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ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of April 18, 2014 No. 379

About approval of Rules of subsidizing of rates of remuneration according to credit and leasing obligations of subjects of agro-industrial complex for financial improvement

According to article 11 of the Law of the Republic of Kazakhstan of July 8, 2005 "About state regulation of development of agro-industrial complex and the rural territories" and article 15 of the Law of the Republic of Kazakhstan of December 3, 2013 "About the republican budget for 2014-2016" the Government of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Rules of subsidizing of rates of remuneration according to credit and leasing obligations of subjects of agro-industrial complex for financial improvement.

2. Declare invalid the order of the Government of the Republic of Kazakhstan of August 9, 2013 No. 816 "About approval of Rules of subsidizing of rates of remuneration according to credit and leasing obligations of subjects of agro-industrial complex for financial improvement" (SAPP of the Republic of Kazakhstan, 2013, No. 48, the Art. 671).

3. This resolution becomes effective since January 1, 2014 and is subject to official publication.

Prime Minister of the Republic of Kazakhstan

K. Masimov

Approved by the Order of the Government of the Republic of Kazakhstan of April 18, 2014 No. 379

Rules of subsidizing of rates of remuneration according to credit and leasing obligations of subjects of agro-industrial complex for financial improvement

1. General provisions

1. These rules of subsidizing of rates of remuneration according to credit and leasing obligations of subjects of agro-industrial complex (further - the AIC) (further - Rules) are developed for financial improvement according to the Development program of agro-industrial complex in the Republic of Kazakhstan for 2013-2020 (Agrobusiness-2020) approved by the order of the Government of the Republic of Kazakhstan of February 18, 2013 No. 151, and determine procedure and conditions of subsidizing of rates of remuneration on credit and leasing obligations of subjects of the AIC.

2. Main objectives of financial improvement are solvency improvement, decrease in credit loading and risk minimization of bankruptcy of subjects of the AIC.

2. Terms and determinations

3. In these rules the following terms and determinations are used:

1) administrator - Ministry of Agriculture of the Republic of Kazakhstan.

For the purpose of optimization of the taxation the administrator is recognized the tax agent to whom the obligation on calculation, deduction and transfer of the taxes withheld at payment source is assigned;

2) the borrower - the subject of the AIC who is performing activities in the field of agro-industrial complex, including realization of agricultural products and having credit/creditor and leasing obligations;

3) the commission on financial improvement - the collegiate organ consisting of representatives of the interested state bodies, the Majilis of Parliament of the Republic of Kazakhstan (under approval), financial institutions (under approval) and non-governmental organizations (under approval), in structure according to appendix 1 to these rules;

4) credit and leasing obligations - obligations of the borrower concerning which application of measures of financial improvement within these rules, arisen before financial institutions in connection with receipt of the credit for replenishment turnover, acquisition of fixed assets and construction is possible, and also on refinancing of the debt which arose in connection with receipt of credit/leasing on the above-stated purposes including to other financial institutions, obtaining in leasing of the agricultural, special machinery, processing equipment;

5) creditor obligations - the obligations of the borrower which arose before other business entities in connection with replenishment turnover, acquisition of fixed assets, obtaining in leasing of the agricultural and special machinery, processing equipment, and also refinancing of obligations to other creditors;

6) creditor committee - the commission created of representatives of financial institutes creditors with possibility of inclusion of the representative of the relevant industry association for each certain borrower;

7) operator - the Kazagromarketing joint-stock company attracted as the specialized organization in the field of agro-industrial complex based on the agreement on rendering services of the operator in subsidizing of rates of remuneration on credits/leasing of financial institutions to financial improvement of subjects of the AIC;

8) the decision of the Commission on financial improvement - the decision on approval/disapproval of financial improvement concerning the borrower;

9) restructuring of credit and leasing obligations - increase in terms of return, change of procedure and priority of repayment of payments, change of rate of remuneration, and also providing grace period on repayment available for borrowers to credit and leasing obligations;

