Improving the Legal Environment for Business and Investment in Central Asia

2. Kazakhstan

Abstract

Kazakhstan has worked to diversify its economy in post-pandemic recovery. Progress has been made in reforming the legal and regulatory framework for investment, digitalising administrative procedures and services for SMEs, and levelling the playing field with SOEs. However, gaps remain in investment in the non-oil sector and productivity growth, while the regional context might durably weigh on Kazakhstan’s growth prospects. The COVID-19 pandemic and Russia’s war in Ukraine exacerbated long-standing and structural issues holding back private-sector development, in particular persisting state presence in the economy, inconsistent regulatory enforcement and dispute settlement, and lacking trade facilitation measures.

This chapter assesses progress and remaining challenges for Kazakhstan in implementing reforms to improve the operational environment for business, contract enforcement, and trade facilitation, and concludes with six policy recommendations.

Table 2.1. Summary of priority reform implementation and updated recommendations

2020		2023
Challenges identified	Recommendations	Implementation assessment	Way forward
Operational environment for firms: Implement consistently and thoroughly the new code for entrepreneurs	➢ Raise public sector capacity on licensing and permits, especially at the local level ➢ Review and rationalise licenses and permits (e.g., environmental permits) ➢ Carry out an impact assessment of the Entrepreneurial Code, online one-stop shop and streamlined licensing procedures and use outcomes as a basis for a public-private dialogue on further steps	➢ Regulation became more transparent and equitable ➢ But implementation lags because of capacity issues, and complexities remain	➢ Stabilise business regulation with a focus on analysing the impact on SMEs ➢ Raise firms’ awareness and ability to cope with regulatory changes
Contract enforcement: Improve dispute settlement for all businesses operating in the country	➢ Further modernise and guarantee the independence of the judicial system ➢ Promote alternative dispute resolution mechanisms, continue to expand capacity based on international arbitration best practices, ensure the independence of ADR	➢ Judicial and dispute resolution reforms have been advanced in priority by the government ➢ But contract enforcement and dispute resolution continue to be perceived as a major challenge for businesses	➢ Keep improving the quality of the court system by monitoring the implementation of judicial reforms ➢ Improve domestic businesses’ awareness of and access to available dispute resolution tools ➢ Set up an effective institutional framework for intellectual property rights enforcement
Trade facilitation: Improve co-ordination of internal and external customs agencies	➢ Improve horizontal co-ordination across and avoid overlapping between public institutions ➢ Train border officials and develop interconnected transit information systems ➢ Harmonise customs documents and requirements with other countries of the region	➢ The trade regulatory framework improved, especially with digitalisation and for IP rights ➢ But implementation lags and regulatory barriers to services trade remain	➢ Close the implementation gap and improve access to trade-related information for businesses ➢ Rationalise services trade regulation and improve regional co-operation to keep trade flowing

Note: Orange – reform not initiated; Yellow – reform initiated/ being implemented; Green – reform close to completion/ completed.

Source: (OECD, 2020[1]), OECD analysis (2023).

Introduction

COVID-19 and Russia’s full-scale invasion of Ukraine have challenged the government in maintaining reforms to sustain long-term growth

Continued reform efforts in Kazakhstan resulted in robust economic growth

Following the transition recession of the 1990s, Kazakhstan experienced growth from 2000 to 2022 driven largely by FDI inflows into the primary sector. While over this period, real gross domestic product (GDP) grew at an average annual rate of 6% in (IMF, 2023[2]), the trend rate of growth has been declining over time. In particular, trend growth never recovered to previous levels following the two main macroeconomic shocks of the past two decades (the Great Recession in 2008, the drop in global commodity prices in 2014-15) (Figure 2.1).

Figure 2.1. Real GDP growth

Source: (IMF, 2023[2])

More needs to be done to strengthen productivity and investment growth in the non-extractive sector, and private-sector development against the backdrop of the global push for decarbonisation (OECD, 2023[3]). The declining trend rate of growth seems to indicate that, despite the government’s efforts to diversify the economy, the dominant extractive-driven growth model is no longer sufficient to sustain growth rates observed in previous decades, while convergence has stalled. In the absence of alternative and diversified sources of output, especially in the non-oil private sector, inclusive and sustainable growth will prove ever harder to achieve. In 2022 alone, 43% of new FDI inflows were directed to the mining sector (Ministry of Foreign Affairs of the Republic of Kazakhstan, 2023[4]).The government’s commitment to sustained reforms will be critical, in particular in relation to improving the investment climate, raising the competitiveness of non-extractive sectors, limiting the role played by state-owned enterprises (SOEs), and levelling the competitive playing field (OECD, 2017[5]; OECD, 2020[1]).

