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Public funds as a tool for extortion

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Entrepreneurs are obliged to pay contributions that actually fall into the pockets of Akimats

Currently, in some regions of the country work organizations on socio-economic development of settlements. In general, these are associations or public funds. Major part of the participants are individuals. On the basis of tripartite memorandums between businesses, these organizations and akimats of regions, cities and districts, entrepreneurs are obliged to transfer money to the funds. Contributions vary and are actually determined by the local executive bodies. Millions of tenge, charged from businesses, are often directed on the needs of local authorities, in particular for repairs of communal property. This issue was addressed at the next meeting of the Council on protection of the rights of entrepreneurs under NCE RK "Atameken", which took place at the General Prosecutor's Office of the Republic of Kazakhstan.

"So, for example, the public fund in Kostanai region in 2013-2014 concluded memorandums with agricultural producers at the rate of 300 tenge per 1 hectare in 2013, 500 tenge in 2014, with other business entities: small business - 15,000 tenge, medium business - 50,000 tenge, big business up to 1 million tenge and more. Another public fund in the Kostanai region concluded memoranda, under the terms of which, the amount of the contribution was 100 tenge per 1 hectare of grain land", - said director of the department of legal protection of entrepreneurs NCE RK "Atameken" Oleg Savelenko.

He said that the contributions of entrepreneurs to the above-mentioned fund were spent on the repair of the kindergarten. "In the opinion of the Chamber, the cost of maintenance and repair of buildings of preschool institutions and buildings, which are communal property of state enterprise, should be covered at the expense of the local executive bodies of a settlement and related business entities, not the entrepreneurs of the region through the compulsory transfer of funds to the NGOs. In addition, the National Chamber considers that the transfer of money or entrepreneur’contributions to social organizations and funds for regional development should be voluntary, not an obligation, established in any document", - said the representative of NCE RK.

"I address to all prosecutors of all regions: what you have heard, should be subject of inspections in the next quarter", - said, in turn, Deputy General Prosecutor of RK Andrey Kravchenko.

"I see in these actions basic things that should be subject to criminal law procedure and nothing else. Yes, someone might be willing to help someone in the form of sponsorship on voluntary basis - no one forbids, but there can be no obligations. What a savagery? Are we back in the 90s? Don’t you understand what you are doing there in the regions? Addressing to Akimats, I want to say one thing: creating all sorts of public funds, watch what is happening in them. In your shoes I would compose the public funds of – MPs, businessmen, who have seen how the fund manages money and where they come from", - he added.

They also considered another problem, which concerns violations of budget legislation. "Article 57 of the Budget Code clearly states that to the work of the budgetary commission on entrepreneurship are attracted representatives of NCE RK. Currently, out of the 16 regional budget committees only two regions Mangistau and Pavlodar have representatives of RCE in their composition. Akimat of Almaty, West Kazakhstan and North Kazakhstan regions openly state that the respective representatives of the Regional Chamber involve in the budget committees in the event of consideration of issues, affecting business. Surprisingly, perhaps, for two and a half years there wasn’t considered a single issue related to entrepreneurship, because the representatives have not been invited to work", - said the chairman of the Council for the protection of the rights of entrepreneurs NCE RK Gani Kasymov.

Savelenko also noted the fact of widespread breach of the budget legislation by the local executive bodies. "Such a violation infringes on the rights of the business community in terms of participation in the formation of the budget on issues that affect the business", - he said.

After considering these issues, Kasymov noted that the announced by Kravchenko checks of public funds will be included in the Council's resolution. "To recommend to akimats of regions, cities of Almaty and Astana, to comply fully with the budgetary legislation in terms of involvement of the representatives of the National Chamber in the budget committees during consideration of issues, affecting the interests of entrepreneurs. If Akimats ignore it again, the Prosecutor General’s Office will intervene in the process. NCE recommends to develop a methodology and to take measures for the public monitoring of the actions of officials of local executive bodies of areas for the provision of various public funds of any assistance in obtaining sponsorship or other financial help from private entrepreneurs. All the facts should be conveyed to the authorities of the Prosecutor’s General Office. In case of violations of the rights of entrepreneurs, it is necessary to submit a statement to the Prosecutor General's Office on the subject of criminal punishment", - he concluded.


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