Kazakhstan's Accession To The World Trade Organization: New Local Content Requirements

On 9 November 2015, in connection with Kazakhstan's accession to the WTO, amendments to the subsoil use legislation came into force and significantly altered the existing local content requirements. Below we summarize the key changes to the requirements for local content in goods, works and services and for personnel.

  1. Local content in goods

Newly concluded subsoil use contracts shall not contain any requirements related to: Local content in goods. Support of Kazakhstan producers (for example, the existing requirement for a conditional reduction of bids received from Kazakhstan producers of goods by 20 percent when determining the winner of a tender). There is a transitional period for subsoil use contracts concluded before 1 January 2015. Any requirements in such contracts regarding the local content in goods and the support of Kazakhstan producers are effective only until 1 January 2021. If the term of a subsoil use contract concluded before 1 January 2015 is amended, the "local content in goods" requirements existing thereunder shall be excluded. 2. Local content in works and services

The minimum local content of works and services in the newly concluded subsoil use contracts shall not exceed 50 percent. The minimum local content of works and services in existing subsoil use contracts which were concluded during the period from September 2011 to the date of Kazakhstan's accession to the WTO, shall be decreased down to 50 percent over the next five years (according to the terms of Kazakhstan's accession to the WTO ). The following requirements remain in effect: Kazakhstan producers of works and services must be granted a putative 20 percent reduction in the price of their bids during the tender procedure. Subsoil users and their contractors shall purchase works nd services from Kazakhstan producers, provided that they satisfy the requirements of design documents and Kazakhstan law on technical regulation. The term "Kazakhstan producer of works and services" means individual entrepreneurs and Kazakhstan legal entities, where at least 95 percent of all employees are citizens of Kazakhstan, without taking into account managers and specialists engaged in labor activities in Kazakhstan within...

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