10) refinancing of credit/creditor and leasing obligations - providing to borrowers new purpose-oriented loans, or substitution of earlier loans by the conclusion of supplementary agreements with long-term terms of return, low interest rate of remuneration and grace period on repayment of the available debts;

11) subsidizing of rate of remuneration - the form of the state support of subjects of the AIC used for partial expense recovery, paid by the borrower to financial institution as remuneration according to credit and/or leasing obligations;

12) means of funding - the raised borrowed funds of the financial agent provided to financial institutions for the subsequent restructuring / refinancing of credit and leasing obligations of borrowers;

13) processing equipment - the equipment on production and conversion of agricultural products consisting of the equipment of direct assignment and auxiliary without which participation the complete production cycle cannot be provided;

14) financial improvement - restructuring, refinancing of credit/creditor obligations of the borrowers used on replenishment turnover, acquisition of fixed assets and construction, obtaining in leasing of processing equipment, agricultural machinery, and also refinancing of the debt which arose in connection with receipt of credit/leasing on the above-stated purposes with support from the state in the form of subsidizing of rate of remuneration;

15) financial institutions - banks of the second level; the organizations performing separate types of banking activities; credit partnerships in the field of the AIC; microfinancial/microcredit institutions; the legal entities with absolute participation of the state performing credit and leasing activities in the field of the AIC; the leasing companies performing activities in the field of the AIC;

16) the financial agent - joint-stock company "National managing holding "Kazagro".

3. General terms of financial improvement

4. Credit/creditor/leasing obligations of borrowers on replenishment turnover, construction and acquisition of fixed assets, and also obtaining in leasing of processing equipment, agricultural machinery are subject to restructuring and refinancing.

5. The credit/creditor/leasing obligations which arose till January 1, 2014 are subject to restructuring and refinancing.

6. Subsidizing of rate of remuneration can be performed according to currency credit/creditor/leasing obligations of the borrower, and also according to obligations with binding to foreign currency. At the same time the amounts of subsidies it is paid to tenge on the rate established by National Bank of the Republic of Kazakhstan for date of transfer of the amounts of subsidies. In case of positive exchange difference it is set off on account of future subsidies, and in case of negative exchange difference it is paid by the borrower.

7. Financial institutions do not charge from borrowers the fee, the charges and (or) other payments connected with participation in financial improvement, except for the commissions, charges and/or other payments connected with the change of conditions of crediting/providing leasing initiated by borrowers.

8. Agreements according to credit/leasing obligations of borrowers according to which support in type of subsidizing of rate of remuneration according to other state and/or budget programs, and also according to credit/leasing obligations of the borrowers financed at the expense of means of the republican budget and means of National fund of the Republic of Kazakhstan is given are not subject to subsidizing of rate of remuneration.

9. Financial improvement assumes subsidizing of rates of remuneration according to credit and/or leasing obligations for all term of their action, but no more than 9 (nine) years.

10. Borrowers whose activities are in stage of change of form of business, liquidation or bankruptcy are not allowed to procedures of financial improvement, and also activities of which are suspended according to the current legislation of the Republic of Kazakhstan, except as specified restructurings of financial debt of borrowers, and also the borrowers who are in the accelerated rehabilitation procedure or the rehabilitation procedure.

Charge of means of subsidizing of rates of remuneration according to credit and/or leasing obligations begins from the date of the conclusion of the agreement on restructuring/refinancing of obligations signed by the borrower and financial institution, payment of means of subsidizing is performed within financial year, from the moment of the conclusion of the agreement of subsidizing for the account and limits of the means provided according to the budget program 225 "Subsidizing of interest rate for credit and leasing obligations within the direction on financial improvement of subjects of the AIC". At the same time distribution of funds for subsidizing is performed taking into account earlier signed agreements of subsidizing.

