The Atameken National Chamber of Entrepreneurs of Kazakhstan protects the interests and rights of entrepreneurs. The National Chamber of Entrepreneurs has made a selection of 10 problems of 2019, and these problems were eventually resolved.

We prescribe the recipes correctly

The problem was that, according to legislation, starting from 5 May 2019, all prescriptions should have a shelf life of three years. It means that prescriptions for all medicines must be left in the pharmacy and stored there during this period.

A simple requirement, why was it impossible?

The reason is that the electronic information system for issuing prescriptions for the full price and their supply has not yet been launched. In addition, the storage of prescriptions written on paper for three years requires space and control. Patients themselves also demand their prescriptions back, because often the doctor writes not only the name of the medicine but also information about its correct use.

But even if pharmacies start collecting and storing prescriptions, the doctors themselves are not ready for this. In most cases, doctors do not comply with prescription requirements, do not use prescribed forms.

The situation was resolved thanks to the efforts of the Atameken experts. Amendments were made to Order No. 373 of the Ministry of Health as of May 22, 2015, "On approval of the rules for issuing, accounting, and storage of prescriptions.

Would you be so kind as to give me a bank guarantee?

The next problem concerns the rules approved by the order of the Minister of Agriculture of Kazakhstan. The rules for the organization and conduct of the competition to provide the right of temporary compensatory land use for farming or peasant agriculture, agricultural production, included requirements for the provision of a bank guarantee or a positive decision of the credit committee of the financial institution to confirm the volume of investments attracted when submitting documents for participation in the competition.

However, in the same rules, a paragraph providing an exhaustive list of requirements for the content of a tender application does not provide any bank guarantee.

Moreover, the draft rules posted on the Internet portal of open regulatory acts (https://legalacts.egov.kz/npa/view?id=1926392) also did not contain such a requirement.

In this case, the goal pursued by the developer is not clear. If, according to the same Land Code of the Republic of Kazakhstan, there is already an obligation to conclude a relevant contract.

But at the same time, the same rules state that if the points of two or more bids are equal, the winner of the tender is determined by the participant who confirms the volume of attracted investments by a bank guarantee.

It turns out that these rules contradict each other.

Is it worth reminding that entrepreneurs are more often faced with the problem of banks' refusals to issue guarantees, because according to the legislation the latter are obliged to answer to the creditor to the same extent as the debtor, including the amounts of penalty, remuneration (interest), court costs of debt collection and other losses of the creditor caused by the failure or improper performance of the obligation by the debtor.

Thus, the entrepreneur may face a number of administrative barriers, which may lead to red tape in the process of rent execution (search for a bank that will provide a guarantee), taking additional obligations.

The situation has been saved by introducing the amendments. Unjustified requirements for potential participants of a bank guarantee or a positive decision by the credit committee of a financial institution were eliminated. The term for compiling the list of land plots put up for tender has also been determined.

We stand for fair competition

Let us give you a little bit of background. As part of the implementation of the Nurly Zhol state program in 2016, work was carried out on the construction of roads on eight projects for 1.8 thousand km, 767 km were reconstructed. In 2017, 22 road projects with a total length of 4.4 thousand km were implemented under the state program.

In the period from 2018 to 2022, it is planned to reconstruct 23 road projects with a length of more than 4.7 thousand km and carry out repairs on the roads with a length of about 7.5 thousand km.

Some 300 billion tenge has been earmarked for projects from the National Fund, the national budget, and international financial institutions.

Based on such spending and efforts, it is clear that all current requirements in Kazakhstan on the weight of vehicles should be aimed at preserving the roadbed and safe operation of roads. It is not clear why then the vehicles with cargo (TNP, inert materials, sand, crushed stone, cement, etc.) drive on the roads with a large overweight, having received special permission and having paid the amount of the toll.

The essence is that for 182,595 special permits issued from 2013 to 2017 for the transport of heavy and bulky goods, received about 12 billion tenge. At the same time, between 2014 and 2017, about 80 billion tenge was spent on road rehabilitation work.

So, the payment for a special permit is disproportionate to the cost of road reconstruction and repair.

In order to preserve roads and provide the population with quality road infrastructure, it was proposed to issue special permits for the passage of heavy and/or large vehicles only when transporting "indivisible" cargo and without exceeding the axial load. An "indivisible" cargo is a cargo that cannot be divided into two or more parts without loss of consumer properties or risk of damage.

This proposal was recognized as a way out of the situation and accepted.

