Document from CIS Legislation database © 2003-2022 SojuzPravoInform LLC

LAW OF THE KYRGYZ REPUBLIC

of April 10, 2002 No. 49

About production sharing agreements in case of subsurface use

Accepted by General Court of Jogorku Kenesh of the Kyrgyz Republic on March 11, 2002

This Law establishes the legal basis of the relations arising in the course of implementation of domestic and foreign investments in search, investigation and development of mineral deposits in the territory of the Kyrgyz Republic on the terms of the production sharing agreements signed according to this Law.

Chapter I General provisions

Article 1. The relations regulated by this Law

1. This Law governs the relations arising in the course of the conclusion, execution and the termination of production sharing agreements and determines the main legal conditions of such agreements.

2. The relations which are not settled by this Law, including arising in the course of use of the earth and other natural resources are regulated by the relevant laws.

3. The relations arising in the course of search, investigation and development of mineral deposits, the Section of the made products, and also its transportation, processing, storage, conversion, use, realization or the order otherwise are regulated by the production sharing agreement signed according to this Law.

The rights and obligations of the Parties of the production sharing agreement having civil nature are determined according to this Law and the civil legislation of the Kyrgyz Republic.

4. If legal acts of the Kyrgyz Republic determine other rules, than those which are provided by this Law, in the field of regulation of the relations specified in Item 1 of this Article rules of this Law are applied.

Article 2. Production sharing agreement

1. The production sharing agreement (further - the agreement) is the agreement according to which the Kyrgyz Republic provides to the subject of business activity (daleeinvestor) on paid basis and for certain term exclusive rights on search, investigation, development of mineral deposits on the subsoil plot specified in the agreement and on conducting the works connected with it, and the investor shall perform carrying out the specified works at own expense and on the risk. The agreement determines all necessary conditions connected with use of natural resources including conversions of the extracted mineral raw materials, condition and procedure for the Section of the made products between agreement parties according to provisions of this Law.

2. The conditions of use of natural resources established in the agreement shall correspond to the legislation of the Kyrgyz Republic.

Right to use by the subsoil plot can be limited, suspended or stopped under the terms of the agreement signed according to the legislation of the Kyrgyz Republic.

3. The agreements signed before entry into force of this Law are subject to execution according to the conditions determined in them. At the same time provisions of this Law are applied to the specified agreements in that measure in what its application does not contradict conditions of such agreements and does not limit the rights acquired and performed by investors according to these agreements.

Article 3. Agreement parties

Agreement parties (further - the parties) are:

The Kyrgyz Republic (further - the state) on behalf of which in the agreement the Government of the Kyrgyz Republic or state bodies authorized by it acts;

investors - the physical persons and legal entities of the Kyrgyz Republic, foreign physical persons and legal entities performing investment of own, loan or raised funds in search, exploration and production of mineral raw materials and being subsoil users on terms of agreement.

Article 4. Use of subsoil plots on the terms of the Section of products

1. The mineral right on the terms of the Section of products is granted to the investor based on the agreement signed according to this Law.

2. The subsoil plot is provided in use to the investor in accordance with the terms of the agreement. At the same time the license to use is issued by the subsoil plot which certifies right to use by the subsoil plot specified in the agreement to the investor after agreement signature according to the procedure, established by the legislation of the Kyrgyz Republic. The license is granted on the duration of the agreement and is subject to prolongation or renewal or voids in accordance with the terms of the agreement.

3. If the consolidation of legal entities which does not have the status of the legal entity acts as the investor, the license specified in Item 2 of this Article is issued to one of participants of such consolidation with indication of in this license that this participant acts on behalf of this consolidation, and also with indication of all other participants of consolidation.

Article 5. Duration of the agreement

1. The duration of the agreement is established by the parties independently, but not over 10 years.

2. At the initiative of the investor, and also on condition of accomplishment of the assumed liabilities by him operation of the agreement is prolonged for the term sufficient for completion of economically reasonable mining, ensuring rational use and protection of subsoil. At the same time conditions and procedure for such prolongation are determined by the agreement. In case of prolongation of operation of the agreement the license to use specified in Item 2 of article 4 of this Law subsoil is subject to renewal on the duration of the agreement by the state body on subsurface use which granted this license.

Chapter II Conclusion and execution of agreements

Article 6. Procedure for agreement signature

1. The agreement is signed by the Government of the Kyrgyz Republic or the state body authorized by it with the winner of the tender or auction held according to the procedure, established by the legislation of the Kyrgyz Republic, and in the terms coordinated by the parties, but not later than in 6 months from the date of the announcement of results of tender or auction, except as specified, stipulated in Item 2 these Articles.

Participation of business entities of the Kyrgyz Republic in implementation of the agreement in the shares determined by the Government of the Kyrgyz Republic shall be provided by conditions of tender or auction.

Concerning the subsoil plots located in the territories of traditional environmental management, payment of the corresponding compensations for violation of the mode of traditional environmental management shall be provided by conditions of tender or auction or out-of-competition provision of subsoil plots.

Tender or auction is carried out by the state bodies authorized by the Government of the Kyrgyz Republic according to the rules determined by the Government of the Kyrgyz Republic.

2. In some cases according to the decision of the Government of the Kyrgyz Republic the agreement can be signed without carrying out tender or auction under condition:

- if interests of defense and safety of the state require agreement signature with the specific investor;

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