The declining trend of growth has been largely driven by lower total factor productivity (TFP) and labour productivity (IMF, 2022[6]). The slowdown in labour productivity growth in particular has been noticeable in non-extractive sectors, which account for around 80% of employment (OECD, 2023[3]) (World Bank, 2021[7]). Labour productivity in these sectors stands around or below the national average, which only accounts for 28% of the average of the three most productive sectors (mining, real estate and services) (OECD, 2023[3]). A reallocation of the workforce to higher value-added activities outside the extractive sector would serve to enhance labour and TFP productivity but will require the creation of new sectors and opportunities. It is nonetheless worth mentioning that Kazakh labour productivity as a percentage of OECD average has been steadily increasing (Figure 1.2).

Figure 2.2. Labour productivity

Source: (ILO, 2023[8])

The government focused on short-term policies in the context of COVID-19 and Russia’s war in Ukraine

At the onset of the COVID-19 pandemic in Central Asia, Kazakhstan enjoyed a sound macroeconomic environment with low unemployment (4.9%) and low debt (21% of GDP). As in other countries of the region, the crisis had a severe impact on Kazakhstan’s economy, which recorded a contraction of 2.6% in 2020 before a return to 4% growth in 2021, thanks to continued fiscal expansion, strong consumer credit growth, and the relaxation of COVID-19 restrictions (World Bank, 2022[9]; OECD, 2021[10]).

The main impact of the COVID pandemic on the economy was the combination of a drop in commodity prices and a severe hit to the country’s services sector. While the first reduced fiscal space, the latter had a strong effect on employment across the country as the services sector, mainly composed of SMEs, employed about 1.6m workers in retail trade, tourism, and catering alone. However, the government moved rapidly to support the economy. It introduced foreign exchange controls for SOEs to support the tenge, following a hike in the policy rate by the National Bank of Kazakhstan to limit domestic inflation, and an anti-crisis package to cushion the economic impact of the pandemic on the national economy by extending the social safety net to wage and unemployment subsidies provision, and dedicated support measures for businesses (Box 2.1) (National Bank of Kazakhstan, 2020[11]). The pandemic therefore highlighted the vulnerabilities in Kazakhstan’s economy caused by its reliance on external demand for a narrow range of commodities. At the same time, the response to the crisis consumed significant resources that might otherwise have been directed towards addressing these vulnerabilities through reforms. There is therefore a need to ensure that policy is recentred on making those reforms to support private sector development over the long-term.

Box 2.1. Kazakhstan’s support to businesses during and after the COVID-19 pandemic

In mid-March 2020, Kazakhstan adopted an anti-crisis package, complemented in May 2020 by the “Comprehensive Economic Growth Recovery Plan”, for a total amount of 14 billion USD (5.9 trillion tenge), equivalent to 9% of GDP. Later during the year, additional tax breaks and local support as well as additional measures to support SMEs were provided. According to official statistics, by early 2021, more than 1.6 million people and 11.5 thousand SMEs had benefitted from a deferral of payments of loans, and the provision of new preferential loans totalling USD 870 m (360 bn tenge). Some of the main measures covered:

Support to workers and social assistance

• The National Fund of Social Security granted wage subsidies to employees of MSMEs on unpaid leave, while employees who lost their jobs because of the confinement were compensated at 40% of their former salary for up to six months.

Support to firms

• Firms with a drop in turnover above 40% received cash support up to 80% fixed costs, full compensation was provided to firms forced to temporarily close due to the lockdown.

• Payments of VAT and payroll taxes were deferred, and several loan guarantee schemes were set up to provide additional liquidity to firms. Public budget rules have been relaxed to encourage frontloading of public consumption and payments to private firms.

• Subsidised lending was provided under the state programme “Economy of Simple Things” (KZT 1 trillion) to grant additional liquidity to businesses.

Source: (OECD, 2021[10]).

Kazakhstan has felt the economic and social effects of Russia’s invasion of Ukraine. Given its geographic and economic proximity with Russia, Kazakhstan experienced significant turbulences. These translated into currency depreciation, a significant influx of Russian citizens fleeing mobilisation, the disruption of supply chains and inflation. On the positive side, the country benefitted from company relocations following the introduction of sanctions against Russia and saw the value of its exports increase as a result of a spike in commodity prices (ODI, 2022[12]).

