheMinistry ofIndustry andTrade willnotissue anexport license without theapproval
oftheMinistry concerned withthegood inquestion.WT/ACC/KAZ/6/Add.1
Page20
Despite theapproval oftheMinistry concerned withthegood inquestion, theMinistry of
Industry andtrade maystillrefuse togrant anexport license onthegrounds listed under theanswer
tothepreceding question.
IV.2(e) Other measures, e.g.minimum export prices, voluntary export restrictions, orderly
marketing arrangements
Question 48.
Could Kazakstan explain whyitimposes minimum export prices oncertain basic products
(page 32)?
Answer:
Government Resolution No.1492of5December 1996 eliminated minimum export prices.
Question 49.
Areminimum export prices anindirect means ofregulating export quantities? Ifso,what body
isresponsible forimplementing policy inthisarea? Ifnot,whatareminimum export prices related
to?
Answer:
Please seetheanswer tothepreceding question.
Question 50.
Wenotethatexport contracts forarange ofproducts needtoberegistered (page 33and158-159).
Wewould begrateful forinformation onwhyexport contracts above thestipulated quantities
need toberegistered. Isthismeasure forstatistical purposes ortocontrol exports?
Answer:
Inaddition tostatistical purposes, thepurpose ofregistering export contract onacommodity
exchange istoprevent theexport atdumping prices ofproducts listed inTable A9.3 ofAnnex 9of
WT/ACC/KAZ/3.
PleasenotethatTableA9.3ofAnnex9needstobeamended.GovernmentResolutionNo.895
of12July1996 removed "crude oil--including gascondensate --"(2709) from thelistofproducts
subject toexport contract registration. Inaddition, "Guts, bladders andstomachs ofsheep" (05400000)
and"cotton linters" (140420000) needtobeadded toTable A9.3.
Asaresult oftheaforementioned amendments, approximately 11%(instead ofapproximately
26%previously) oftotalvalue ofexport (based on1995export date)issubject tocontract registration.
Thestipulated quantities inTable A9.3 ofWT/ACC/KAZ/3 above which acontract must
beregistered arebased ontheusual minimum sizeofexport consignment.WT/ACC/KAZ/6/Add.1
Page21
IV.3. Internal Policy Affecting Foreign Trade inGoods
IV.3(a) Industrial policy, including subsidy policies
Agricultural subsidies
Question 51.
WenotethatKazakstan grants agricultural subsidies (page 33-34 andAnnex 11).Could Kazakstan
elaborate onhowthese subsidies aredelivered? Aretheyintheform ofprice support orissupport
linked toproduction?
Answer:
Subsidies aregranted through theAgriculture Support Fund (ASF), established inDecember
1994. Themaingoalofproviding subsidies toagricultural production through thisASFistoincrease
efficiency ofagricultural activities bymeans ofstimulating entities tousenewequipment, technologies,
purchasing ofpedigree cattle, usage ofhighgrade seeds, mineral fertilizer andmeans toprotect plants.
Subsidies arenotintheform ofprice support.
In1996, theASFallocated resources toagricultural entities according tothefollowing:
- 50%ofvalue ofusedmineral fertilizer forcrops ofintensive typeandseeds plotsofgrain
crops;
- 40-60% ofvalue ofusedplant protection means (e.g.herbicides);
- certain subsidies topayforusedfuelandmixed fodder, andmeasures toimprove health of
cattle;
- certain subsidies foradopting newtechnologies andtraining onusage ofnewequipment;
and
- afixed amount ofsubsidy foreachtonofproduction ofhighgrade seeds, pedigree cattle,
highquality wool andastrakhan, andlamb meat.
Theallocation ofsubsidies isprovided through Oblast branches ofASFwhich alsoperforms
control overear-marked usage ofallocated subsidies.
Question 52.
Inthisperiod oftransition toamarket economy, doesKazakstan envisage anongoing rolefor
these subsidies orwillagricultural production andprice bedetermined bythemarket?
Answer:
Currently, agricultural prices andproduction aredetermined bythemarket withexception
ofsubsidies connected withtheproduction ofhighgrade seeds, pedigree cattle, highquality wooland
astrakhan, andlamb meat (seeprevious answer). During transition tomarket economy, Kazakstan
envisages maintaining suchsubsidies.
Question 53.
With regard subsidies fortransport ofagricultural andfoodproducts, doesthesame subsidies
apply toalllocalproduction? Dogoods bound forexport alsoqualify forasubsidy forthedomestic
freight component
Answer:
Preferential tariff ratesfortransportation ofcoalandagriculture andfoodproducts byrail
wereeliminated on1January 1997according toResolution No.7/126 oftheStateCommittee onPricing
andAnti-Monopoly Policy dated 25December 1996.WT/ACC/KAZ/6/Add.1
Page22
Question 54.
Werefer tothetables ofagricultural subsidies atAnnex 11.What isthefunction andpurpose
oftheState Food Contractual Corporation (asperreporting period 1994 and1995)?
Answer:
TheState Food Contractual Corporation (SFCC) wasestablished inaccordance with
Government Resolution No.309of21March 1995andGovernment Resolution No.549of25April
1995. SFCC hasthefollowing functions:
i. State customer forcentralized grain procurement forstateresources;
ii. allocation oftheorders forgrain procurement forstate needs among procurement
organizations;
iii. organization ofprocurement andcontrol overgrain shipment tothestateresources;
iv. organization oftheutilization ofstateresources grain, realization ofcounting andcontrol
overitsmovement;
v. determination ofneeds infinancial means directed forprocurement ofvolume ofgrain,
establishedbytheGovernmentoftheRepublicofKazakstan,forstateresourcesandrealization
ofpayments ofcredit debts, involved forfinancing mentioned operations; and
vi. borrower ofcredits intheorder established bylegislation.
SFCC doesnothaveadominant position inthetradeofgrain inKazakstan. Itsmarket share
isapproximately 9%.
Question 55.
Wewould begrateful forfurther information about stateprocured grain forthepurpose ofpublic
stockholding forfoodsecurity purposes, including how, andunder what conditions, suchgrain
isdistributed, andwhether thetransactions areonacommercial basis.
Answer:
Stateprocurement ofgrain isconducted bySFCC according tomarket prices atCommodity
Exchanges ordirect contracts withgrain producers. State procured grain ismainly usedforstate
reserves. Apartofitissoldtoanumber ofbudget-financed organizations suchastheMinistry of
Defense andtheMinistry ofInternal Affairs according toprices agreed upon withtheMinistry of
Finance.
Disposition ofgrain forthepurpose ofstock renewal isconducted viasaleoncommercial
basis bySFCC atCommodity Exchanges ordirect contracts.
Question 56.
Whyhave"plant protection", fertilizers andfuelbeenlisted under product-specific support rather
thannon-product specific support, given thattheyarenotbasic products?
Answer:
TheASFallocates certain subsidies (asdescribed inAnnex 11ofWT/ACC/KAZ/3) tothose
producers whouseplant protection means, fertilizers, andfuelfortheproduction ofcertain types of
agricultural products (e.g.high-quality seeds, pedigree cattle). These subsidies areprovided actually
totheproducers ofbasicagricultural goods. Therefore, itwasdecided toinclude suchsubsidies under
product-specific support.
Question 57.
How hasKazakstan determined therateofexchange between theTenge andtheUSdollar?WT/ACC/KAZ/6/Add.1
Page23
Answer:
Therateofexchange between theTenge andtheUSdollar isdetermined asresult ofdaily
currency auctions heldattheKazak Interbank Currency andStock Exchange.
