Kazakhstan's Accession To The WTO: New Local Content Requirements

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

1. Local content in goods

Newly concluded subsoil use contracts shall not contain any requirements related to: local content in goods; or support of Kazakhstan producers (for example, the existing requirement for a conditional reduction of bids received from Kazakhstan producers of goods by 20% 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 & services

The minimum local content of works & services in the newly concluded subsoil use contracts shall not exceed 50%. The minimum local content of works & 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% over the next 5 years (according to the terms of Kazakhstan's accession to the WTO ). The following requirements remain in effect: Kazakhstan producers of works & services must be granted a putative 20% reduction in the price of their bids during the tender procedure; Subsoil users and their contractors shall purchase works & services from Kazakhstan producers...