Review of Kazakhstan's Proposed Adherence to the OECD Declaration on Multinational Enterprises
Michael Wilson and Yermek Aubakirov of MWP, were invited to take part during a question and answer session of the OECD On-Site Visit to Astana held at the Rixos Hotel, that was held on 19-20 April 2016. At the meeting the OECD raised the following questions with MWP:
• Could you explain whether the process of obtaining administrative licenses and permits has improved in Kazakhstan since 2012? What problems do your clients usually face in this regard?
• Are you aware of the implementation of a single window for business registration? To what extent, it is used by your clients (or other firms)?
• What are the most frequently encountered problems by the firms required to comply with local content requirements in Kazakhstan?
• Could you explain the applicable local content requirements in Kazakhstan and the recent changes that took place as a result of Kazakhstan's entry into the World Trade Organisation (WTO)? Are there any planned legislative changes in this area that you are aware of?• As to the local content rules in the subsoil and automotive sectors, has the legislation been passed that (and can you point to specific clauses in the existing legal acts that implement these changes):
a. Phases out all WTO-inconsistent measures applied under investment contracts in the automotive and subsoil sectors by 1 January 2021 and 1 July 2018?• Have any legal or administrative steps been taken by the Kazakh authorities to ease the hiring of foreign staff? To what extent this issue is problematic to your clients?
b. Stipulates that no local content in goods can be required during the tender process for subsoil user rights nor included in any investment contract?
c. Stipulates that maximum of 50% of local content in services and works can be required, and no additional incentive will be provided to firms that use higher shares of local content?
• Could you provide references to the legal acts governing the rules on hiring foreign workers and granting of working permits for foreign staff? Are you are of any planned legislation in this area?
• Is it true that the overall number of work permits (outside of intercorporate transferees, ICTs) is limited to 0.7% of the active population in 2016 and no working permit can be granted beyond that quota (besides ICTs)? How is this number translated into quotas at the oblast level?
• Could you provide us with an overview of the most important changes to Kazakhstan's tax regime that took place since December 2015? Has the new joint tax and customs code been developed?
• Have there been any notable changes in regards to the quality of laws and regulations in Kazakhstan since 2012 (in terms of their transparency, predictability or legal coherence, for example)?
• Has the process of negotiating investment contracts changed in any way since 2012? What are the main problems that firms face in terms of entering, amending or exiting such contracts?
• Did the Law on Public-Private Partnerships (Law on PPPs) from 31 October 2015 facilitate participation of private firms in infrastructure investment projects? What are the main achievements and main lacuna of the law? What are the persisting legal or administrative barriers to greater participation of private firms in infrastructure investment projects?
• Has the quality of domestic courts improved since 2012? Where there any important changes in this regard?
• How do you view the government's ongoing work on developing a model investment treaty?
• Has arbitration been viewed as an attractive tool for securing investment in Kazakhstan by your clients? Is this perception changing?
• How useful is the position of the Business Ombudsman to the firms that you represent?
• How useful is the Foreign Investor Council to the firms that you represent?
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