Conversion ratesbetween Tenge andUSD usedinAnnex 11areaverage annual rates.
Question 58.
CanKazakstan explain whyithasincluded plant protection, fertilizers andfuelasproduct-specific
support insupporting table DS:4 when these arenotbasic products?
Answer:
TheASFallocates certain subsidies (asdescribed inAnnex 11ofWT/ACC/KAZ/3) tothose
producers whouseplant protection means, fertilizers, andfuelfortheproduction ofcertain types of
agricultural products (e.g.high-quality seeds, pedigree cattle). These subsidies areprovided actually
totheproducers ofbasicagricultural goods. Therefore, itwasdecided toinclude suchsubsidies under
product-specific support.
Non-agricultural subsidies
Question 59.
Wewould appreciate more information onsubsidies intheform ofpreferential rates forthe
transportation ofcoalandagricultural andfoodproducts byrail(pages 34and35).Why have
these subsidies been introduced?
Answer:
Preferential tariff ratesfortransportation ofcoalandagriculture andfoodproducts byrail
wereeliminated on1January 1997according toResolution No.7/126 oftheStateCommittee onPricing
andAnti-Monopoly Policy dated 25December 1996.
Question 60.
What areKazakstan 'splans forthese subsidies?
Answer:
Please seeanswer toprevious question.
Question 61.
Isaccess topreferential railtransportation rates available onlyonthebasis ofthetypeofproducts
being transported (viz.Coal andagricultural andfoodproducts) andonlyavailable todomestic
(notimported) products?
Answer:
Please seeanswer toprevious question.
Question 62.
What plans doesKazakstan have fortheexport subsidies which arecurrently maintained for
non-agricultural products? What arethespecific products towhich these subsidies apply?
Answer:
Kazakstan doesnotplantoeliminate export subsidies upon accession totheWTO. But
Kazakstan plans togradually eliminate suchsubsidies inaccordance withArticle 29oftheSubsidies
andCountervailing Measures Agreement.WT/ACC/KAZ/6/Add.1
Page24
Export subsidies fornon-agricultural products apply forlightindustry andcoal.
IV.3(b) (c) Technicalregulationsandstandards/Sanitaryandphytosanitarymeasures,including
measures taken attheborder withrespect toimports
Question 63.
Could Kazakstan advise theprocess andrequirements forforeign certification bodies tosecure
accreditation toissue certificates?
Answer:
Foreign andnational certification bodies aresubject tothesame process andrequirements
tosecure accreditation toissue certificates.
Accreditation ofacertification bodyisanofficial recognition byGosStandard thatsuchbody
isauthorized tocarry outcertification ofaproduct forcorrespondence totherequirements ofspecific
standards andother normative documents. Accreditation means delegation byGosStandard ofits
functions andrights forcertification toacertification body. Accreditation ofcertification bodies is
carried outbytheAccreditation Commission ofGosStandard.
Accreditation ofcertification bodies envisages thefollowing stages:
- submission andexpertise ofapplication documents;
- appointment ofacommission oninspection ofapplicant entity;
- inspection ofapplicant entity;
- expertise ofthematerials ofinspection ofapplicant entity; and
- preparation andissuance oftheaccreditation documents.
Thecertification body should meetthefollowing criteria:
- independence ofcertification body;
- organizational structure providing forimplementation ofcertification tasks;
- availability ofafundofnormative andtechnical documentation onthequality systems,
production andtesting methods according towhich certification iscarried outorconfirmed
access tosuchfund; (seenextparagraph)
- availability ofaccredited testing labs(centres) thatarepartofthestructure ofthecertification
body orinteract withitoncontractual basis;
- availability ofskilled andspecially trained andattested personnel; and
- ability todemonstrate itscapacities inrendering services initsdeclared fieldofcertification
onadequate levelaccording torequirements ofGosStandard.
Thefollowing arerecommended documents thatacertification body must have:
- international, interstate andnational foreign countries normative documents determining
requirements tospecific kinds ofproduction, processes, services;
- internationalstandardsISO(9000-9004),ISO8402,EN45000andotherdocumentsconcerning
quality systems;
- interstate andnational standards inthefieldofcertification; and
- guidelines ofISO/IEC inthefieldofcertification.
Please notethatthefollowing foreign firms havebeenaccredited byGosStandard toissue
certificates: GasdeFrance (France), Mertcontrol (Hungary), Société Générale deSurveillance
(Switzerland), andTurkish Institute ofStandards (Turkey).WT/ACC/KAZ/6/Add.1
Page25
Question 64.
Does Kazakstan envisage thatitwillbeabletofully implement andadminister theobligations
thatitwillassume under theWTO Agreements onTechnical Barriers toTrade andonSanitary
andPhytosanitary Measures asfrom thedatethatitaccedes totheWTO?
Answer:
Kazakstan envisages thatitwillbeabletofullyimplement andadminister theobligations
thatitwillassume under theWTO Agreement onTBT. Kazakstan hasjoined ISOandInternational
Organization ofLegislative Metrology (IOLM) andtakes intoaccount International standards in
developingandrevisingitsstandards.Reference-InformationFund("InquiryPoint")hasbeenestablished
anditsfunctions areconnected withtheobligations ofaccession totheWTO. Kazakstan plans toreview
(andamend ifneeded) during accession itslegalregime concerning standards andtheoperations of
existing inquiry point andconsultation agency toensure fullconformity toWTO agreement onTBT.
Kazakstan anticipates difficulties inapplying theSPSAgreement infullonaccession and
willneed anadjustment period tobring domestic rules andsanitary-hygiene norms inlinewith
international standards.
IV.3(d) Trade-related investment measures
Question 65.
Wewould begrateful formore detailed information ontheexceptions toKazakstan 'spolicy of
notimposing local content requirements ortrade balancing requirements (page 37). What
products/activities facelocal content requirements ortrade balancing requirements?
Answer:
There arenoproducts/activities which facetrade balancing requirements.
Local content requirements areonlystipulated bytheLawonSubsurface Utilization andthe
LawonOil. Bothlawsrequire investors inthemining, gas,andoilsectors togivepreferences to
Kazakstani goods andequipment iftheyarecompetitive interms ofecological andtechnological
characteristics, price, operating parameters, andsupply conditions.
Question 66.
What isthenature oftherequirement imposed oneachproduct andactivity?
Answer:
TheLawonSubsurface Utilization andtheLawonOilrequire investors intheoil,gas,and
mining sectors togivepreferences toKazakstani goods andequipment. However, noimplementing
regulationshaveyetbeenenacteddetailingthenatureofsuchrequirementorthemechanismforenforcing
it.
Question 67.
Arethese requirements consistent withArticle IIIofGATT 1994 andtheTRIMS Agreement?
Answer:
No.
Therequirements concerning preferences forlocalproducts intheLawonOilandtheLaw
onSubsurfaceUtilizationarenotconsistentwithArticleIII:4ofGATT1994whichrequiresthatimported
products "shall beaccorded treatment nolessfavourable thanthataccorded tolikeproducts ofnationalWT/ACC/KAZ/6/Add.1
Page26
origin inrespect ofalllaws, regulations andrequirements affecting theirinternal sale,offering for
sale,purchase, transportation, distribution, oruse".
