Significant Amendments Expected To Legislation Regarding State Regulation Of Strategic Economy Sectors In Kazakhstan

Strategic economic sectors include the following: production of hydrocarbons, minerals, processing of minerals (coal, petroleum, gas, uranium and metal ore), production and circulation of petroleum products, ferrous and non-ferrous industry, mechanical engineering, space engineering, agricultural complex, water industry, chemical industry, transport and communication, production and distribution of electricity, and defense.

Previous legislation already identified those sectors of the economy considered to be 'strategic'. However, that list was not linked to any restrictive measures or controls by the state.

The main purpose of the suggested amendments and modifications is a substantial extension of state control over foreign investments in the abovementioned sectors by means of the following:

The introduction of a system for tracing foreign participation in the strategic economic sectors, up to the level of ultimate beneficiaries. It is proposed that a definition of a beneficial owner of a monitored object will be introduced, i.e. owner of any company working in a strategic economic sector. Another proposed amendment envisages an obligation an a company to submit to an authorized state body information about its ownership structure, as well as information about the entire chain of ownership, up to the level of ultimate beneficiaries. The introduction into antimonopoly legislation of a requirement to obtain an approval (opinion) of the authorized state body as to whether a contemplated transaction is in the interests of the respective economic sector (as part of [an application for approval for] economic concentration). Through amendments to subsoil use...