Addressing long-term reforms is crucial for the economy to withstand current shocks and adapt to the environmental challenge

Looking ahead, the need to pursue reform endeavours is more acute for the years ahead, as significant downside risks remain due to persisting structural weaknesses, including, in particular, sluggish productivity growth, as well as the twin effects of the war in Ukraine and the international sanctions imposed on Russia, and the impacts of climate change (EBRD, 2022[13]; IMF, 2022[14]; OECD, 2022[15]). While growth reached 3.2% in 2022 and is estimated to reach 4.3% in 2023, this trend is mainly supported by higher oil prices, fiscal stimulus, and sustained recovery of private consumption (IMF, 2023[16]). In the years ahead, new vulnerabilities could emerge from supply chain disruptions, risks of secondary sanctions given Kazakhstan’s significant trade, investment, and migration linkages to Russia, and increased climate stress (World Bank, 2022[9]; EBRD, 2022[17]; OECD, 2022[15]).

The 2020 OECD report identified a need for improved implementation of reforms in three priority areas

Operational environment for SMEs

The 2019-2020 OECD assessment found that Kazakhstan had improved the simplicity and coherence of its business regulation. It highlighted the streamlining of legislations and administrative procedures with the introduction of the Entrepreneurial Code (EC) (Box 2.2), the creation of Public Service Centres (PSC) and sector-based self-regulatory organisations (SROs) supervising the implementation of licensing procedures, the design of supportive strategies (Roadmap 2020), and the establishment of the Entrepreneurship Support Fund DAMU.

However, businesses continued to report that the regulatory landscape was unpredictable and complex to navigate, and that procedures were unevenly implemented across the country. As a result, businesses were left subject to sometimes abusive practices, in particular in relation to licensing procedures. This perception reflected the experience of both local businesses and international investors, which in addition continued to face remaining restrictions in the legislation, such as exceptions to national treatment in certain sectors, and restrictions to the employment of foreign staff and transfer of property (OECD, 2020[1]).

Box 2.2. The Entrepreneurship Code of Kazakhstan

In October 2015, Kazakhstan introduced the Entrepreneurship Code (EC), consolidating the six pre-existing entrepreneurship- and investment-related legal acts into a single document, harmonised with the Civil Code to ensure consistency. Beyond its streamlining aspect, the EC also enacted a new approach to state-business relations with the introduction of the principles of presumption of good faith and mutual responsibility of state and business entities, as well as the principle that ambiguity in legislation should be interpreted in favour of businesses.

The EC has since become the main legislation regulating all domestic and foreign business activities in Kazakhstan (including investment) and includes among its main dispositions the codification of allowed circumstances for unscheduled inspections, of in-court and alternative dispute resolution mechanisms, as well as the role and supervision of the Business Ombudsman. However, relations between firms and the customs agency, subsoil use and the licensing thereof, and the activities of the prosecutor’s office remain outside its scope.

Source: Entrepreneurial Code of Kazakhstan, (OECD, 2020[1]).

Contract enforcement

De jure investors’ rights and property are explicitly guaranteed by the Civil Code and adjacent legislation on investment and international investment agreements. Companies facing explicit or implicit corruption attempts or other forms of unfair treatment can seek dispute resolution either in domestic courts or international arbitration bodies. Efforts of the government have also focused on streamlining the procedural efficiency of the court system, with the Astana City Court and the Supreme Court being the only courts considering investment dispute cases, complemented by the creation of the Astana International Financial Centre (AIFC). In addition, alternative dispute resolution mechanisms have been developed with the establishment of protective and representative institutions such as the Investment Ombudsman, the Commissioner for the Protection of Entrepreneurs’ Rights under the National Chamber of Entrepreneurs Atameken (business ombudsman).

However, concerns remained about the quality of judgments, and alternative dispute resolution mechanisms remained underused. While international investors remained concerned with the quality of judgments by the local courts, local businesses were mostly unaware of available dispute resolution tools, and if aware, expressed concerns about their impartiality when adjudicating disputes with the state or state-owned enterprises (SOEs) (OECD, 2020[1]).

Trade facilitation

Kazakhstan has been an active member of regional and international trade co-operation institutions. The country is a member of the Eurasian Economic Union (EEU) and the Central Asia Regional Economic Cooperation (CAREC), as well as the World Trade Organisation (WTO). The government has also been actively promoting regional connectivity with several reforms to automatise, digitise and harmonise its customs procedures with those of neighbouring countries. However, the country remains at the margins of international trade flows The pandemic and the effects on international trade of Russia’s war in Ukraine highlighted that the country’s integration in global value chains (GVCs) remains limited, as the country’s landlocked position is compounded by persisting hard and soft infrastructure issues (OECD, 2023 forthcoming[18]; OECD, 2020[1]; OECD, 2023[3]).