Therequirements intheLawonOilandtheLawonSubsurface Utilization arealsocontrary
toprovisions ofparagraph 1:coftheAnnex totheTRIMs Agreement thatprohibits measures that
"require thepurchase orusebyanenterprise ofproducts ofdomestic origin orfrom anydomestic
source, whether specified interms ofparticular products, interms ofvolume orvalue ofproducts,
orinterms ofaproportion ofvolume orvalue ofitslocalproduction".
IV.3(j) Government-mandated counter-trade andbarter
Question 68.
How significant arecounter-trade andbarter arrangements with CIScountries relative to
Kazakstan 'stotaltrade?
Answer:
Counter-trade andbarter arrangements withCIScountries relative toKazakstan 'stotaltrade
isapproximately 5.7%.
Question 69.
Does Kazakstan have anyplans tophase outbarter andcounter-trade withCIScountries?
Answer:
Kazakstan doesnothaveanyplans tophase outinthenearfuture barter andcounter-trade
withCIScountries. Please notethatbarter andcounter-trade withCIScountries arenotmandated
bythegovernment.
IV.3(l) Government procurement practices
Question 70.
Wenotetheabsence ofalawongovernment procurement (page 39). Could Kazakstan advise
whether thegovernment procurement law,when enacted, willdiffer significantly fromGovernment
Resolution No.586?
Answer:
Kazakstan iscurrently intheprocess ofdrafting agovernment procurement lawbased on
UNCITRALmodelgovernmentprocurementlaw.ThenewlawwilldiffersignificantlyfromGovernment
Resolution No.586.
Question 71.
When willthelawbeenacted?
Answer:
Thislawisexpected tobesubmitted totheParliament in1997.
IV.4 Policies Affecting Foreign Agricultural Products
Question 72.
Could Kazakstan explain whyitimposes anexport tariff onwheat, andwhether there areany
plans tochange thepresent arrangements (page 41)?WT/ACC/KAZ/6/Add.1
Page27
Answer:
Theexport duties applied towheat otherthandurum wheat wereeliminated on1August 1996
(Government Resolution No.299of12March 1996).
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
Question 73.
Weunderstand thatKazakstan hasnotbecome party tosome major intellectual property
conventions, namely theBerne Convention fortheCreation ofanInternational Union forthe
Protection ofLiterary andArtistic Work, theRome Convention fortheProtection ofProducers
ofPhonogramsandBroadcastingOrganizations,theConventionfortheProtectionofNewVarieties
ofPlants (UPOV), theConvention Relating toDistribution ofProgrammer Carrying Signals
Transmitted bySatellite, andtheBudapest Treaty ontheInternational Recognition oftheDeposit
ofMicroorganisms forthePurposes ofPatent Procedure. Howandwithin what time-frame does
Kazakstan propose toimplement itsobligations under theAgreement onTrade Related Aspects
ofIntellectual Property Rights (TRIPS)?
Answer:
TheRepublic ofKazakstan fullyintends toimplement anyandallobligations itwillundertake
asamember ofWTO and,consequently, theTRIPS Agreement. Thetime-frame forimplementing
these obligations willbeagreed tointhecontext oftheforthcoming negotiations.
Question 74.
Does Kazakstan consider thecurrent domestic legal framework tobesufficient fortheadequate
andeffective protection ofintellectual property rights? How doesKazakstan propose tocover
anydeficiencies?
Answer:
Kazakstan 'sexisting legislation governing substantive intellectual property rights, wasdrafted
withaview towards itsaccession tovarious international conventions onintellectual property.
Legislation which remains tobeadopted hasalready beennoted inKazakstan 'sMemorandum onForeign
Trade Regime. Aspartofitsefforts toaccede totheWTO, Kazakstan willcontinue toreview itslegal
framework governing intellectual property rights toensure maximum compliance withanyandall
obligations agreed toinitsforthcoming negotiations.
Question 75.
What steps willKazakstan takeinregard toobligations under theTRIPS Agreement relating
toenforcement ofintellectual property rights inKazakstan?
Answer:
TheRepublic ofKazakstan fullyintends toimplement anyandallobligations itwillundertake
asamember ofWTO and,consequently, theTRIPS Agreement. Thetime-frame forimplementing
these obligations willbeagreed tointhecontext oftheforthcoming negotiations.
Question 76.
Kazakstan is,interalia,notaparty totheBerne Convention, theRome Convention onProtection
ofRights ofPerformers ortheConvention fortheProtection ofPlant Varieties? Wewould be
interested inmore detailed information onhowprotection isafforded inthese areas bypresent
Kazakstan law.WT/ACC/KAZ/6/Add.1
Page28
Answer:
TheRepublic ofKazakstan hasrecently enacted aLawConcerning Copyrights andRelated
Rights (adopted on10June1996). Allprovisions intheLawConcerning Copyrights andRelated Rights
weredrafted withaviewtowards theircompliance withtheBerne andRome Conventions. Atpresent,
there arenoprovisions intheKazak Legal system protecting plant varieties. Asnoted in
WT/ACC/KAZ/3, however, alawprotecting plantvarieties hasbeenincluded within theGovernment 's
legislative drafting agenda for1997-1998.
VI. TRADE-RELATED SERVICES REGIME
Question 77.
Wearepleased toseethat"open competition exists inevery services sector oftheeconomy"
(page 49).Welookforward toseeing acomprehensive schedule ofbinding commitments across
awiderange ofservices sectors toreflect thissituation andassure trading partners thatopenness
willcontinue. While theMemorandum contains several broad statements which arewelcome,
more information onGATS issues suchasregulatory transparency, market access andnational
treatment forforeign service providers, andMFN-consistency needs tobeprovided ona
sector-by-sector basis. Kazakstan willneedtoassemble details specifically directed tothese matters
inorder tocompile acomprehensive draft schedule ofcommitments. When doesKazakstan expect
tobeabletoprovide adraft schedule ofcommitments onservices?
Answer:
July1997.
Question 78.
Could more information beprovided ontheabove matters?
Answer:
Currently, Kazakstan makes nodistinction between domestic andforeign services andservice
suppliers except ingovernment procurement (Section IV.3.l ofWT/ACC/KAZ/3) andservices in
connection withoilandsubsurface useprovided thatKazakstani services arecompetitive interms of
price, efficiency, andquality. Additional restrictions existinthebanking andinsurance sectors as
described insection VI.3ofWT/ACC/KAZ/3. Kazakstan makes nodistinction among theservices
andservice suppliers fromvarious countries andprovides toallaregime which isnotlessfavourable
thanthatapplied totheservices andservice suppliers ofanyforeign country already operating atthe
service market ofKazakstan.
Question 79.
TheMemorandum states that"many natural monopoly sectors havebeenderegulated" (page 49).
Could Kazakstan inform uswhat ismeant bynatural monopolies inthiscaseandprovide a
complete listofsuchnatural monopoly sectors?
Answer:
Most natural monopolies inKazakstan actastransport carriers withequal open access to
allsuppliers, operators, andservice providers regardless offormandtypeofownership. Noexclusive
rights orspecial privileges aregranted tothese natural monopolies oranyofitsusers. Forexample,
anylegalentitywishingtoprovidetelephoneservicesmayusethenetworkofKazTelecomafterobtaining
theappropriate license. Natural monopoly sectors inthiscasearepower transmission anddistribution,
oilandoilproducts pipelines, communications networks, gaspipelines, andrailroads.WT/ACC/KAZ/6/Add.1
Page29
Question 80.
