Global Trade Alert

On 9 July 2012 the Government of the Republic of Kazakhstan approved Decree No. 922. It contains rules for partial reimbursement of expenses of beneficiaries that develop industrial-innovative activity and promote domestically-produced goods, works and services on the internal market ('the Beneficiaries').
 
The Beneficiaries can obtain a reimbursement of up to 50% of the sum they request, but not more than 3000 times the monthly calculation index. In 2012 this index was at the amount of 1 618 tenge (10.84 USD). In summary, a Beneficiary may obtain (50%*3000*10.84) = 32,522 USD at the same time. No global amount of state support is disclosed. However,there is no upper limit on the Beneficiaries that may participate as long as they comply with the rules. Therefore, the GTA reports this case.
The decree does not contain an explicit local content rule. Therefore, it is classified as a bail-out.

The concrete activities for which the Beneficiaries can obtain partial state reimbursement are services related to certification of goods, woks and services under systems for quality management. The 3rd provided source gives as examples ISO, API and ASTM.

The priority sectors for which partial compensation is foreseen in the decree are:

• Manufacture of agricultural and forestry machinery
• Manufacture of motor vehicles, trailers and semi-trailers
• Manufacture of glass and glass products
• Production of ceramic coating and plates
• Manufacture of bricks, tiles and construction products, in baked clay
• Manufacture of other wooden building constructions and joiner's products
• Manufacture of refractory products
• Manufacture of building plastic products
• Manufacture of paper and paper products
• Furniture
• Food production
• Services on organization of accommodation
• Services for providing food and drinks
• Other types of catering
• Manufacture of explosives
• The production of refined products
• Production of cement, lime and plaster
• Manufacture of articles of concrete, cement and gypsum for construction purposes
• Manufacture of other types of special purpose machinery
• Production of computers, electronic and optical products
• Electrical equipment manufacturing
• Manufacture of machinery for general purposes
• Manufacture of other general purpose machinery
• Manufacture of motor vehicles, trailers and semi-trailers
• Manufacture of other transport equipment
• Textiles
• Apparel manufacturing
• Manufacture of leather and related products
• Manufacture of chemicals and chemical products
• Manufacture of basic pharmaceutical products
• Manufacture of rubber and plastic products
• Production of pipes, pipelines, profiles, fittings of steel
• Manufacture of other steel products by primary processing
• Cold rolling of strips and narrow strips
• Cold forming or folding
• Wire production by cold drawing
• Manufacture of basic precious and non-ferrous metals
• Casting of metals
• Manufacture of fabricated metal products, except machinery and equipment
• Repair and installation of machinery and equipment
• Construction of buildings
• Specialised construction activities
• Exploration drilling
• Technical services in the field of oil and natural gas.

 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.