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LAW OF THE KYRGYZ REPUBLIC

of August 8, 2011 No. 149

About natural monopolies in the Kyrgyz Republic

Accepted by Jogorku Kenesh of the Kyrgyz Republic on June 30, 2011

(as amended on 17-05-2019)
Article 1. Law purposes

This Law determines the legal basis of state policy concerning natural monopolies in the Kyrgyz Republic and is directed to achievement of the balance of consumer interests and subjects of natural monopolies providing availability of the goods (works, services) for consumers realized by them, and also effective functioning of subjects of natural monopolies.

Article 2. Scope of the Law

This Law extends to the relations arising in the markets of the Kyrgyz Republic in which subjects of natural monopolies, consumers, state bodies and local government bodies participate.

Control of economically justified transition of spheres of natural monopolies to condition of the competitive market is not allowed.

Article 2-1. Spheres of natural monopolies

Spheres of natural monopolies are recognized:

1) oil transportation and oil products on bulk distribution lines;

2) transportation, distribution, storage and sale of natural gas;

3) production, distribution, sale, transfer of electrical and heat energy;

4) services in supervisory control of national power supply system;

5) centralized water supply and water disposal;

6) services of telecommunication and mail service public:

7) rail haulings;

8) aeronautical ensuring flights;

9) land servicing of domestic airborne transportations.

Article 3. Determination of the basic concepts

For the purposes of this Law the following basic concepts are applied:

the state register of subjects of natural monopolies - the list of the business entities who are subject to state regulation and control on republican and the regional (local) markets;

natural monopoly - market situation of goods (works, services) in case of which creation of competitive conditions for satisfaction of demand for certain type of goods (works, services) is impossible or economically inexpedient owing to technology features of production and provision of this type of goods (works, services);

goods - object of the civil laws (including work, service), held for sale, exchange or other introduction into circulation;

the subject of natural monopoly - the business entity (legal entity) occupied with production (realization) of goods in the conditions of natural monopolies;

the sphere of natural monopolies - the sphere of the goods circulation (works, services) carried by this Law to natural monopoly in which the consumer can acquire goods (work, service) subjects of natural monopolies;

the consumer (subscriber) - the physical person or legal entity acquiring, using or intending to use the goods or services made (implemented) by the subject of natural monopoly;

limit of the price (rate) - the maximum size of the price (rate) for regulated goods, work, services of the subject natural monopolies;

the head of the subject of natural monopoly - person, authorized to act without power of attorney on behalf of the subject of natural monopoly;

the price (rate) - monetary value of cost of regulated goods (works, services) of the subject of the natural monopoly established according to the procedure, determined by the Government of the Kyrgyz Republic;

the passport of business entity - indicators about income and expense items, about amounts of regulated goods (works, services) and other economic indicators of activities of the subject of natural monopoly by regulated goods (works, services) in the form approved by authorized body;

authorized body - the executive bodies authorized by the Government of the Kyrgyz Republic on carrying out state policy in the field of regulation of natural monopolies, development of the competition, restriction, suppression of monopolistic activities and unfair competition;

services - the activities directed to satisfaction of own requirements or needs of other persons, including any purchases of goods, works, raw materials and materials;

the domestic market - the sphere of the goods circulation (services) in which borders the consumer can acquire goods (services) of subjects of natural monopolies;

long-term parameters of regulation - the parameters necessary for calculation of long-term rates established for the long-term period of regulation;

the long-term period of regulation - the period to which long-term parameters of regulation are set, constituting at least 3 years;

access to services of subjects of natural monopolies - ensuring access to services of subjects of natural monopolies of the Kyrgyz Republic by subjects of natural monopolies of foreign states, according to the international treaties which came in the procedure established by the law into force which participant is the Kyrgyz Republic;

the invested capital - the capital which was used for creation of assets of subjects of the natural monopolies necessary for implementation of regulated activities;

the income - inflow, growth of assets (money, other property) or reduction of obligations, involving increase in equity of the subject of natural monopoly, except for deposits of participants.

Article 4. Principles of state regulation of activities of subjects of natural monopolies

The basic principles when implementing state regulation of subjects of natural monopolies are:

1) respect for the balance of consumer interests and subjects of natural monopolies providing availability of the rendered services and proper level of their quality to consumers, effective functioning and development of subjects of natural monopolies;

2) increase in efficiency of the regulation directed to reducing in subsequent spheres of natural monopolies due to creation of conditions for competition development;

3) application of flexible price (tariff) regulation of subjects of natural monopolies taking into account industry features, scales of their activities, market conditions, mid-term (long-term) macroeconomic and industry forecasts, and also measures of price (tariff) regulation of these subjects;

4) introduction of state regulation in cases when based on the analysis of the corresponding domestic market it is determined that this market is in condition of natural monopoly;

5) application of procedures of regulation of activities of subjects of the natural monopolies providing independence of the made decisions, succession, openness, objectivity and transparency;

6) decrease in barriers of access to the markets of services, including by ensuring access to the services relating to the sphere of natural monopolies;

7) ensuring compliance of the established prices (rates) to service quality in the field of natural monopolies;

8) creation of economic conditions under which it is profitable to subjects of natural monopolies to reduce costs, to implement new technologies, to increase efficiency of use of investments;

9) receipt of economically reasonable profit;

10) forming of rates (prices) of services of subjects of natural monopolies taking into account reliability and quality of the rendered services;

11) implementation of actions for energy efficiency and ecological aspects;

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