TheMemorandum (page 52)states thatservices maybesupplied through anyofthethree existing
types oflegal entity: statecompany, partnership (ofwhich there arefiveforms) andproduction
co-operative. Could Kazakstan clarify theownership structures which arepermitted toprovide
services? Forexample, dothey include individual persons andcompanies organized ona
shareholding basis orusing amutual structure?
Answer:
Servicesmaybesuppliedthroughanyofthethreeexistingtypesoflegalentity:statecompany,
partnership (ofwhich there arefiveforms) andproduction co-operative withfollowing ownership
structure.
i. State company. State company isacompany withstate'sshare 50% plusonestock.
ii. Partnership. Partnership isacommercial legalentity withtheCharter funddivided intoshares
(contributions) ofitsfoundation parties (participants).
a. FullLiability Partnership (FLP). Onlyindividual persons maybeparticipants ofaFLP.
Anindividual person maybeparticipant ofonlyoneFLP. InaFLP, there mustbe
notlessthan2participants.
b. Limited Liability Partnership (LLP). Participants ofaLLPmaybeindividual persons
andlegalentities, except forthebodies oftherepresentative, executive andjudicial
[branches of]power. ALLPmaybecreated byormayconsist ofoneperson inthe
caseofthatperson 'sacquisition ofalltheshares ofthecharter fundofapartnership.
Thenumber ofparticipants inaLLPshould notexceed 30persons. Otherwise, itshould
betransformed intoJSCwithin ayear.
c. Commandite Partnership. Investors inaCommandite Partnership maybeindividual
persons andlegalentities, except forthebodies oftherepresentative, executive and
judicial [branches of]power. Only individual persons maybeFullLiability partners
inaCommandite Partnership. Aindividual person maybeaFullLiability partner
inoneCommandite Partnership only.
d. Partnership withAdditional Liability. Participants ofapartnership withadditional
liability maybeindividual persons andlegal entities, except forthebodies ofthe
representative,executiveandjudicial[branchesof]power.Apartnershipwithadditional
liability maybecreated byormayconsist ofoneperson inthecaseofthatperson 's
acquisition ofalltheshares ofthecharter fundofapartnership.
e. JointStock Company (JSC). Participants ofaJSCmaybeindividual persons andlegal
entities, except forthebodies oftherepresentative, executive andjudicial [branches
of]power. AJSCmaybecreated byormayconsist ofoneperson inthecaseofthat
person 'sacquisition ofalltheshares.
iii. Production co-operative. Production co-operative isavoluntary association ofindividual
persons based onpersonal labour participation andassociation oftheircontributions (shares).
Question 81.
Regarding entities, could Kazakstan provide information onwhether foreign services providers
areallowed toestablish representative offices, branches andsubsidiaries inKazakstan? Canforeign
providers acquire local firms?
Answer:
Foreign services providers areallowed toestablish representative offices, branches and
subsidiaries inKazakstan. Foreign service providers arepermitted toacquire localfirms.WT/ACC/KAZ/6/Add.1
Page30
Exception totheabove istheinsurance sector. Foreign insurance companies areallowed
toestablish representative offices, branch, andsubsidiary butmayonlybeengaged inre-insurance
activities. Foreign insurers cannotacquire more than50%ofalocalfirm.
Inaddition, foreign banks mayestablish intheform ofrepresentative offices butmaynot
provide banking services until theyareregistered asaKazak legal entity which could be100%
foreign-owned. Banks withforeign participation maynotregister inKazakstan ifthetotalregistered
charter fundofallbanks withforeign participation exceed 25%oftheoverall registered charter fund
ofallbanks inKazakstan.
Question 82.
Businesslicensingproceduresarefundamentalimportancetoservicesproviders.TheMemorandum
(page 49)refers tothePresidential Edict onLicensing, dated 17April 1995. Wewelcome thefact
thatthisincludes astipulation thattheissuing oflicenses shall becarried outonanequal basis
foeanyperson whomeets therequirements established forthattypeoflicense. Could Kazakstan
provide more detail astothetypes ofrequirements involved insuchlicensing?
Answer:
Anapplicant foralicense mustsubmit anapplication, proof ofpayment oflicense fee,copy
ofcertificate ofregistration (ifalegalentity isapplying forlicense), anddocuments demonstrating
appropriate qualification (qualification requirements). Qualification requirements varyfromonetype
oflicense toanother. Currently, ministries responsible forissuing licenses areintheprocess of
elaborating qualifications requirements foreachtypeoflicenses.
Question 83.
Could Kazakstan confirm thatforeign orpartly-foreign applicants aretreated onanMFN basis?
Answer:
Foreign orpartly-foreign applicants forlicenses aretreated onanMFN basis.
Question 84.
TheMemorandum (page 49)alsorefers toadvantages granted tostatemonopolies intheissuing
oflicenses. Could Kazakstan provide details ofthestate monopolies which receive advantages
andthetypes ofadvantage involved?
Answer:
Article 3.1oftheLawonLicensing stipulates thatissuing oflicense shallbecarried outon
equal bases andequal terms foranypersons whomeettherequirements established forthattypeof
license. Itshallbeprohibited togrant advantages inissuing licenses tostate-owned enterprises, except
forthose types ofactivities which arereferred toasstatemonopoly inlegislative acts. Currently,
there arenolegislative actswhich provide advantages toanyentities, regardless oftypeandform of
ownership, inobtaining licenses.
Question 85.
WenotethatArticle 8ofthePresidential Edict onLicensing ensures thatnational treatment be
acceded intheareaofbusiness licensing, "unless itisotherwise stipulated byother legislative
acts". Could Kazakstan provide details ofanynational treatment ormarket access limitations
created bysuchacts?
Answer:
Currently, therearenootherlegislative actslimiting national treatment intheareaofbusiness
licensing.WT/ACC/KAZ/6/Add.1
Page31
Question 86.
Would Kazakstan, induecourse, confirm national treatment across theservices sectors by
scheduling commitments forcommercial presence?
Answer:
Thismatter istobenegotiated induecourse during thenegotiations oncommitments inthe
services area.
Financial Services
Question 87.
TheMemorandum (page 52)describes limitations onthe"total registered charter fundofallbanks
withforeign participation" (notmore than25percent). Does Kazakstan plantoliberalise this
requirement?
Answer:
There areplans tostartcancelling suchrestriction beginning 1January 1999.
Question 88.
Could Kazakstan provide information astothetransparency andcriteria under which "exceptions
oncasebycasebasis" maybegranted bythenational bank?
Answer:
Thetotalregistered charter fundofallbanks withforeign participation is12.9% oftheoverall
registered charter fundofallbanks inKazakstan asof1December 1996. Duetothefactthatsuch
figure iswaybelow thepermitted ceiling (25%), theNational Bank ofKazakstan hasnotyetdeveloped
anyadditional regulations todefine theconditions forgranting exceptions onacasebycasebasis.
Please alsonotethatKazakstan plans toliftthisrestriction beginning 1January 1999.
Question 89.
Annex 7(page 122)contains areference toarequirement forbanking service providers toobtain
permission oftheNational Bank andstateregistration attheMinistry ofJustice. Could Kazakstan
provide details ofthecriteria governing suchpermission andregistration?
Answer:
Abankmustfirstobtain apermit fromtheNational Bank ofKazakstan (NBK) andthenmust
register within onemonth fromthereceipt ofNBK'spermit attheMinistry ofJustice asalegalentity.