Assessing implementation progress since 2020

The following sections provide an overview of implementation progress of the three priorities for improving the legal environment for businesses identified in the 2019-2020 OECD analysis, and suggest a way forward taking into account new priorities following the pandemic and the regional context.

Priority 1: Business regulation has become more transparent and equitable, but reforms require thorough implementation

The gradual phasing out of COVID-19 support packages to businesses coincided with a rethinking of business regulations

The COVID-19 crisis has had a strong negative effect on businesses: an estimated 300,000 SMEs stopped working nation-wide in 2020 and many more firms reduced their operations. The pandemic also exacerbated existing bottlenecks and issues in the regulatory framework governing daily business operations (OECD, 2021[10]). As recovery took hold, the government gradually phased out support policies that coincided with a renewal of business legislation, with a focus on relieving businesses of administrative burdens, and further simplifying and digitalising state-business interactions.

Reforms have focussed on stabilising regulatory and inspection procedures

These reforms, adopted in December 2021, seem to reflect a change in the rationale of business regulation towards a reduction of stringency, inspections and room for arbitrary action (Government of Kazakhstan, 2021[19]). On state involvement and stringency, Article 7 of the law introduces the automation of risk assessment and management systems, with the aim to restrict the number of inspections a given administration can carry out and limit business inspections only to cases of compliance with permit requirements. The main procedural change pertains to the alignment of Kazakhstan’s risk classification system to OECD standards with the introduction of a third step (medium risk) to the previous binary system (high and low risk), and a ban on inspections motivated by reasons outside that scope. In addition, the law provides a legal basis to delegate some additional supervisory prerogatives away from the state to sectoral organisations, based on the outcomes of “market readiness analyses” for some sectors. These changes are also related to the first ever regulatory impact assessment (RIA) carried out by the Ministry of National Economy, with the support of the Business Ombudsman. The review, which is to be completed in 2024, covers all regulations, including technical ones, and has so far covered five sectors representing 60% of all businesses. According to official data, at the time of writing, the assessment had already resulted in a reduction of the number of permits (by 75%, from 1,115 to 287), of inspection duration (from 30 to 15 days), direct supervisory functions of the state (from 544 to 379), and the introduction of preventive control measures.

The new Environmental Code, introduced in January 2021, seems to bring Kazakhstan’s regulatory framework for environmental management closer to OECD practices. While environmental permitting and licensing has long been considered a key issue by businesses, the Code aims at regulating activities of any individual or legal entity that could potentially have a negative impact on the environment, such as carbon emissions or other forms of pollution, and introducing the best available technologies (BAT) in the country as a basis for an integrated environmental permit framework, providing clarity for firms in the oil and gas, mining and metallurgical, chemical and electric power industries, which are responsible for a large share of pollution in the country (IEA, 2022[20]). Effects of these changes however need to be assessed in practice.

Further progress in the digitalisation of public services has supported easing the administrative burden for firms

The government’s digitalisation agenda has borne fruit. This has been particularly visible in e-government and digital public service delivery, easing business-state interactions and lowering the costs and time involved in accessing public services, especially for small firms (OECD, 2020[21]; Government of Kazakhstan, 2020[22]). A recent OECD survey finds that businesses are satisfied with the quality of online service provision, such as licensing and permits for businesses (OECD, 2023[3]). Beyond these, the December 2021 law has renewed impetus to the digitalisation and simplification of key steps in the business lifecycle, especially bankruptcy requirements. In addition, since 2020, the e-government platform has increasingly been used to involve the business sector and individuals into discussions about regulatory changes.

