Activities of the Committee for International Affairs, Defence and Security of the Majilis of Parliament, 2002
Deputy Sharip Omarov, Chairman of the Committee for International Affairs, Defence and Security of the Majilis of Kazakhstan’s Parliament, Answers Questions from our magazine
Was the year 2002 successful for the Committee for International Affairs, Defence and Security?
Last year the Committee held 38 sessions, during which a number of draft acts and international agreements were studied and passed to the Majilis of Parliament for consideration. The following were the most important for investors:
• On Ratification of the Articles of Association of the Islamic Corporation for Insurance of Investment and Export Credit. The objective of the organization, which is a daughter institution of the Islamic Development Bank, is to enhance trade transactions and investment flows between the Organisation of Islamic Conference countries through investment insurance and export loans.
• On Ratification of the Framework Agreement on the Institutional Base for Creating an Inter-State Oil and Gas Transport System. This Agreement, developed under the INOGATE programme, aims to establish common rules and mechanisms for the effective operation of the inter-state oil and gas transport system. It sets out the basic principles, regulations and procedures necessary for implementing the Agreement and protecting the interests of third parties operating in compliance with the institutional basis established by the Agreement.
The document binds its parties to co-operate in order to create, under mutually acceptable terms, inter-state oil and gas transport systems. It will be necessary to restore the existing systems and construct new ones, and ensure that they operate and are maintained properly.
Not only does the agreement envisage guarantees on transport infrastructure security, but it also lays down the main obligations of the parties as regards environmental protection. With its detailed and clear approach to the relations between the parties during creation and operation of the inter-state oil and gas transport system, the Agreement will create conditions conducive to boosting Kazakh energy exports.
International experience demonstrates that no structural reform of an economy is possible without a well-targeted state investment policy. Therefore passing the Law On Investment in early 2003 is of special importance. This act, which has been considered at various levels over two years, provides equal guarantees for foreign and domestic investors. Its goal is to improve the state investment support system and create a more logical investment preference mechanism. It also defines the procedure for settling disputes at arbitration courts. In all, the law is the action that our country is taking to maintain a favourable investment climate. However, foreign capital is not always effective as leverage for development of the home economy, as it is largely directed towards extractive industries. Therefore it is vital that investment in manufacturing, processing and small and medium-sized businesses is encouraged.
How many bilateral investment agreements and agreements on elimination of double taxation have been ratified?
So far Kazakhstan has signed 32 bilateral investment agreements. 30 of these have come into effect. 36 agreements have been signed on avoiding double taxation and preventing tax evasion as regards income and capital tax. 34 of these are now effective. These agreements aim to create a situation under which a taxpayer only has to pay tax once: in just one of the contracting states.
In all, 540 draft acts have arrived with the Majilis of Parliament since December 1999. 390 of them have been considered, passed by the chamber and filed with the Senate. 172 international acts were ratified after revision and research by the Committee for International Affairs, Defence and Security.
Could you please talk about the procedure for ratifying international agreements by the Parliament of Kazakhstan? What is the role of your Committee in this process?
Kazakhstan’s accession to the Vienna Convention on the Law of Treaties in 1993 (this applies to treaties between states and is irrevocable) was one of the first moves to integrate with the international community. Article 4 of the Constitution holds that international treaties ratified by the country have priority over local legislation and are applied directly, except when a treaty requires a special act to apply it.
Currently the Law On the Procedure for Signing, Executing and Denouncing International Treaties by Kazakhstan1 is the basic legal and standard act regulating the signing and execution of treaties. Those international treaties that are not subject to ratification are defined by the President and Parliament. The Foreign Ministry is charged with general supervision over the execution of international treaties.
1. Presidential enactment #2679 having the force of law On the Procedure of Signing, Executing and Denouncing International Treaties of Kazakhstan of 15th December 1995.
Treaties are ratified or denounced by Parliament: issues are considered in stages, first by the Majilis and then by the Senate.