A. Obtaining aPermission from theNational Bank ofKazakstan
TheLaw"OnBanks andBanking Activities" of31August 1995 anditsamendments of27
January 1996 arethelegaldocuments which govern theprocess ofobtaining permit from theNBK.
Theaforementioned lawanditsamendments weresubmitted totheWTO Secretariat inAugust 1996.
Theenclosed articles (15-24) from theLaw"OnBanks andBanking Activities" discuss in
details theprocess forobtaining permission fromtheNational BankofKazakstan (NBK) andthecriteria
fordenial ofsuchpermit. Thetwofundamental articles are19and24.
Article 19.Application forIssue ofaPermit toOpen aBank
1. Anylegalentity ornatural person hastherighttoapply totheNational Bank fortheissue
ofapermit foropening abank.WT/ACC/KAZ/6/Add.1
Page32
2. Anapplication shallbesubmitted inKazakh orinRussian languages andmustcontain the
applicant 'saddress.
3. Thefollowing documents should beenclosed withanapplication fortheissue ofapermit
toopenabank:
a) theconstitutive documents ofthebanktobefounded: thefounding contract, thecharter,
theminutes ofadoption ofthecharter andtheappointment (election) ofthebankorgans;
b) information onthefounders (thelistofdataisdefined bytheNational Bank; accounting
balances ofthefounders which arelegalentities forthelasttwoaccounting dates; the
conclusion ofanauditing firm(auditor) ontheconformity ofthefinancial stateofthe
founders totherequirements ofpoint 5ofarticle 16ofthepresent Decree.
c) ifoneormore ofthefounders isnotaresident oftheRepublic ofKazakhstan: the
name andaddress ofthestateorinspection organs authorized toconfirm thefinancial
position ofthefounder;
d) inthecaseofconversion ofanon-banking financial institution intoabank: thefounding
contract, thecharter, theaccounting balance forthelastaccounting dateaconclusion
ofanauditing firm(auditor) onthefinancial state ofthenon-banking financial
institution;
e) alistofthemembers oftheSupervisory Council ofthenewly-founded bank with
indication ofthechairman andhisfirstdeputy, containing information onthenames
ofeachperson, theircitizenship andaddress, andalsoinformation confirming their
conformity totheminimum requirements established bypoint 3ofarticle 20ofthe
present Decree;
f) forthechairman oftheBoard ofManagement ofthebank being newly founded:
information indicated inpoint 3(e)ofthepresent article;
g) forother topemployees ofthenewly-founded bank: information indicated inpoint
3(e)ofthepresent article andalsoinformation onprevious jobs;
h) detailed organizational structure ofthenewly-founded bank;
i) regulation ontheinternal auditing service ofthenewly-founded bank;
j) regulation onthecredit committee ofthenewly-founded bank;
k) businessplanofthenewly-foundedbankexplainingthestrategyofitsactivity,directions
andscope ofactivity, financial perspectives (budget, accounting balance, statement
ofprofits andlosses forthefirstthree financial (operational) years, amarketing plan
(formation ofthebank'sclientele), andaplanforattracting labour resources;
l) reportonthepreparatorymeasurestakenbythefoundersinaccordancewiththebusiness
plan;
m) adocument attested bynotary orinother legal method confirming theauthority of
theapplicant forsubmitting theapplication inthename ofthefounders.
4. Theconclusion ofanauditing firm(auditor) isconsidered valid under thecondition that
documents arepresented confirming thatit(he):
- isindependent ofthefounders oftheaudited banks andtheirofficials;
- isauthorized toperform anauditcheck ofabankinaccordance withaNational Bank
license orofacompetent organ ofthestateofwhich it(he)isaresident;
5. TheNational Bank hastherighttoaskforadditional information ordocuments which are
essential formaking thedecision onissuing thepermit toopenabank.
6. Anapplication toissueapermit toopenabankmayberecalled bytheapplicant atanymoment
during itsconsideration bytheNational Bank.WT/ACC/KAZ/6/Add.1
Page33
Article 24. Denial ofaPermit toOpen aBank
1. Anapplicant maybedenied apermit toopenabankforanyofthefollowing reasons:
a) non-compliance ofthefounding documents ofthebankwiththeapplicable legislation;
b) non-conformity ofthename ofthebank totherequirements ofpoints 2-4ofarticle
15ofthepresent Decree;
c) non-conformity ofthesize,composition andstructure ofthecharter fundofthebank
totherequirements ofarticle 16ofthepresent Decree;
d) instability ofthefinancial position ofthebank'sfounders;
e) violation oftherestrictions established byarticle 17ofthepresent Decree;
f) non-conformity ofcandidates tothedirecting posts ofthebank totheminimum
requirements established inpoints 3-5ofarticle 20ofthepresent Decree;
g) non-conformity ofthefounding documents ofabankwithforeign participation tothe
norms established bypoint 1ofarticle 22ofthepresent Decree;
h) thebusiness planofthebank being founded andother documents presented bythe
applicant donotshow that:
- upon theexpiration ofthefirstthree financial (operational) years thebank's
activity willbeprofitable;
- thebankintends toadhere totherequirements forrestricting riskandform
theproper management structure;
- thebankhasanorganizational structure congruent withtheplansforitsactivity;
- thebankhasanaccounting andsupervisory structure congruent withtheplans
foritsactivity.
2. TheNational Bank mustnotify theapplicant inwriting ofthereasons fordenying apermit.
3. Theissue ofapermit toopen abank inthecaseofnon-adherence totheconditions of
articles 18and22ofthepresent Decree isforbidden.
Article 15. Name ofaBank
1. Asitscompany name, abankusesthatname which isrecorded initscharter. Nobankhas
therighttoname itself differently fromthename recorded inthecharter inanydocuments,
announcements oradverts.
2. Allbanks apartfromtheNational Bankareforbidden touseintheirname thewords "national"
or"central" infullorinabbreviated form inanylanguage.
3. Allbanks apart from stateonesareforbidden touseintheirname theword "state" infull
orinabbreviated form, inanylanguage.
4. Itisforbidden touseasaname adesignation identical orsimilar tothepoint ofconfusion
withthename ofbanks founded earlier, including banks which arenon-residents ofthe
Republic ofKazakstan. Thisbandoesnotapply toaffiliate banks intheiruseofthename
ofparent banks.
Article 16. Charter Fund ofaBank
1. Thecharter fundofabankserves asaguarantee ofitsobligations andasthemain source
ofcarrying outbanking operations. Thecharter fundofabank(with theexception ofastate
bank) isoriginally formed from thesaleofshares orthecontributions ofthefounders.WT/ACC/KAZ/6/Add.1
Page34
2. Thefounders andshareholders ofabankshallpayfortheacquired shares onlywithmoney.
3. Itisforbidden tousemeans received incredit, under mortgage andother attracted financial
resources forpayment forshares ofabank which operates intheform ofaclosed type
joint-stock company. Resources paidintothecharter fundinbreach ofthese requirements,
along withdividends accumulated, andalsoincome received byabankfrom theiruseare
exacted intotherevenue oftherepublican budget, andtheshares arereturned tothebank
fortheirfurther sale.
4. Theinitial saleofabank'sshares maybedoneonlyataprice notlower thantheirnominal
value andthesame forallfounders (shareholders).
5. Thecharter fundofanewly-founded bank announced initsfounding documents must be
paid-in byitsshareholders uptofiftypercent bythemoment ofitsregistration, andinfull
overtheduration ofonecalendar yearfrom thedayofitsregistration.
