The national chamber of entrepreneurs of the Republic Kazakhstan "Atameken"
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What has changed in the business regulation law?

03 September 2018
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Nursultan Nazarbayev signs amendments to enhance regulation of Kazakhstan entrepreneurship.

Today, the President of the Republic of Kazakhstan, Nursultan Nazarbayev, has signed amendments to improve the regulation of Kazakhstan's business "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Improving Regulation of Entrepreneurial Activity," emphasizing the special significance of the signed law.

It should be noted that "Atameken" NCE RK took direct part in the development. Let's look at the proposals of the NCE that were taken into account.

DEREGULATION OF BUSINESS

One of the main innovations is the introduction of preventive control. As a result, the businessman will be given an order to eliminate violations without imposing an administrative penalty. Reduction of control and supervisory functions of state bodies is also provided. 20 control areas out of 114 are excluded due to duplication and lack of efficiency, 17,654 requirements for the verification of business entities out of 30,497 are reduced. Duplicate and unrelated threats to the state and the consumer have been eliminated 108 of the 544 control and supervisory functions of state bodies.

The terms of inspections under the special order and professional control are reduced from 30 to 15 working days, and according to unscheduled inspections - from 30 to 10 working days.

In general, the measures taken to reform state control and supervision will reduce the number of inspections by 30% by 2018, and by another 10% by 2020.

FRONTAL DECREASE OF ALL COSTS FOR BUSINESS

“Atameken” prepared 71 recommendations on reducing costs for business. Taking into account the proposals of business and government agencies, a preliminary list of measures has been identified, the implementation of which will ensure a reduction in costs for business, namely:

1. Price reduction of a number of paid services provided by enterprises in the quasi-public sector;

2. Reduction of the rates of individual taxes and mandatory payments to the budget (fees);

3. Narrowing of the gap between tariffs (prices) for legal entities and the public for regulated public utilities;

4. Improvement of the procedure for issuing technical conditions for connection to regulated services of subjects of natural monopolies;

5. Solution to the problems of land relations. The transparency of the process of granting land plots will be ensured. The obligation of akimats to hold auctions is legislatively fixed, which minimizes corruption risks in this area. 

INFORMATIONAL INSTRUMENTS REFORMATION

One of the important administrative barriers to the development of entrepreneurship is a large number of information instruments. It is an obligation of the business to provide various kinds of reports, certificates and other information to state bodies and their subordinate organizations. A detailed analysis of the legislation has been carried out, during which a large number of duplicated information instruments were identified as unused or misused.

A primary list of informational instruments has been formed, including more than 1600.

As a result, with the use of the "guillotine" tool, as early as 2018, it is planned to reduce the number of information tools by 30% and to fix the list legally.

IMPROVEMENT OF THE POSITION OF KAZAKHSTAN IN THE "DOING BUSINESS" WORLD BANK RATING

The new package provides for amendments to 9 indicators of the "Doing Business" rating  ("Establishment of Enterprises", "Contract performance security", "Obtaining Construction Permits", "International Trade", "Connection to the Electricity Grid", "Protection of Minority Investors", "Insolvency solution"," Registration of property "," Access to credit"), 148 amendments are proposed in 7 codes and 20 Laws. In general, the 6th package of amendments suggests the implementation of 12 recommendations of international experts.

Inspection for the availability of barriers for competition

The purpose of the inspection is to improve the business climate in the country by creating favorable conditions for the development of healthy competition without risks of damaging the interests of society and ensuring national security.

36 amendments for 8 analyzed codes were developed. According to the results of the analysis of 10 laws, 95 amendments are provided.

The amendments are aimed at:

1. Exclusion and (or) changes in the norms of laws and by-laws that prevent the emergence or development of competition;

2. Exclusion and (or) change of the norms of laws, that lead to impairment of the rights of an unlimited circle of persons.

Currently, the revision of legislation to identify norms that prevent competition development is being continued. It is planned to analyze another 70 laws and 1000 by-laws, which will result in additional amendments to the legislation.

BUSINESS RESPONSIBILITY ENHANCEMENT

Atameken, in conjunction with the Ministry of Energy of the Republic of Kazakhstan and other state bodies, carried out a work to deregulate the business and reduce costs, the results of which were included in this bill.

Proposals have been worked out to provide for enhancement business responsibilities. In what way?

First of all, business responsibility is being ensured through self-regulation. The introduction presupposes the establishment of increased requirements to the standards and rules of the business community, the imposition of joint property liability of all members of the self-regulatory organization for the shortcomings of one.

Next step is the development of the system of consumer protection. For sustainable development of the country, it is necessary to create a system that equally ensures the interests of both the state and business, and society as a whole.

This can also be reflected through the principle of "healthy competition". It is common knowledge that it is possible to improve the quality of goods, works and services provided through competition. In this regard, "Atameken" proposes to create a national rating system. The implementation tool should be a rating system - an independent evaluation and ranking of business entities according to consumers' opinion, official financial reporting and the establishment of the principle of fair social and economic relations.

Also, to enhance business responsibility and ensure the principle of good faith, NCE plans to develop and adopt a Code of Ethics and Business behavior of the entrepreneur. The Code will establish the norms and obligations of entrepreneurs in interaction with other business entities, as well as mechanisms for compliance with these obligations.

For example, an ethics council will be set up at the NCE, it will consider the reports and allegations of violations of the code of ethics by businessmen, the results will be posted on the Atameken website.

Next is the development of alternative forms of control, for example insurance or audit as well as strengthening of explanatory work and the development of consumer education.

"The main goal of the amendments is the liberalization of legislation in the field of business regulation. The law provides for the reduction of state control functions by almost 30 percent. An important role is assigned to the institution of preventive control, which will prevent violations. The services of natural monopolies and the quasi-public sector are being regulated" - the Head of State commented, expressing confidence that the adoption of this Law will be a new serious stimulus for enhancement business activities in the country for the benefit of an entire people.

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