New Kazakhstan Law On Payments And Payment Systems

On 26 July 2016, a new Law of the Republic of Kazakhstan No. 11-VІ "On Payments and Payment Systems" (the Law on Payments) was adopted. Save for a number of certain provisions, the new Law on Payments comes into force on 10 September 2016 and will completely substitute the existing Law of the Republic of Kazakhstan No. 237-І "On Payments and Money Transfers" dated 29 June 1998.

The new Law on Payments has been drafted by the National Bank of the Republic of Kazakhstan in order to: (a) commence regulation of the activities of operators of instant payment systems, and (b) align the national legislation on payment systems with the international standards.

For convenience, all provisions of the new Law on Payments can be divided into two large parts. The first part sets forth a legal framework for the functioning of payment systems and provision of payment services in Kazakhstan. The second part deals with payments and money transfers per se, including those which are made with payment cards and electronic money.

In particular, the first part of the Law on Payments envisages, inter alia, the following:

Definition of the terms "payment system", "operator of a payment system", and "participant of a payment system"; General requirements for the establishment and functioning of payment systems; Types of payment systems, criteria and methods for determining the significance of payment systems; Requirements for operators and participants of payment systems; Types of providers of payment services, as well as the types of, and general parameters for rendering, payment services; Procedures for the establishment and the registration of (non-banking) payment organizations, as well as the status and the functions of such organizations in the process of rendering payment services; Competence of the National Bank of the Republic of Kazakhstan in connection with the regulation of and control over the payment systems and the market of payment services. Thus, unlike the previous law, the new Law on Payments sets forth a detailed legal regime for the field of the payment systems and for the payment services market. The provisions of the new Law on Payments will allow, inter alia, the establishment of a state control over the activities of non-banking payment organizations and will oblige operators of the payment systems, including the operators of the foreign payment systems, to comply with the unified "rules of the game" adopted on the Kazakhstan market.

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