No advance payment

According to the standard contracts of the Ministry of Energy of Kazakhstan, payment for water and heat supply is made for actually consumed volumes, i.e. there is no advance payment system. However, the situation with payment for energy resources is not clear. For example, the monopolists, MAEK-Kazatomprom LLP and KazGazTransAimaq JSC conclude supply contracts, that have such advance payment points. At present, no business entity in the Mangistau region can make advance payments to monopolists in time. At the same time, they are constantly threatened with disconnections. The issue has been resolved quickly. Order of the Minister of Energy of the RK "On Amendments and Additions to the Order of the Minister of Energy of the RK as of November 3, 2014, № 96 "On Approving the rules of retail sales and use of marketable and liquefied petroleum gas" excluded advance payments for gas supply to domestic and public utility consumers (SME), excluded penalties for subsoil and overspending of gas volumes.

Canteens, cafes in basement premises

An entrepreneur who owns a cafe with up to 48 seats, located on the ground floor of a five-story apartment building, faced a controversial situation in the law.

The collision is that as a result of unscheduled inspections carried out in February 2017 on the complaint of residents, the authorized body revealed a violation in terms of preventing the laying of internal sewers under ceilings, in the walls, as well as transit water pipelines in dining rooms, production facilities, and food storage facilities.

Sewerage risers in production and storage rooms are laid in plastered boxes without inspection through the household rooms of food facilities.

At the same time, the regulations stipulate that it is allowed to place food objects both in detached and attached buildings, as well as in rooms built into residential and public buildings and on the first, basement and ground floors of buildings.

During the meetings held by the Atameken NCE RK with the representatives of the Ministry of Economic Development of the Republic of Kazakhstan, it was agreed that this issue should be considered by a special working group.

The proposals of the Atameken NCE RK were supported and included in the draft Order of the Minister of Health "On approval of sanitary rules "Sanitary and epidemiological requirements to public catering facilities". The Order has come into force. The problem of the conflict of regulations has been fully resolved.

You will not score

It is necessary to make amendments to the Order of the acting Minister of Education and Science of the Republic of Kazakhstan "On approval of the rules of the organization of catering for students in organizations of secondary education and the purchase of goods related to the provision of food for children being raised and studied in preschool educational organizations, organizations of education for orphans and children left without parental care".

Why?

Let us explain: when participating in a tender for the selection of a service provider or goods for the organization of catering, entrepreneurs faced a problem related to the lack of work experience in the field of catering.

If two or more potential suppliers are admitted to the tender, the selection criteria according to the standard tender documents shall be applied.

In this case, the winner of the tender is the potential supplier who scored the highest number of points and offered the best conditions. These criteria provide for the availability of experience in the market of services/goods that are the subject of the tender, i.e. preference is given to the subjects that provide services (goods) only in secondary education.

Thus, having a long experience of work in the field of catering, the applicant has no opportunity to compete with other subjects of the market, which in the future may create anti-competitive actions.

Appropriate changes have been made to the rules for the organization of catering for students in secondary education organizations, as well as for the purchase of goods related to the provision of catering for children being raised and studied in preschool organizations and educational organizations for orphans and children deprived of parental care.

At present, if two or more potential suppliers are admitted to the competition, the winner is the one with the highest number of points. If there was one potential supplier who met the requirements, the supplier will be considered the winner.

And in the third scenario, when potential suppliers have scored the same number of points, the winner is the bidder who has the greatest experience in the market.

And at equality of work experience of several potential suppliers, the winner is the potential supplier, the application for participation in the competition of which was received earlier applications for participation in the competition of other potential suppliers.

Tariffing on the agenda

Thus, the law on natural monopolies does not regulate the procedure for carrying out the work of the Expert Council and does not define its status and powers.

According to the law, the establishment of an expert council and approval of its provisions are within the competence of the authorized (anti-monopoly) body.

The Expert Council is only a consultative and advisory body and its decisions are of a recommendatory nature. In practice, half of the members of the Expert Council, i.e. representatives of government agencies, do not appear at the meeting, which testifies to the formal nature of the Council.

On January 14, 2019, a new law on natural monopolies came into force. To increase the transparency of tariff formation, the law introduces a new structure - the Council for Tariff Policy as an advisory and consultative body under the authorized body for discussion and development of proposals for the development of the main directions of state policy in the spheres of natural monopolies. It may include members of the Parliament, representatives of the authorized body and other government agencies, the Atameken NCE RK, public associations, associations of private business entities, natural monopolies, experts and other interested persons.

The Council on Tariff Policy has the right to create commissions on problematic tariff formation issues in the spheres of natural monopolies. The regulation on the Tariff Policy Council and its personnel shall be approved by the authorized body.

The Law also regulates the functioning of Public Associations, the role of which in the tariff policy is to represent the interests and defend the rights of consumers, take part in the discussion of the legislation on natural monopolies, review draft tariffs and investment programs.

