ORDER OF THE MINISTER OF AGRICULTURE OF THE REPUBLIC OF KAZAKHSTAN

of July 2, 2015 No. 4-5/604

About approval of Rules of activities and liquidation of funds of guaranteeing obligation fulfillment for cotton receipts

According to the subitem 18) article 7 of the Law of the Republic of Kazakhstan of July 21, 2007 "About development of cotton industry", PRIKAZYVAYU:

1. Approve the enclosed Rules of activities and liquidation of funds of guaranteeing obligation fulfillment for cotton receipts.

2. To provide to department of production and conversion of crop products and phytosanitary safety of the Ministry of Agriculture of the Republic of Kazakhstan in the procedure established by the legislation:

1) the state registration of this order in the Ministry of Justice of the Republic of Kazakhstan;

2) within ten calendar days after the state registration of this order in the Ministry of Justice of the Republic of Kazakhstan the direction it the copy on official publication in periodic printing editions and in information system of law of Ad_let;

3) placement of this order on Internet resource of the Ministry of Agriculture of the Republic of Kazakhstan.

3. This order becomes effective after ten calendar days after day of its first official publication.

Approved by the Order of the Minister of Agriculture of the Republic of Kazakhstan of July 2, 2015 No. 4-5/604

Rules of activities and liquidation of funds of guaranteeing obligation fulfillment for cotton receipts

1. General provisions

1. These rules of activities and liquidation of funds of guaranteeing obligation fulfillment for cotton receipts (further - Rules) are developed according to the Law of the Republic of Kazakhstan of July 21, 2007 "About development of cotton industry" and determine procedure for activities and liquidation of funds of guaranteeing obligation fulfillment for cotton receipts.

2. In these rules the following basic concepts are used:

1) the participant - the cotton-processing organization having the license for rendering services in warehouse activities with issue of cotton receipts with which fund it is signed and the agreement of participation is effective;

2) fund of guaranteeing obligation fulfillment for cotton receipts - the legal entity performing the activities for the purpose of ensuring protection of the rights and legitimate interests of holders of cotton receipts from non-execution of obligations by the cotton-processing organizations for the cotton receipts issued by them (further - fund or funds).

2. Procedure for activities and liquidation of funds of guaranteeing obligation fulfillment for cotton receipts

3. The fund (funds) is non-profit organization which form of business is the joint-stock company.

4. The fund (funds) performs the activities based on legal acts of the Republic of Kazakhstan for non-profit organizations and for joint-stock companies, these rules and constituent documents.

5. The main objectives of fund (funds) are:

1) ensuring protection of the rights and legitimate interests of holders of cotton receipts from non-execution of obligations by the cotton-processing organizations for the cotton receipts issued by them;

2) development of system of guaranteeing obligation fulfillment in cotton receipts.

6. The procedure for forming of governing bodies of fund (funds) and their competence are determined by constituent documents of fund (funds).

7. The income of fund (funds) is aimed only at its development for achievement of effective objectives and tasks.

8. The size of compensation reserve of each fund (funds) intended for warranty payments shall be sufficient for ensuring obligation fulfillment according to cotton receipts of participants and constitute at least one billion tenges in the amount.

9. Compensation reserves of each fund (funds) are created irrespective of forming of the authorized capital necessary in case of its creation.

10. Fees of participants without fail go for replenishment of compensation reserve.

11. For the purpose of providing requirements of holders of cotton receipts at least 80% of the size of equity of fund (funds) are placed on permanent basis in highly liquid financial assets (money, deposits in banks of the second level, securities).

12. In time no later than one month from the date of the state registration in judicial authorities the fund (funds) submits within authorized body in the field of development of cotton industry the documents confirming their state registration, constituent documents, and also data on the size of compensation reserve.

13. The fund (funds) publishes the message on the creation in mass media and offers to the cotton-processing organizations to take part in the relevant fund (funds).

14. The fund (funds) bears subsidiary responsibility to holders of cotton receipts in cases of non-execution or improper execution of obligations by participants according to the civil legislation of the Republic of Kazakhstan.

15. The fund (funds) can be liquidated according to the procedure, established by the Laws of the Republic of Kazakhstan of January 16, 2001 "About non-profit organizations" and of May 13, 2003 "About joint-stock companies" taking into account requirements of Item 16 of these rules.

16. The decision on voluntary liquidation of fund (funds) by governing bodies of fund (funds) can be made only after guarantees of fund (funds) or complete execution by the participant of obligations according to the issued cotton receipts pro-guaranteed by this fund (funds).

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