Further Development Of The Competition Legislation In Kazakhstan

On 7 May 2015, amendments to certain legislative acts to improve Kazakhstan's legislation on natural monopolies and regulated markets, competition and development of the transport infrastructure were published. The Law of the Republic of Kazakhstan "On Amendments to Certain Legislative Acts of the RK Related to Natural Monopolies and the Regulated Market" will become effective upon the expiry of 10 calendar days following the official publication thereof (the "Amendments"). It substantially amends the RK Law "On Competition" (the "Law"). Please find below our summary of the most significant amendments.

1. Economic Concentration

   1. An increase in threshold values at which the consent of the antimonopoly body is required

      In accordance with the Law, the acquisition by a person (group of persons) of more than twenty-five percent of voting shares (participatory interests in the charter capital, stocks) of a market participant, if, prior to such acquisition, such person (group of persons) did not manage shares (participatory interests in the charter capital, stocks) of such market participant or managed twenty-five percent or less of voting shares (participatory interests in the charter capital, stocks) of such market participant, is deemed to be economic concentration and requires the prior written consent of the antimonopoly body.

      The Amendments increase the value of voting shares (participatory interests in the charter capital, stocks), the acquisition of which requires the consent of the antimonopoly body.

   2. Creation of a legal entity

      The Law contains an exhaustive list of transactions that are regarded as economic concentration and require the prior consent of the antimonopoly body. This list does not provide expressly for the creation of a market entity.

      However, in practice, the receipt by a market participant of more than twenty-five percent interest in the established legal entity was treated by the antimonopoly body as an economic concentration, upon reaching the established threshold. The antimonopoly body asserted that a person acquired shares (participatory interest, stocks) through the creation of a legal entity.

      The Amendments have clarified this issue. Pursuant to the Law, the above requirements do not apply to the founders of a legal entity being established. In other words, the creation of a legal entity is not deemed to be an economic concentration.

   3. Timeframe for consideration of applications

      The substantial decrease was made...