LAW OF THE REPUBLIC OF KAZAKHSTAN

of December 25, 2008 No. 112-IV ZRK

About the competition

This Law governs the public relations in the field of protection of the competition, restriction of monopolistic activities and protection of legitimate rights of consumers.

Section 1. Basic provisions

Chapter 1. General provisions

Article 1. Subject and purposes of this Law

1. This Law determines the legal basis of protection of the rights of subjects of the market and consumers from the monopolistic activities limited to this Law, anti-competitive actions of state bodies, local executive bodies and unfair competition. The law is directed to maintenance and creating favorable conditions for fair competition in the goods markets of the Republic of Kazakhstan.

2. The purposes of this Law are protection of the competition, creation of conditions for effective functioning of the goods markets, ensuring unity of economic space, free movement of goods and freedom of economic activity in the Republic of Kazakhstan.

Article 2. Antitrust law of the Republic of Kazakhstan

1. The antitrust law of the Republic of Kazakhstan is based on the Constitution of the Republic of Kazakhstan and consists of this Law and other regulatory legal acts of the Republic of Kazakhstan.

2. If the international treaty ratified by the Republic of Kazakhstan establishes other rules, than those which are provided by this Law then are applied rules of the international treaty.

Article 3. Scope of this Law

1. This Law acts on the territory of the Republic of Kazakhstan and extends to the relations which influence or can influence the competition in the goods markets of the Republic of Kazakhstan in which subjects of the market, consumers, and also state bodies, local executive bodies participate.

2. Provisions of this Law are applied also to the actions of the subject of the market made outside the territory of the Republic of Kazakhstan if as a result of such actions one of the following conditions is carried out:

1) the fixed assets and (or) intangible assets, or shares which are in the territory of the Republic of Kazakhstan (share in the authorized capital) subjects of the market, the property or non-property rights concerning legal entities of the Republic of Kazakhstan are directly or indirectly mentioned;

2) the competition in the Republic of Kazakhstan is limited.

Article 4. Principles of the competition

The basic principles of the competition are:

1) competitiveness;

2) conscientiousness;

3) legality;

4) observance of the rights of consumers.

The principles of the competition established by part one of this Article are applied equally, equally and on equal terms to all subjects of the market irrespective of form of business and place of registration of such subjects of the market.

Article 5. State policy in the field of the competition

1. The main directions of state policy in the field of the competition are developed by the Government of the Republic of Kazakhstan and are implemented by antimonopoly authority.

1-1. The antimonopoly authority develops offers on forming of state policy in the field of protection of the competition and restriction of monopolistic activities.

2. The central and local executive bodies take part in realization of state policy in the field of the competition within their competence determined by this Law and other legal acts of the Republic of Kazakhstan.

3. State bodies within the competence shall promote development of the competition and not make the actions which are negatively influencing the competition.

Article 6. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) affiliirovanny faces of legal entities, more than fifty percent of shares (share in the authorized capital) which belong to the state (further - affiliirovanny persons), - legal entities in whom more than fifty percent of shares (share in the authorized capital) directly or indirectly belong to legal entities, more than fifty percent of shares (share in the authorized capital) which belong to the state. Indirect accessory means accessory to each subsequent affiliirovanny person more than fifty percent of shares (share in the authorized capital) other legal entity;

1-1) potential competitors - the subject of the market which has opportunity (owns the equipment, technologies) to make and implement the goods similar or competitors, interchangeable with goods, but do not make and do not sell it in the corresponding goods market;

1-2) competitors - the subject of the market who is in competitiveness condition with other subjects of the corresponding market in view of the fact that makes and (or) sell in the corresponding goods market the goods similar or interchangeable with goods of subjects of the market;

2) the competition - competitiveness of subjects of the market in case of which their independent actions effectively limit possibility of each of them unilaterally to influence general terms of the goods circulation in the corresponding goods market;

2-1) anti-competitive horizontal agreements or coordinated actions (shipping conference) - the anti-competitive agreements or coordinated actions between the subjects of the market who are competitors or potential competitors in one goods market, specified in Item 1 of Article 10 and Item 1 of article 11 of this Law;

3) interchangeable goods - group of goods which can be comparable on their functional purpose, application, quality and technical characteristics to the price, and also in other parameters in such a way that the consumer replaces them with each other in the course of consumption (production);

3-1) indirect control - possibility of physical person or legal entity to determine the decisions made by the legal entity through the legal entity or several legal entities between whom there is direct control;

3-2) discrimination conditions - conditions of access to the goods market, conditions of production, exchange, consumption, acquisition, sale, other transfer of goods in case of which the subject of the market or several subjects of the market are put in unequal position in comparison with another (others) the subject (subjects) of the market;

4) the state monopoly - exclusive right of the state on the production, realization or purchase of any goods in the competitive market entered according to the procedure, provided by this Law;

