ANNOUNCEMENT 05 Jun 2012In June 2012, the government of Kazakhstan announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
5 2012 744
On 5 June 2012 the Government of the Republic of Kazakhstan approved Decree No. 744. It contains conditions for provision of warranties and guarantees, related to loans, issued to entities that undertake industrial and innovative activities. The latter concept has been scheduled for approval by Law No. 534-IV of the Government of the Republic of Kazakhstan fn 9 January 2012 (see point 2 of the related GTA Report No. 10947).
Decree No. 744 stipulates that the warranties and guarantees must not exceed 20 years and that the state-supported guarantees and warranties must not exceed 80% of the whole project costs. Decree No. 744 does not set an upper limit to the projects. Nor does it allocate financial state support. Therefore, since it creates only framework of rules on which basis is to be organised the concrete allocation of guarantees and warranties for industrial innovative activities, it has been coded by the GTA as amber. Furthermore, since Decree No. 744 is based on Law No. 534-IV of the Government of the Republic of Kazakhstan fn 9 January 2012, the same priority sectors as in it have been indicated as affected sectors.
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.