06.09.2012

There have been few amendments in the permit system and the laws of licensing

In line with GRATA Law Firm’s practice of keeping clients informed of important legal developments, we would like to draw your attention to the review of the Law mentioned above. 

General Provisions 

On 10 July 2012, the Law of the Republic of Kazakhstan 'On Amendments to Some Legislative Acts of the RK concerning the Reduction of Permits and Approvals and Optimisation of Controlling and Supervisory Functions of State Authorities"(hereinafter - the 'Law') was passed, coming into force from 7th August 2012.

This brief review describes the changes made by the Law to the legislative acts of Kazakhstan on licensing, as well as architecture, urban planning and construction activities.

1. Abolition of licensing for a number of activities in the area of industry, as well as architecture, urban planning and construction

Perhaps the most significant change was the abolition of licensing for certain activities and/or sub-activities, which previously required a license. 

Now more than 5 activities in the field of industry, design and constructioncan be performed without licenses. ( please see attachment to the Client Note)

2. Expanding the scope of the compulsory design and technical supervision 

Earlier, the Law 'On Architectural, Urban Planning and Construction Activities', dated 16 July 2001, stipulated obligatory design and technical supervision only for facilities which require approval from state acceptance committees in order to come into operation. Now, design and technical supervision is also required for objects to be accepted by the acceptance committee (which is not part of the State). 

3. Replacement of the permits for construction and installation works with arequired notice for the commencement of such works 

According to the Law of the Republic of Kazakhstan 'On Architectural, Urban Planning and Construction Activities', dated 16 July 2001, (new version), to perform construction and installation works the developer is now required only to notify the authorities of architectural-construction supervision upon the commencement of works (at least 10 business days prior to the start date), instead of obtaining the respective permit.   

In this case, the State Architectural and Construction Inspectorate is entitled to visit the site within five business days of receiving the notice and check the validity of the information specified in the notice.

4. Upgrading of administrative liability for violations in the construction areas

Monetary sanctions for violation of several articles of the Code of Administrative Violations (hereinafter - the 'Administrative Code') were increased.

For example according to Article 235 of the Administrative Code, construction without design documents or without examination of the project shall entail fines:  for legal entities which are small or medium business entities, - from 190 MCI (before amendments it was from 20 to 50 MCI), and for legal entities which are large business entities - 280 MCI (before amendments it was from 100 to 200 MCI).

Repeat violations of Article 235 of the Administrative Code occurring within one year of the imposition of an administrative sanction will result in dramatically increased fines and the suspension of construction.

In addition, two new articles were added to the Administrative Code

  • Article 235-1 - "Violation of the laws of Kazakhstan when performing expert works and engineering services" - experts may be subject to a fine of 100 MCI, and for a repeated violation - 200 MCI if advisory and engineering services are performed without an expert certificate;
  • Article 237-2 - "Performance of construction works without technical and design supervision" - establishes fines, the largest of which is 250 MCI to be imposed on large business entities.

In connection with the introduction of the notification procedure for the commencement of construction works the concept of liability for performing such works without having provided notice to the authorities responsible for architectural and construction supervision was inserted into the Administrative Code

5. Findings 

The Law aims to both reduce administrative barriers in the industry and construction area, and to improve the quality of design and construction.  This is expressed in the tightening of requirements for the construction process, as well as the assessment of projects and provision of engineering services.

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Attachment:

1.  Abolition of licensing for a number of activities: 

A) in the field of industry:

  • transmission and/or distribution of electric and/or thermal power;
  • processing of mineral raw materials; 
  • designing, manufacturing, assembling, chemical repair, drilling, oil-and-gas, geo-exploration, mining, metallurgical, power equipment, flame-proof electric technical equipment, lifting devices, boilers with an effective pressure of over 0.7; 
  • kg/cm2 and a coolant temperature of over 115оС and vessels and pipelines operating under the pressure of over 0.7 kg/cm2;
  • the sale of scrap ferrous and non-ferrous metals formed by legal entities in the course of their own production and as a result of the acquisition of a property complex, which included scrap and/or waste of ferrous and non-ferrous metals.

B) in the field of design:

  • architectural design for buildings, structures and communications of production (economic) purpose;
  • architectural design for housing and public buildings and facilities;
  • construction design of wooden structures;
  • automation of technological processes, including measuring and control, and accounting and control devices;
  • development of special sections of drafts on labour protection, arrangement of corrosion protection, lightning protection, automation devices, fire-alarm systems, fire suppression systems and fire protection systems at the design stage for new construction, repair, reconstruction or conversion of buildings and structures, development of estimates, drafting of construction projects and work plans.

C) in the field of construction:

  • completion of wells (except for oil and gas wells);
  • earthworks in hydro-ameliorative constructions and hydro-engineering works;
  • hydro-mechanical works in the ground;
  • installation of building structures, units, devices and other technological facilities of metallurgical, petrochemical, mining, energy, as well as other industries;
  • repair and reconstruction of industrial pipelines made of non-ferrous metals, plastics and glass;
  • repair and reconstruction of internal centralised systems of ventilation, air conditioning, pneumatic transport and aspiration;
  • chemical protection coating from aggressive waters, electrochemical protection and lightning protection);
  • installation of technological equipment, as well as start-up and adjustment works associated with lifting mechanisms and other shuttle-and-lift units; 
  • metallurgy, refining, metalworking, woodworking, exploration, oil and gas industry, mining production, subway and underground tunnels, processing and storing grain, the production and storage of other food products; 
  • coal, chemical and refining industries, production of light industry, production of medicines, medical supplies and medical equipment, health care,
  • rehabilitation and prevention of diseases, electric furnaces, as well as other electrical installations, including explosion-proof electrical equipment; compressors, pumps and ventilation apparatus.

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Any questions regarding the matters herein may be addressed to: 

Leila Makhmetova
Counsel
GRATA Law Firm
lmakhmetova@gratanet.com

Link to the article at Hieros Gamos

Leila Makhmetova

Counsel, Director of Environmental Law Department