5) monopolistic activities - activities of subjects of the market which provision gives the chance to control the corresponding goods market including allow to exert considerable impact on general terms of the address of goods in the corresponding goods market;

6) antimonopoly authority - the state body performing management in the field of protection of the competition and restriction of monopolistic activities, control and regulation of the activities referred to the sphere of the state monopoly;

7) monopoly position - provision of subjects of natural monopoly, the state monopoly, and also the subjects of the market occupying absolute share in the corresponding goods market;

8) the exclusive income - income gained by the subject of the market as a result of implementation of the monopolistic activities limited to this Law;

9) the subject of the market - physical person, and also the legal entity of the Republic of Kazakhstan, the foreign legal entity (its branch and representation) performing business activity. The non-profit organizations performing business activity according to their authorized purposes also treat subjects of the market;

10) the controlled markets - the goods markets in which state regulation of the prices according to the laws of the Republic of Kazakhstan is entered;

11)  No. 239-V ZRK is excluded according to the Law of the Republic of Kazakhstan of 29.09.2014

12) the seller (supplier) - the physical person or legal entity realizing (delivering) goods;

13) goods - the goods, work, service which are object of civil circulation;

14) the goods market - the sphere of turnover of goods or interchangeable goods determined proceeding from economic, territorial and technological capability of the consumer to acquire goods;

15) investigation - the actions of antimonopoly authority directed to collection of the actual data confirming or confuting making of antitrust violation of the Republic of Kazakhstan, according to the procedure, provided by this Law;

16) the consumer - the physical person or legal entity acquiring goods for own needs;

16-1) straight lines control - possibility of physical person or legal entity to determine the decisions made by the legal entity by means of one or several following actions:

implementation of functions of its executive body, Board of Directors;

receipt of the right to determine conditions of conducting business activity of the legal entity;

the order more than fifty percent of voting shares (shares in the authorized capital, shares) the legal entity;

17) the State register of the subjects of the market holding the dominating or monopoly position (further - the register), - the list of the subjects of the market holding the dominating or monopoly position in the corresponding goods market, except for the markets which are in condition of natural or state monopoly.

18) coordination of economic activity - approval of actions of subjects of the market by the third party who is not entering one group of persons with one of such subjects of the market and not performing activities in that goods market (goods markets) in which, (which) approval of actions of subjects of the market is performed.

Article 7. Group of persons

1. Group of persons is set of physical and (or) legal entities in relation to whom one of the following conditions is carried out:

1) person has the right directly or indirectly (through the third parties) to dispose more than fifty percent of voting shares (shares in the authorized capital, shares) the legal entity;

2) the legal entity or several affiliirovanny legal entities have opportunity to determine the decisions made by other person including to determine conditions of conducting business activity by this person or to perform powers of governing body;

3) physical person, his spouse (-and), close relatives have opportunity to determine the decisions made by other person including to determine conditions of conducting business activity by this person or to perform powers of governing body;

4) persons, each of which on any specified in subitems

1)-3) of this Item to the basis enters into group with the same person, and also other persons entering with each of such persons into one group on the basis specified in subitems to any 1)-3) of this Item.

2. The group of persons is considered as the single subject of the market. The provisions of this Law relating to subjects of the market extend to group of persons.

Section 2. Monopolistic activities. Unfair competition

Chapter 2. Monopolistic activities

Article 8. Types of monopolistic activities

Treat the monopolistic activities limited to this Law:

1) anti-competitive agreements of subjects of the market;

2) anti-competitive coordinated actions of subjects of the market;

3) abuse of the dominating or monopoly position.

Article 9. Types of anti-competitive agreements and coordinated actions

1. Anti-competitive agreements or coordinated actions between the subjects of the market who are competitors or potential competitors in one goods market are horizontal.

2. Anti-competitive agreements between not competing subjects of the market, one of which acquires goods or is his potential acquirer, and another provides goods or is his potential seller (supplier), are vertical.

Article 10. Anti-competitive agreements

1. Horizontal agreements between subjects of the market which infringe at legitimate rights of consumers are prohibited and (or) bring or can bring to:

1) to establishment or maintenance of the prices (rates), discounts, allowances (surcharges), markups;

2) to increase, decrease or maintenance of the prices at the biddings, to misstatement of results of the biddings, auctions and tenders, including by the Section on lots;

3) to the Section of the goods market by the territorial principle, sales amount or purchases of goods, to the range of implementable goods or the list of sellers or buyers (customers);

4) to reducing or cessation of production of goods;

5) to refusal of the conclusion of agreements with certain sellers or buyers (customers).

2. Vertical agreements between subjects of the market are prohibited if:

Agreements give 1) or can lead to price fixation of resale of goods, except for case when the seller establishes maximum price of resale of goods for the buyer;

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