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2. Introduction to trade and investment regime
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2.1 Legislation on trade and investment

In Kazakhstan, major laws governing trade and investment include the Customs Code amended in 2003 and the Law on Foreign Investments published in 2003. In addition, other legislation governing this field includes Acts of the Registration of Legal Entities published in 1995, the Labour Law published in 2000, the Tax Code published in 2001, the Law on Currency Regulation, the Law on Licenses, Laws on Standardization, the Law on Subsidies and Countervailing Measures, the Law on Anti-dumping Measures, the Law on Safeguard Measures for Domestic Market upon Importation of Goods, the Patent Law, the Law on Trademarks, Service Marks and Appellations of Origins of Goods, the Copyrights Law, the Law on Protection of Integral Circuits Topologies, the Law on Unfair Competition, the Law on Bank and Banking, the Law on Financial Leasing, the Law on the State Regulation and Supervisions of Financial Markets and Financial Organization, the Law on Architecture and Town Planning and Construction Activity, the Law on Telecommunications, the Law on Grain, the Law on Transportation, the Law on Anti-monopoly and Pricing, etc.

2.2 Trade administration

2.2.1 Import levy system

The current Customs Code specifies that there are three kinds of tariffs imposed by the Kazakhstan Customs: ad valorem duty, specific duty, and mixed duty. Tariff rates of Kazakhstan are usually adjusted annually. In 2005, the ad valorem duty rates ranged from 0 percent to 100 percent. Over 95 percent of the imports were charged 0 percent to 15 percent of ad valorem duties, and the weighted average duty rate is about 8.6 percent.

In Kazakhstan, a value added tax of 15 percent is also imposed on imports, the tax basis of which is the total of the customs clearance value and the customs duties. Certain consumer goods including different kinds of wine and alcohol, cigarettes, caviar, gasoline (with the exception of jet fuel), diesel oil and automobiles are also subject to excise duties.

In addition, a customs clearance fee of €50-70 is charged on each import transaction.

2.2.2 Import administration

Kazakhstan has completely lifted the restriction on trading rights. Every natural person and legal person is free to conduct foreign trade business. All items are free to be imported into Kazakhstan without being subject to quota or licensing restrictions, with the exception of 11 categories including weapons, ammunition and medicines, which are still restricted from import.

2.2.3 Export administration

Kazakhstan encourages export. All items are eligible for export with the exception of nine categories including weapons and ammunition, which are subject to export licenses. The Customs Code specifies that all export items are exempted from export duties and value added tax, except the export of certain animal furs and hides and scrap metals, which are subject to export duties.

2.2.4 Certificates of origin

Generally, certificates of origin are not required of imports into Kazakhstan. However, Article 41 of the Customs Code states that a certificate of origin is required where: (1) goods are exported to Kazakhstan under a preferential tariff scheme; (2) goods from certain countries are subject to non-tariff measures, and the Kazakhstan Customs has reasons to believe that the goods in question are produced in those countries; and (3) a certificate of origin is required by international agreements and conventions to which Kazakhstan is a signatory, or by the relevant Kazakhstani laws concerning the protection of natural environment, public health, consumers' rights, maintaining social order and national security, and the national interests.

2.3 Investment administration

To encourage foreign investment, Kazakhstan enacted the Law on Foreign Investment in 2003, which offers the uniform legal protection and preferences for both foreign and domestic investors. Kazakhstan enforces its investment preferences through government-authorized organizations and encourages foreign investors to invest in priority sectors including agriculture, food processing, textiles and garments, manufacturing of machinery and equipment, chemical industry, construction, transportation and medical service.

There are mainly three categories of preferential policies offered by Kazakhstan, including tax reduction and exemption, exemption from customs duties and VAT on imports, and state grants in kind. Tax reduction and exemption are usually applied to domestic taxes such as property tax, land tax and profit tax, with a maximum preferential period of five years (with extensions included). Exemption from customs duties and VAT on imports is usually applied to equipment and components necessary to an investment project, with a maximum period of five years (extensions included). The state grants in kind include property ownership and the land use rights, the value of which shall be no more than 30 percent of the total investment.

To protect investors' rights and interests, the Kazakhstani Law on Foreign Investment states that investors are free to dispose of their after-tax income and are entitled to open local and foreign currency accounts in Kazakhstani banks. If the foreign investment is nationalized, the state will compensate the investor for his loss. The Law also states that investment disputes can be settled through consultations, or by a Kazakhstani Court or by the International Arbitration Court. When a third party has completed its investment, its stock can be transferred.

2.4 Competent authorities

The Ministry of Trade and Industry of Kazakhstan is the primary competent authorities governing the import and export trade. Its affiliated Committee for Investments is mainly responsible for implementing preferential policies for investment and verifying the enterprises' qualifications for preferential policies. The Customs Control Committee under the Ministry of Finance of Kazakhstan is mainly responsible for enforcing the Kazakhstan Customs laws, administering the customs procedures, collecting customs duties and fees, carrying out customs supervision and recording customs statistics.

The Ministry of Justice of Kazakhstan is the competent authorities in charge of the registration of companies, enterprises and representative offices, auditing registration documents and granting registration certificates.

In addition, the Ministry of Energy and Mineral Resources, the Ministry of Information and Communications and the Ministry of Transport and Communications are responsible for part of the auditing related to the investment and operation of enterprises as well as granting licenses.

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