Under the agreements of subsidizing signed in 2013 subsidizing of rates of remuneration according to the re-structured/refinanced credit/creditor and leasing obligations of borrowers by decrease it for 7% (seven) annual in tenge will be performed since January 1, 2014.

11. Financial improvement is performed on condition of write-off by financial institutions of accrued fines and penalty fee, the added overdue remuneration is made with payment payment by installments the separate schedule (without capitalization in principal debt) with rate of remuneration of no more 0,1 of % per annum, except as specified, when there is consent of the borrower to capitalization of overdue remuneration in principal debt.

12. Change of conditions on the re-structured/refinanced credit and leasing agreements (remuneration rate, payment due date, providing delay on payment of principal debt and/or remuneration) is possible no more once a year, at the same time capitalization of remuneration in principal debt is not allowed.

13. Subsidizing of rate of remuneration is performed by decrease it according to credit and leasing obligations of borrowers for 7% (seven) annual in tenge and for 5% (five) in foreign currency.

Subsidizing of rate of remuneration is performed in case of observance of the conditions specified in subitems 1) and 3) or subitems 2) and 3) of this Item:

1) increases in terms of return of credit and leasing obligations of borrowers by financial institutions for the term of no more than 9 (nine) years;

2) refinancings of accounts payable of subjects of the AIC before other business entities with their replacement by the credits of financial institutions with return term no more than 9 (nine) years, or substitution of earlier loans by the conclusion of supplementary agreements;

3) respect for criteria of providing subsidizing of rate of remuneration in case of restructuring/refinancing of the credit/creditor and leasing obligations by the borrower specified in Chapter 3 of these rules, and also observance of the parity participation in financial improvement specified in Chapter 11 of these rules.

4. Order of interaction when subsidizing rates of remuneration of financial institutions for restructuring/refinancing of credit/creditor and leasing obligations of Borrowers

14. For carrying out restructuring/refinancing of credit/creditor/leasing obligations of borrowers the operator within 3 (three) working days after the introduction of the agreement on rendering services in force places announcements in at least 3 (three) republican mass media and on Internet resources (own and the administrator) about the beginning of the procedure of financial improvement that grants the right to borrowers to file in financial institutions petitions on implementation of restructuring and refinancing within financial improvement.

15. Borrowers file in financial institutions petition for intention to restructure/refinance the credit/creditor/leasing obligations.

16. Consideration of statements by financial institutions from borrowers is performed within 30 (thirty) calendar days after provision by the borrower of complete document package according to domestic credit policy and internal regulating documents of financial institutions.

17. In case of approval of statements of borrowers, financial institutions create and send to the operator the following documents:

1) the request in form, according to appendix 2 to these rules which shall be signed by the head of financial institution or the authorized person of financial institution having the power of attorney with right to sign and it is under seal financial institution, at the same time separate requisitions from branches (representations) of financial institution are not accepted;

2) the notarized copy of the license of financial institution for the right of banking operations represented in one-time procedure (in case of availability that);

3) the copies of agreements according to credit/creditor/leasing obligations of the borrower certified by financial institution;

4) the document confirming receipt of credit/leasing by the borrower (the payment order, the account statement of the borrower specified in the credit/leasing agreement, the delivery-acceptance certificate of subject of leasing);

5) the plan of financial improvement of the subject of the AIC for form according to appendix 3 to these rules.

In case of exceeding of the amount of the credit/creditor/leasing obligations of the borrower which are subject to financial improvement, 4 500 000 000 (four billion five hundred million) tenges and availability more than one creditor (financial institution), banks of the second level create creditor committee on complex improvement of subjects of the AIC and the comprehensive plan of financial improvement is represented;

6) the draft of the re-structured/refinanced agreement, the draft of the updated schedule of repayments containing the column of subsidized part of rate of remuneration and the column of not subsidized part of rate of remuneration, certified by financial institution including in the electronic edited format.

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