All treaties are directed to the Committee for International Affairs, Defence and Security. One of the Committee members is assigned to study the document at a session of the Committee. That person then has to set up a working group and take control of it. The drafts are considered in open Committee. The working group comprises deputies from other committees, the initiators of the draft act, representatives from state authorities and public associations, researchers, experts and other interested persons. The head of the working group may request additional information related to the treaty presented for ratification or rejection from related state bodies, and encourage independent experts to participate in assessing the information and the text of the treaty. Having received the relevant conclusions from standing committees of the Majilis and the Legislation Department of the Majilis office, the Committee will pass the treaty and their conclusion to the Chamber Bureau for consideration. The latter will decide whether to include consideration of this document on the agenda of the Majilis plenary session. As and when the Majilis approves the resolution to pass ratification or denouncement of a treaty, it will file a resolution, signed by its Chairman, to the Senate. The document will pass through a similar procedure there to that in the Majilis.
How is the legislation package presented for consideration by the Majilis of Parliament formed? Can committee representatives change it?
Under the Constitution of Kazakhstan, parliamentarians and the Government enjoy the right of legislative initiative. However, this right is realized only in the Majilis where the Government passes draft laws for consideration. These drafts include documents envisaging amendments to existing legislation.
The draft government plan compiled by the Justice Ministry comes with a reference document substantiating the necessity for developing one or another draft act. In the event that the plan needs to include draft acts related to taking up membership in international organizations, withdrawing from them or acceding to treaties, a conclusion by the Expert Council is required.
It should be noted that the initiators of the draft act (deputies and the Government) have the right to withdraw it at any stage of consideration. Exclusion of draft acts from a current annual plan or amendments to this plan are given preliminary consideration (on an application by the initiator of the draft act) at a session of the Interdepartmental Committee.
Foreign advisors point out that laws are passed in Kazakhstan without them being discussed with representatives of businesses whose interests they touch on. What is your opinion?
I have already mentioned that drafts are discussed openly at the Committee. A working group is set up which also includes the initiators of a draft, representatives from ministries, researchers and experts. Law-making is covered by the mass media. In addition, any interested person can receive full information from the Committee in charge of one or another draft. Therefore I believe that businessmen must make a stronger commitment to the law-making process and participate actively in consideration of drafts without sitting and waiting for an invitation. It is my position that not only those lobbying for draft acts, but also their opponents, should take part in the legislative process. Only then will the laws passed be effective and economically sound.
Investors are not always aware whether certain conventions and treaties have been ratified. Is this information available officially?
I would like to remind readers that, in compliance with the law, international treaties ratified by our country come into effect as provided in the treaties themselves or by co-ordination between the contracting parties.1
1. Presidential enactment #2679 having the force of law On the Procedure of Signing, Executing and Denouncing International Treaties of Kazakhstan of 15th December 1995.
Information on ratification of various treaties is contained in the digest of presidential and government enactments and the Bulletin of International Treaties, Agreements and Individual Legal Acts of Kazakhstan. Laws that have been passed are published in the newspapers Kazakhstanskaya Pravda, Yegemendi Kazakhstan and other official mass media.
Table of contents
ChevronTexaco: Turning Partnership into Energy Guy Hollingsworth
Kazakhstan’s Membership of the WTO: Problems, Consequences and Prospects Kenzhegali Sagadiyev
The Use of Subsoil Resources in Kazakhstan. Results for the Year 2002 Elvira Dzhantureyeva
Imstalcon: Domestic Producers Need State Support! Vladimir Khoroshilov
Activities of the Committee for International Affairs, Defence and Security of the Majilis of Parliament, 2002 Sharip Omarov
Germany and Kazakhstan: Problems and Prospects for Economic Co-operation Galiya Dzhunusaliyeva
Investing in Kazakhstan – Opportunities and Threads for German Investors Michael F. Krause
Legal Regulation of Investment Activities in Kazakhstan Askar Batalov
A Summary Review of the Kazakhstan Law On Investments Andrew Griffin, Karen Ostrander-Krug
Tax burden in Kazakhstan Janat Berdalina, Aigul Mustapaeva
