Atameken proposes to strengthen state agencies’ punishment for breach of contracts

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The issue of protection of the rights of entrepreneurs in contractual relations with state agencies has been discussed during the meeting of the Council for the protection of the rights of entrepreneurs of Atameken NCE RK.

It is worth noting that violations of contractual obligations by state agencies and subjects of the quasi-public sector inflict damage for entrepreneurs and the state as well.

“This is a failure to receive taxes and other obligatory payments to the budget, because of the non-fulfillment of the terms of the contracts, penalties are imposed, and the costs of entrepreneurs for legal assistance in resolving disputes increase,” Kairbek Suleimenov said.

Unfortunately, the equality of state and business in contractual relations provided for in Article 111 of the Civil Code is only a declaration and is subject to reform. According to the deputy of the Mazhilis of the Parliament of the Republic of Kazakhstan Kenes Absatirov, this practice entails a burden on business in terms of paying taxes, repaying credit debts, as well as salary delay and loss of image.

“The main thing is that distrust towards the state occurs after such cases. Business and state are suffering losses since litigation entails legal costs and attorney fees. A striking example of the failure of government agencies to fulfill their obligations is the Business Roadmap-2020 program. In 2015, there was a good initiative to bring the infrastructure to the facilities but it was removed,” Kenes Absatirov said.

The speaker added that today there is a mixture of public and private law principles. In addition to Civil Law, there is the regulation of relations between the state and business, not only civil law.

Director of Zhaksytuz Petropavlovsk LLP Erik Azenov confronted with the indifference of state agencies. A plant for the production of edible salt was planned to be built at the Zhamantuz field in the Ualikhanov district of the North Kazakhstan region. Production capacity would be 80 thousand tons per year. However, since 2016, an entrepreneur cannot reach state authorities.

“The field is not large to attract a foreign investor. We have entered into a contract with the state, the terms of which are still not fulfilled by the local authority. I have already won three courts in the NKR, the court issued decisions to the Akimat, which were not executed,” Erik Azenov said.

In addition, there is economic damage to the state in the form of legal costs and attorney fees. According to the business, there are still tendencies to protect the interests of the state in any way in the judicial case.

According to the counting committee, government agencies in 2017 owed business 40 billion tenge. For 2018, 1000 executive documents for 9 billion tenge were not executed.

According to the chairman of the Judicial Collegium for Civil Cases of the Supreme Court of Kazakhstan Meirambek Taymerdenov, today measures are being considered to toughen the punishment of liability for violation of the law for civil servants. In the meantime, you cannot invoice or put a restriction on the property addressed to the violator.

Following the meeting of the Council, the Ministry of Justice together with the Supreme Court and the General Prosecutor’s Office was recommended to consider the possibility of establishing criminal, administrative or disciplinary responsibility of officials guilty of breach of contractual obligations, depending on the consequences.

Watch video broadcast of the meeting of the Council on the Protection of the Rights of Entrepreneurs here.