6. Anincrease tothecharter fundofabankmaytakeplace bymeans of:
a) theissue ofadditional shares, including attheexpense ofcapitalization oftheprofit
ofthebankandtheexchange ofthebank'sbonds foritsshares;
b) increasing thenominal value oftheshares.
Article 17. Founders andShareholders ofaBank
1. Founders andshareholders ofabankmaybelegalentities andnatural persons whoareboth
residents andnon-residents oftheRepublic ofKazakhstan (taking intoaccount therestrictions
setforth inarticle 18ofthepresent Decree).
2. Thestatemaybeafounder andshareholder ofabankonlyasrepresented bytheGovernment.
State enterprises andorganizations more thanfiftypercent ofwhose charter fundbelongs
tothestatemaynotbefounders andshareholders ofabank.
3. Intheperiod offounding andactivity ofthebank, noneofitsfounders (shareholders) may
directly orindirectly own, haveattheirdisposal and/or manage more than25percent of
thebank'svoting shares. Thisbandoesnotapply tothefounders (shareholders) ofstate,
interstate andparent banks.
4. Alegal entity withthestatus ofnon-resident oroff-shore company maynotbeafounder
orshare-holder ofabankwhich isaresident oftheRepublic ofKazakhstan. Thelistofzones
recognized asoff-shore shallbeestablished bytheNational Bank.
Article 18. Special Features oftheFounding ofAffiliate Banks byNon-Resident Banks ofthe
Republic ofKazakhstan
1. Banks which arenon-residents oftheRepublic ofKazakhstan having afixed rating fromone
ofthemain rating agencies maybeparent banks inrelation toanaffiliate bank. Thelistof
mainrating agencies andtherequired minimum rating isestablished bytheNational Bank.
2. Abank which isanon-resident oftheRepublic ofKazakhstan hastheright tomake an
application totheNational Bank fortheissue ofapermit foropening ofanaffiliate bank,
onlyafterarepresentation ofthegiven bankhasworked foroneyearontheterritory ofthe
Republic ofKazakhstan.WT/ACC/KAZ/6/Add.1
Page35
Article 20. Minimal Requirements tothetopofficials ofaBank
1. Recognized astopofficials ofabankarethechairman andthemembers oftheSupervisory
Council, thechairman oftheBoard ofManagement andhisdeputies, theheadaccountant
ofthebankandhisdeputies, thefirstdirector andtheheadaccountant ofabank'sbranch
andtheirdeputies.
2. Topofficials ofabankandalsocandidates recommended forappointment orelection for
suchaposition mustconform totheminimum requirements established bypoints 3-5ofthe
present article.
3. Aperson isconsidered asineligible fortheposition heldormaynotbeappointed chairman
oftheBoard ofManagement, chairman ormember oftheSupervisory Council, ifhe/she:
- hasnohigher education;
- hasaconviction uncancelled orunremoved indueprocess oflaw;
- hasinsufficient knowledge ofbanking andeconomic legislation;
- inthepastwasatopofficial ofalegalentity thatsuffered bankruptcy, orabankwhose
permit toopenthebankwasrevoked because ofthenon-fulfilment ofrequirements.
4. Other directing employees ofabankappointed (elected) topositions, apartfromconforming
totherequirements setforthinpoint 3ofthepresent article, musthavehigher orsecondary
special education corresponding totheprofile ofwork.
5. Thechairman oftheBoard ofManagement oftheBank andhisdeputies, theheadaccountant
ofthebank andhisdeputies, thefirstdirector andheadaccountant ofabank branch are
appointed (elected) totheirposts withconsent oftheNational Bank and,asarule,must
haveserved forsome length oftimeinthebanking system: thechairman andheadaccountant
-nolessthanthree years, thedeputy chairman oftheBoard ofManagement andthe
deputy-head accountant -nolessthantwoyears. Thelisted employees maynotfulfil their
duties formore thanthree months prior totheirreceiving theconsent oftheNational Bank.
6. Therequirements ofthepresent article arecompulsory forobservation bybanks overthe
entire duration oftheiractivity.
Article 21. Additional Documentation Required forFounding aBank withtheParticipation ofa
Bank which isaNon-Resident oftheRepublic ofKazakhstan
1. Abankwhich isanon-resident oftheRepublic ofKazakhstan which isthefounder ofabank,
apart from thedocuments indicated inarticle 19ofthepresent Decree, must enclose the
following documents withtheapplication forgetting apermit toopenabank:
a) thedecision oftheappropriate organ ofthefounding bankonitsparticipation inthe
bankwhich isaresident oftheRepublic ofKazakhstan;
b) written confirmation oftheorgan ofbankinspection oftheappropriate statethatthe
founding bankhasavalid license forcarrying outbanking activity;
c) written confirmation from theorgan ofbank inspection oftheappropriate statethat
thefounding bankissubject toinspection onaconsolidated basis;
d) duly compiled annual reports ofthefounding bank (including aconsolidated
balance-sheet andaprofit andlossaccount) forthelastthree financial (operational)
years, confirmed byanauditing firm(auditor) meeting therequirements ofpoint 4
ofarticle 19ofthepresent Decree;
e) written notification bytheorgan ofbanking inspection oftheappropriate statethat
itpermits theparticipation ofthefounding bankinthecharter fundofthebankwhichWT/ACC/KAZ/6/Add.1
Page36
isaresident oftheRepublic ofKazakhstan, oranannouncement bytheorgan ofbank
inspection oftheappropriate statethatsuchpermission isnotrequired under the
legislation ofthestateofthefounding bank.
2. Thenorms ofthepresent article apply alsotobanks which arenon-residents oftheRepublic
ofKazakhstan inthecaseoftheiracquiring ashare inthecharter fundofanoperating bank
which isaresident oftheRepublic ofKazakhstan.
Article 22. Additional Requirements fortheFounding andActivity ofBanks with Foreign
Participation
1. When founding andoperating banks withforeign participation ontheterritory oftheRepublic
ofKazakhstan thefollowing requirements must beadhered to:
a) thetotalregistered charter fundofbanks withforeign participation maynotexceed
twenty fivepercent oftheaggregate registered charter fundofallbanks oftheRepublic
ofKazakhstan;
b) atleastonemember oftheSupervisory Council ofabankwithforeign participation
mustbeacitizen oftheRepublic ofKazakhstan whoshallsubmit documents testifying
tohis/her notlessthanthree years'experience indirecting abankoperating onthe
territory oftheRepublic ofKazakhstan andtohis/her knowledge ofbanking and
economic legislation oftheRepublic ofKazakhstan;
c) abankwithforeign participation must place financial resources intointernal assets,
intheamount andprocedure established bytheNational Bank. Internal assets are
understood astheassets ofabank withforeign participation inTenge andforeign
currency placed ontheterritory oftheRepublic ofKazakhstan, including:
- banknotes, coins andpayment documents;
- financial resources ofabankwithforeign participation incorrespondent and
other accounts inbanks oftheRepublic ofKazakhstan;
- securities oftheGovernment andresidents oftheRepublic ofKazakhstan;
- credits given totheGovernment andresidents oftheRepublic ofKazakhstan.
2. TheNational Bank hastherighttosetforth additional requirements tobanks withforeign
participation concerning themembership oftheir organs, thelistofbanking operations
performed, prudential norms andtheprocedure foraccounting.
