November 2020 – New anti-corruption rules for State Officials in Kazakhstan are now in force following the recently approved Law “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Anti-Corruption Issues”. As a result, the Civil Code, the State Service Law and the Anti-corruption Law have been amended with effect from 18 October 2020 (the “Amendments”). This overview of the new rules introduced by the Amendments is intended as a helpful guide—it is not comprehensive and does not constitute legal advice.
The Amendments impose an absolute ban on giving gifts to State Officials for their actions (or inaction) for the benefit of the giver, if such actions are within their official authorities or they are able to facilitate such actions (inaction) by virtue of their official status. Before the Amendments came into force, provided that giving such a gift was not for, or in connection with, the performance of his/her official duties/functions, it was at least possible to give State Officials ordinary gifts with a value of not more than 10 monthly calculation units (KZT 27,780 as of today, approximately EUR 55). Even this relatively small limit has been abolished, and therefore ordinary gifts, e.g., in the form of cakes, drinks, notepads, etc., are no longer allowed.
The updated Anti-corruption Law provides that gifts received without the knowledge of State Officials and (or) their family members or received in violation of the Anti-corruption Law must be transferred (free of charge) to the authorised body managing state property, and any services provided to them in the same circumstances must be paid for by the transfer of money to the state budget.
Moreover, the Law of the Republic of Kazakhstan ”On state property” stipulates that gifts received by State Officials and their family members for actions (inaction) for the benefit of the giver if delivered without the knowledge of such persons and their family members, as well as gifts transferred to them during protocol and other official events, except for gifts handed over for achievements in work and other merits, are deemed to be gifts given to the state.
2. Family members of State Officials
It is important to highlight the emphasis that the Amendments place upon family members of State Officials. The Anti-corruption Law defines family members of a State Official as the spouse, parents, children and persons who are dependent on him/her and permanently residing with him/her.
Under the new Amendments, all restrictions in relation to gifts imposed by anti-corruption legislation is also applicable to family members of a State Official. The Civil Code prohibits giving gifts to family members of a State Official for actions (inaction) of such State Official for the benefit of the giver if such actions are within his/her official authorities or he/she is able to facilitate such actions (inaction) by virtue of his/her official status.
The State Service Law and Anti-corruption Law prohibit family members of a State Official from accepting gifts and services, material remuneration, invitations for tourist, medical-recreational and other trips at the expense of individuals and legal entities, either foreign or those of the Republic of Kazakhstan, with whom such State Official is connected by service.
Therefore, the provisions of the Civil Code, the State Service Law and the Anti-corruption Law mentioned above allow interactions with family members of a State Official to be treated as interactions with the State Official.
3. Reporting requirements
According to the State Service Law, State Officials are obliged to immediately notify the line manager and (or) management of the state body at which they work and (or) authorised state bodies of any corruption–related offences that they become aware of that either have been or are being committed.
In accordance with the updated Anti-corruption Law, money, gifts and services received by State Officials and (or) their family members without their knowledge or in violation of the Anti-corruption Law must be transferred to the authorised body managing state property within 7 days of the receipt thereof, and an explanation regarding such money, gifts and services must be presented to the respective state revenue body.
With the new amendments in force, the Anti-corruption Law obliges a person (State Official) possessing information of a corruption offence that is being committed or that has been committed to inform the line manager and (or) management of the state body or organisation of which he/she is an employee and (or) the authorised state bodies for such corruption–related offences.
4. Corruption offences
It is important to note that corruption offences may entail administrative and criminal liability. In this respect, apart from State Officials being liable for a corruption offence, corruption offences are also deemed committed by individuals and legal entities that bribe State Officials and illegally provide them with material benefits and advantages (e.g., gifts and services).
This alert was prepared by members of Kinstellar’s Kazakhstan team: Joel Benjamin (Managing Partner), Kuanysh Shekerbekov (Senior Associate) and Dinara Nurgazy (Legal Assistant).