Public associations participate in the consideration of draft tariffs and investment programs by the authorized body, reports on the execution of the approved tariff estimates, on the execution of the approved investment program, on the observance of the quality and reliability indicators of the regulated services and the achievement of the performance indicators of the natural monopolies.

At the same time, the approval of tariffs, as well as the analysis of reports of the Council on the execution of the approved tariff estimate, on the execution of the approved investment program, on the compliance with the indicators of quality and reliability of regulated services, as well as the achievement of the performance indicators of natural monopolies is the competence of the authorized body in accordance with the law.

Safe Tourism

In the legislation on compulsory liability insurance of a tour operator and a travel agent, an insured event is considered to have occurred from the moment a court decision on compensation for damage caused by the policyholder comes into force. Or recognition by the policyholder of the tourist's claims for damage compensation as justified.

The insurer, in this case, the company, on the basis of this clause, does not recognize as an insured event the recognition by the policyholder, i.e., e.g. by a travel agency, of the tourist's claims for damage compensation as justified, requiring a court decision, although the law says "or".

Then travel agencies have to go through a long procedure of the court to recognize the compensation of damage to the tourist while bearing unreasonable financial losses. After that, they have to sue the company itself in order to recognize the insured event and receive insurance payments. At the same time, they have to bear the costs and lose precious time again. The law requires all travel agencies to ensure their liability to tourists, and they have no choice.

Why do they have to prove it in court, and insurers get unreasonable profit by refusing travel agencies in insurance payments? It's not clear.

However, from January 1, 2019, the compulsory insurance of every tourist traveling abroad came into force (introduced instead of the compulsory civil liability insurance of the tour operator and travel agent). The minimum mandatory package includes accident insurance plus health insurance. In addition, the National Bank of the Republic of Kazakhstan and the insurance market are currently considering the possibility of developing such an insurance product as voluntary insurance of tour operators and travel agents. With regard to travel insurance, which is declared by the tourist market as a necessary insurance product, insurance companies already offer this type of insurance on a voluntary basis.

Thus, at present, tour operators operating in the field of inbound and domestic tourism no longer need to obtain expensive insurance – Civil liability insurance.

Lowering prices is also a problem.

Starting from January 1, 2018, potential suppliers taking part in public procurement are granted the right to an unlimited price reduction on the condition of making appropriate security.

The practice of holding tenders has shown that anti-dumping measures allow individual suppliers to reduce the price and, consequently, to win the tender with the minimum price offer, which entails the risk of poor quality services and violates the principle of fair competition.

There is even such an example when during one of the tenders on technical supervision in the field of construction, the winner was recognized supplier with a price offer of 1 tenge, and this is with the amount of 23 million tenge allocated for the purchase.

The Atameken NCE RK, having analyzed the situation and carried out the work, has made changes. Thus, changes have been made to Article 26 of the Law on Public Procurement in terms of the fact that the submission of dumping prices is not allowed, except in cases stipulated by the rules of public procurement. The rules also set dumping thresholds.

Business on wheels

For a long period of time, there was a problem to develop entrepreneurship engaged in the field of outbound, mobile trade, the so-called "business on wheels".

Such direction of the business in Kazakhstan is practically absent; although the study of international experience has shown that it is "business on wheels" that has been flourishing in Europe and the United States for decades. Entrepreneurs rent trucks and buses, convert them and go out on the street to feed hundreds of people a day, constantly changing their location. Hundreds and thousands of restaurant vans travel along the roads of European countries and the United States.

Mobile catering outlets are opened not only by professionals but also by ordinary novice entrepreneurs.

Previous legislation of the Republic of Kazakhstan did not allow opening such a business.

Why not?

Sanitary regulations, fire regulations and the need to obtain permission to open such businesses created obstacles.

And now, after a while, the barrier for "business on wheels" has been removed in terms of issuing permits for the conversion of vehicles and trailers for trade pavilions and food outlets. According to the technical regulation of the Customs Union "On the safety of wheeled vehicles," these changes are made to the certificate of registration of vehicles.

In addition, on April 2, 2019, the President of Kazakhstan signed the Law "On Amendments and Additions to Some Legislative Acts of the Republic of Kazakhstan on the development of business environment and regulation of trade activities. It provides for amendments to the law of local government and self-government and on the regulation of trade activities in terms of clarifying the function of local executive bodies to approve not only places but also routes of exit trade.

Thus, the subject of internal trade carries out exit trade in specially designated places and (or) routes determined by the local executive authorities of the city, the capital, district, city of regional importance. In this case, the subject of internal trade can carry out trade on the approved route at any of its points.