Article 23. Procedure forConsideration ofanApplication forIssue ofaPermit toOpen aBank
1. Anapplication toissue apermit toopenabankmust beconsidered bytheNational Bank
within sixmonths from thedayoftheapplicant presenting thelastadditional information
ordocument asked forbytheNational Bank, butnolaterthanninemonths from thedate
offiling theapplication.
2. TheNational Banknotifies theapplicant inwriting about thedecision made. Thenotification
issenttotheaddress indicated intheapplication toissue apermit toopenabank.
3. TheNational Bank keeps record ofthepermits issued foropening abank.
B. Registration asaLegal Entity
According toArticle 25oftheLaw"OnBanks andBanking Activities":
- Stateregistration ofabankisdoneattheMinistry ofJustice onthegrounds ofapermit from
theNBK toopenabank;WT/ACC/KAZ/6/Add.1
Page37
- thefounders mustapply totheMinistry ofJustice forstateregistration ofabankwithin one
month afterthedayofreceiving theNational Bank'spermit toopenthebank.
Banks mayonlyregister asaJointStock Company. Theprocedures andrequirements for
bankregistration attheMinistry ofJustice arethesame asanybusiness entity registering asaJSC.
Theregistration procedure andrequirements aredefined intheLaw"OnState Registration ofLegal
Persons" of17April 1995, theLaw"OnForeign Investment" of17December 1994, andamendments
tobothlawsof15July1996. These twolawswereprovided totheWTO Secretariat inAugust 1996.
Article 9oftheLaw"OnState Registration ofLegal Persons" mandates thatregistration
should occur within 15daysofreceipt ofalldocuments. Documents required forregistration ofbank
arethefollowing: registration application form, charter, confirmation oflocation ofBank, proof of
bankdeposit orindependent auditresults, statistics card(obtained fromtheStatistics Committee), proof
ofpayment ofregistration duties, andpermission from thenational bank. Additional documents if
thefollowing applies:
- ifmore thanonefounder -thereisaneedtosubmit thefoundation agreement andtheprotocol
offoundation meeting
- ifastateenterprise isafounder ofthebank-there isaneedtoobtain theapproval ofowner
orauthorized body;
Entities withforeign participation must:
i. submit 3additional documents: bankconfirmation ofsolvency offoreign participant, proof
oflegality offoreign participant, copy ofpassport orother identification document (only
required iftheforeign participant isanindividual);
ii. register attheCentral Registration Department oftheMinistry ofJustice inAlmaty. An
entity withnoforeign participation mayregister attheOblast Registration Department of
theMinistry ofJustice intheOblast where itoperates.
Alldocuments required forregistration mustbeinKazak orRussian languages. Alltranslated
documents andcopies ofdocuments must benotarized
Denial forregistration mayoccur under oneofthefollowing twocases:
i. incomplete setofrequired documents;
ii. contradictions withcurrent legislation oftheRepublic ofKazakstan.
According toArticle 11oftheLaw"OnStateRegistration ofLegal Persons", theMinistry
ofJustice Registration Department mustprovide awritten refusal explaining thereasons forrefusal.
Incaseofrefusal ofregistration bytheMinistry ofJustice, thebankshould revise itsdocuments to
comply withnational legislation andresubmit forconsideration again.
Article 17oftheLaw"OnStateRegistration ofLegal Persons" states thatdisputes between
thefounders oflegalpersons andstateregistration body maybeappealed inthecourt.
Question 90.
TheMemorandum (page 53)states thatthemaximum foreign participation ininsurance joint
ventures is50percent. Does Kazakstan have plans toreduce thislimitation?
Answer:
Currently, Kazakstan doesnothaveanyplans toreduce orcancel thislimitation.WT/ACC/KAZ/6/Add.1
Page38
Telecommunications Services
Question 91.
What kinds oftelecommunications services areforeign companies permitted toprovide in
Kazakstan?
Answer:
Foreigncompaniesarepermittedtoprovideallkindsoftelecommunicationsservices.However,
appropriate licenses mustbeobtained. Licensing requirements andprocedures apply equally toforeign
andnational legalandnatural persons.
Question 92.
What arethelicensing processes regarding telecommunications services?
Answer:
Inorder toobtain alicense toprovide anytypeoftelecom services, anapplicant should submit
anapplicationaccordingtotheLawonLicensing(application,license,fee,certificateofstateregistration,
andqualification requirements). Qualification requirements should reflect thefollowing: activity and
previous experience inthefieldofcommunication; business planwithgeneral anddetailed description
oftechnical equipment; technical interaction andinterrelation withexisting structure ofthenetwork
tobeusedbytheapplicant; andalllegalrelations connected withfinancing, consumers, andpartners.
Tendersareconductedfortheallocationofradiofrequencyspectraandcellularcommunication.
Question 93.
Arethere limits tothelevelofforeign ownership oftelecommunications services?
Answer:
No.There arenolimits tothelevelofforeign ownership oftelecommunications services.
Question 94.
DoestheAnti-MonopolyCommitteeresolvedisputesbetweentelecommunicationscarriersconcerning
interconnection?
Answer:
Alldisputes between telecommunication carriers concerning technical interconnection are
decided bytheLicense Issuing Body attheMinistry ofTransport andTelecommunications onthebasis
ofterms specified inissued licenses. Incaseoneparty disagrees withthedecision oftheLicense Issuing
Body, suchparty mayappeal toacourt intheRepublic ofKazakstan.
VII. INSTITUTIONALBASISFORTRADEANDECONOMICRELATIONSWITHTHIRD
COUNTRIES
Question 95.
Could Kazakstan provide copies ofthose trade agreements towhich itisaparty which constitute
free-trade areas orcustoms unions?
Answer:
ThetextoftheCustoms Union Agreement andallrelated legislative andadministrative acts
areprovided inAttachment Atotheresponse toECQuestions regarding WT/ACC/KAZ/3.WT/ACC/KAZ/6/Add.1
Page39
ThetextsofallFreeTrade Agreement 's,which areinforce (ratified byallparties), towhich
Kazakstan isaParty areprovided inAttachment Btotheresponse toECQuestions regarding
WT/ACC/KAZ/3.
Question 96.
Could Kazakstan please explain thereasons for,andsignificance of,theprovisions which restrict
unauthorized export (page 53)?
Answer:
Theprovisions donotdealwithexports ingeneral butwithre-exports. Thereason isthat
certain goods aresubject totariffandnon-tariff measures according tointernal legislation oftheParties
oftheFreeTrade Agreement. When suchgoods areexported from oneParty oftheFreeTrade
Agreement toanother, suchmeasures maynotapply. Butifthegoods inquestion arere-exported,
thecountry oforigin mustbeinformed about suchtransaction. Permission ofthecountry oforigin
isrequired inorder todetermine whether ornotappropriate tariffandnon-tariff measures should apply.
Question 97.
Wewould begrateful ifKazakstan could clarify thestatement (page 54)thatsome agreements
provide forfreetrade inservices butdonotprovide preferential treatment? Which agreements
cover services? Areallservices sectors covered? Dothese agreements provide benefits which are
available onanMFN basis tocountries which arenotparties totheagreements?
Answer:
None ofthefreetradeagreements inforce contain anyspecial provision regarding freetrade
inservices. Other freetradeagreements referonly,ingeneral terms, totheaimoftheparties toestablish
freetradeinservices without mentioning theservice sectors tobecovered, without providing anyspecial
benefits, andwithout giving preferential treatment totheother parties oftheagreement regarding trade
inservices.
Question 98.
