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LAW OF THE KYRGYZ REPUBLIC

of April 12, 2019 No. 45

About guarantee funds in the Kyrgyz Republic

Accepted by Jogorku Kenesh of the Kyrgyz Republic on March 7, 2019

This Law determines legal and economic basis of creation and activities of guarantee funds in the Kyrgyz Republic.

Chapter 1. General provisions

Article 1. The basic concepts and terms used in this Law

1. In this Law the following concepts and terms are used:

1) guarantee fund - the legal entity created in the form of joint-stock company, who underwent the procedure of accounting registration in National Bank of the Kyrgyz Republic (further - National Bank) and performing activities for the purpose of increase in availability of financing by provision of guarantees for subjects of the entrepreneurship aimed by them at business development, production expansion, acquisition and upgrade of fixed assets, implementation of new technologies, innovative activities and opening of the new companies. At the same time financing is understood loan granting and their substitutes, and also as the transactions/transactions performed according to the Islamic principles of financing;

2) financial credit institutions - banks, non-bank financial credit institutions which based on the licenses (certificates) of National Bank granted by it have the right to perform banking activities, and also the international organizations which are performing crediting (financing) of subjects of entrepreneurship and signed the agreement on cooperation with guarantee fund;

3) obligations of the subject of entrepreneurship - the obligations of the subject of entrepreneurship which arose within the financing received from financial credit institution and conforming to requirements of this Law;

4) guarantee - the commitment letter of guarantee fund to be responsible for obligation fulfillment of subjects of entrepreneurship before financial credit institution under agreements of financing;

5) regulations of provision of guarantees - the document approved by authorized body of guarantee fund and regulating procedure and conditions of provision of guarantees;

6) subjects of entrepreneurship - the physical persons who are engaged in business activity without formation of legal entity and the legal entities determined according to the tax legislation of the Kyrgyz Republic;

7) the client of guarantee fund - the subject of entrepreneurship which signed the contract on financing with financial credit institution from shares of warranty providing guarantee fund;

8) coefficient of the animator - the relation of possible excess of amount of guarantees of guarantee fund to the size of equity of guarantee fund established by National Bank;

9) warranty activities - the activities of guarantee funds directed to provision of guarantees to clients;

10) participants of guarantee funds are founders and shareholders of guarantee funds;

11) the recourse requirement - the right of guarantee fund to demand from the client of compensation of the amount paid to financial credit institution in obligation fulfillment under the agreement of guarantee.

2. Other terms and determinations used in this Law are understood according to their commonly accepted value in the legislation of the Kyrgyz Republic on National Bank, banks and banking activity and in the international practice if other is not determined by this Law.

Article 2. Name of guarantee fund

The guarantee fund shall use only that name which is provided in articles of organization and to use in the name of the word "Guarantee fund".

Article 3. Differentiation of responsibility of the Kyrgyz Republic, National Bank and guarantee funds

Guarantee funds do not answer for obligations the Kyrgyz Republic, as well as the Kyrgyz Republic does not answer for obligations guarantee funds, except as specified, when the parties voluntarily assume such obligations.

Guarantee funds do not answer for obligations National Bank. The National Bank does not answer for obligations guarantee funds.

Chapter 2. Form of business of guarantee funds. Activities of guarantee funds

Article 4. Creation of guarantee funds

1. Guarantee funds can be created by physical persons and legal entities in case of observance of requirements of this Law.

Cannot be participants of guarantee funds:

1) the physical persons and legal entities living and/or registered in the territory of offshore zones or having as members of the affiliates registered in offshore zones which list is established by National Bank.

Affiliates are recognized:

considerable members of the legal entity;

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