Foreach oftheagreements mentioned inSection VII.2 (page 54),canKazakstan provide
information on:
(a) whether theagreement currently provides forfreetrade inallproducts or,ifnot,the
timeframe within which freetrade willbereached.
Answer:
Article 5oftheCustoms Union Agreement foresees thepossibility tointroduce, incritical
situations, temporary exceptions from freetrade. Currently, nosuchexceptions exist.
OfalltheFreeTrade Agreements listed inSection VI.2 ofWT/ACC/KAZ/3, onlythe
agreement withMoldova andtheagreement withtheKyrgyz Republic havebeenratified bybothparties
andarepresently inforce. Thelistofexemptions fromfreetrade areagreed toinprotocols tothese
agreements. Since March 1996, however, Kazakstan nolonger excepts anyproducts from thefree
trade regime withtheKyrgyz Republic, given thattheKyrgyz Republic signed theCustoms Union
Agreement.
(b) whether there areexemptions from thefreetrade provisions foranyproducts and,if
so,thesignificance oftrade intheexempted products relative toKazakstan 'stotaltrade
withtheparty concerned;WT/ACC/KAZ/6/Add.1
Page40
Answer:
Thefollowing tableprovides %tradeineachmajor sector excluded fromthefreetraderegime
withMoldova.
1995 1996 January-October
HS Export,
Th.USDImport,
Th.USDExport,
Th.USDImport,
Th.USD
1001 Wheat (alltypes) 158.3 - - -
1002 Rye 36.1 - - -
1003 Barley 40.7 - - -
1004 Oats 9.5 250.9 - -
1006 Rice-grain, rice-groats 13.6 - 12.9 -
1007 Sorghum - 30.2 - -
0102 Rye - 2.7 - -
4102 Rawskins ofsheep orlambs 1.7 - - -
1512 Sunflower-seed, safflower or
cotton-seed oilandtheirfractions butnot
chemically modified- 1.5 - 13.1
1104-1105 Groats 25.6 - 36.4 -
Total 285.5 285.3 49.3 13.1
-notrade
Thepercentages ofexport andimport excluded from freetrade regime withMoldova in
terms ofKazakstan 'stotalvalue oftrade withMoldova arerespectively:
- 11.57% and5.14% for1995; and
- 2.5% and0.17% forthefirstthree quarters of1996.
(c) details ofanyexempted industry sectors forwhich theagreement doesnotprovide for
freetrade between theparties, including whether suchexemptions aretemporary;
Answer:
There arenoexempted industry sectors forwhich these agreements donotprovide forfree
trade. However, there areexemptions forcertain goods. Please seeresponse toprevious question.
(d) whether theagreements contain transitional provisions, andifsothedetails ofthese;
Answer:
Theagreements donotcontain transitional provisions.
(e) details ofanypreferential market access arrangements which provide forpreferred access
butdonotprovide forfreetrade.
Answer:
TheRepublicofKazakstanjoinedthesystemofpreferencesfordevelopingcountries.Currently,
75%ofthebaserateofimport tariffs isapplied forgoods produced indeveloping countries. Goods
produced inleastdeveloped countries areimported toKazakstan dutyfree. Thelistsofdeveloping
andleastdeveloped countries andthelistofgoods excluded frompreferential treatment wereprovided
inSection EofAnnex 8ofWT/ACC/KAZ/3.WT/ACC/KAZ/6/Add.1
Page41
(f) provisions ofeachagreement thatdonotspecifically relate toimport tariffs, including
harmonisation oflegislation affecting foreign trade, quantitative restrictions, taxation,
customs feesandformalities, export duties, export subsidies, import andexport licensing,
anti-dumping andcountervailing duties, safeguard measures, preshipment inspection,
technicalbarrierstotrade,sanitaryandphyto-sanitarymeasures,trade-relatedinvestment
measures, trade-related intellectual property rights, government procurement, andrules
oforigin;
Answer:
Onlytwoagreements haveentered intoforce. These aretheagreements withMoldova and
theKyrgyz Republic. Acopyofthetextsofthese twoagreements were provided inAttachment B
totheResponses toECQuestions regarding WT/ACC/KAZ/3.
(g) details ofwhen theagreements entered intoforce orareexpected toenter intoforce.
Answer:
Only twofreetrade agreements areinforce:
- withMoldova -1995
- withtheKyrgyz Republic -1996
Alltheother agreements were ratified onlybyKazakstan. Itisdifficult tosaywhen they
willberatified bytheother parties andenter intoforce.
Question 99.
CanKazakstan provide more information onitsexpectations andplans forthenegotiation of
newfree-trade areas andcustoms unions, plans forfurther developing existing agreements and
howKazakstan seesthese plans asconsistent withtrade liberalisation onmultilateral basis as
amember ofWTO?
Answer:
Kazakstan doesnothavecurrently anyon-going negotiations ofnewfreetrade areas and
customs unions. However, thereareplans forfurther developments ofexisting agreements. Kazakstan
believes thatthefreetrade areas andcustoms union towhich ithasadhered aretrade creating, and
nottrade-diverting, andthusmeetthecriteria established inArticle XXIV ofGATT 1994forexceptions
totheMFN principles.
Annex 1Statistics andPublications
Trade statistics
Question 100.
Weunderstand thatthere areproblems inthecollection ofstatistic onKazakstan 'sforeign trade,
inparticular problems relating tocoverage oftheforeign transactions ofwhat seems tobealarge
informal trading sector. Although thesituation isimproving asresult ofOECD support, thisis
anareathatwillnonetheless require further improvement iftransparency istobeincreased.
Wewould appreciate more information onthesteps Kazakstan istaking toimprove thesituation
inrelation onthecollection andavailability ofstatistical information.
Answer:
Since 1994, theforeign trade statistics ofKazakstan havebeenprepared onthebasis ofthe
Customs Cargo Declaration submitted byimporters toCustoms. ACustoms Cargo Declaration mustWT/ACC/KAZ/6/Add.1
Page42
befiledwithCustoms forallgoods subject tocustoms duties andtaxes, goods subject tomeasures
ofeconomic policy (licensing, certification, etc.), orgoods thecustoms value ofwhich exceeds 100
ECU. However, natural persons arenotrequired tofilesuchCargo Declarations inmostcircumstances.
Thisgives risetotheproblem oftracking flowofgoods thataretransferred by"shop-tourists".
TheNational Statistics Agency ofKazakstan, incalculating balance ofpayments, evaluates
thevolume offoreign trade transactions performed byshoptourists. Themethod ofevaluation has
beendeveloped based onthenumber ofpeople thathavevisited therepublic ortravelled abroad. In
addition, theCustoms Committee ispreparing aninstruction on"Procedure forTransfer ofGoods
byPhysical Persons through theCustoms Border ofKazakstan". Under thisprocedure, persons will
berequired tosubmit an"application" orasimplified declaration where theimported goods aresubject
toduty(goods imported bynatural persons aresubject todutywhere thevalue orweight ofthegoods
imported exceeds $2,000 or70kilograms, respectively). Thatapplication willbetreated asacustoms
declarationforpurposesofcustomsprocessingandcontrol.TheinstructionwillrequireCustomstransmit
theinformation setoutintheapplication totheStatistics Committee forpurposes ofcompiling the
foreign trade statistics.
Regarding theavailability ofstatistical information, Kazakstan hasanumber ofpublications.
Thelistofsuchpublications wasprovided insection 2ofAnnex 1ofWT/ACC/KAZ/3.