The government has also deployed efforts to support an even implementation of reforms

Reform efforts have also focussed on ensuring coherent implementation across the country and the different levels of administration, and fair treatment among businesses. In early 2023, the government introduced the “Registry of Mandatory Requirements” which lays out mandatory rules for implementation of the law, with a focus on transparency and enforceability (mandatory publication of legislative changes and introduction of a timespan to allow businesses to adapt), and certainty with the publication of a closed list of claims for which inspection and sanction powers of public authorities apply. The government has also aimed to increase the awareness and capabilities of the public administration on regulatory requirements and changes. In 2022, civil servants and businesses also benefitted from training sessions by Atameken, the National Chamber of Entrepreneurs, to acquaint them with the changes introduced to the regulatory framework and ease implementation. Regarding fair treatment among businesses, the law of 31 December 2021 has laid the ground for levelling the regulatory playing field between private businesses and SOEs, while the government announced in early 2023 an SME-specific policy to be integrated into the Concept of Small and Medium Businesses Development until 2030 by the end of August 2023. Available information about the policy suggests that it will provide targeted tax, and administrative incentives to support SME growth, while developing SME-FDI linkages, supplying contracts between national SMEs and large SOEs, and adapting state support to regional development to fit SMEs’ needs.

Implementation lags and complexities remain

The regulatory landscape remains very changeable, and firms struggle to keep pace with reforms

Businesses report that uneven implementation remains a central impediment to the de facto improvement of the environment in which they operate. In particular, the pace of regulatory reform remains too high for businesses, especially small firms, to participate in public consultations and keep up with new requirements. For instance, according to official data, the Tax Code adopted in 2017 was amended 50 times between 2018 and 2022 (including 11 times in 2018, 18 in 2019, 9 in 2020, 7 in 2021, and 5 in 2022), with changes affecting about one third of its articles. While these changes include noticeable improvements, information about public consultations and changing regulatory requirements has not become more accessible in recent years. Businesses interviewed by the OECD during the assessment also report the persistence of perceived bias from some state authorities when conducting RIAs, doing so with predetermined outcome in mind rather than grounding their decisions for streamlining of regulations on the actual feedback of the private sector.

Business inspections remain a central issue in the operational environment for firms

Businesses also remain concerned about inspections. Despite recent improvements, their motives have not yet been fully reformed. Moratoria on business inspections continue to remain the main support measure for small businesses, and the moratorium adopted during the pandemic has been extended for an additional year, until 2024. The moratorium seems to have been effective in limiting the number of inspections, as official data suggest that there has been a marked decrease in the number of inspections since 20191. However, this may in part reflect lower business activity during the pandemic as well.

The systematic use of moratoria on business inspections as a policy tool is at best a second-best option and creates additional complexity for firms. Moratoria on inspections can lead to a concentration of inspections on the periods right before and after their application, while not resolving the issue of unpredictability and partiality of inspections. In the current context, it might even add further uncertainty to the regulatory environment, as it remains unclear how the moratorium is articulated with the new risk management system introduced under the December 2021 law, giving the impression to businesses that the issue is still dealt with via exceptions in the regulatory framework rather than an actual overhaul of inspections as outlined in the law. Businesses also report a non negligeable number of unwarranted inspections, persisting excessive controls, and punitive inspections by some regulatory authorities. While this could partly be attributable to a transition between the law’s adoption and its effective implementation, businesses report an increase in de facto administrative barriers.

License requirements have been streamlined and mainly automated following regular regulatory reviews, however new issues on the licensing system have appeared. While the complexity and unpredictability of licensing requirements were a major concern reported by businesses to the OECD in the 2020 report, early 2023, the permit system included a total of 345 permits and notifications, including 57 notifications of commencement or termination of activities which have been fully automated. This corresponds to the removal of 39 permits and notifications since 2019. However, businesses report concerns over sector-based self-regulatory organisations (SROs), which had been created in 2015 by the EC to supervise the implementation of licensing procedures. If initially their development was seen as an improvement to help businesses navigate licensing matters, businesses report that the de facto transfer of oversight responsibilities from the state to SROs is weak, with a large part entrusted to Atameken, equivalent to a state body. Businesses also reported that the development of SRO under its current form could potentially have a detrimental effect on SMEs, as membership might not be affordable to them due to high entry fees and absent regulation on methodologies to calculate associated costs, such as contributions to the compensation fund, insurance amounts and premia.

Box 2.3. Design of an Administrative Burden Index

Atameken is currently reviewing the Administrative Burden Index developed in 2020, which aims to improve the implementation of the law applicable to businesses with a view to reduce the administrative burden on firms. It will be based on statistical data from government agencies and the Committee on Legal Statistics and Special Records of the General Prosecutor's Office of Kazakhstan, as well as on the basis of survey indicators collected among businesses.

The Index will reflect the nature and attitude of the control and supervisory bodies. Preliminary index indicators will include data on:

• effective implementation of the risk assessment system when conducting business inspections,

• reduction of repressiveness of control and supervisory activities (e.g., fine rate)

• registered administrative offenses against business entities,

• number of illegal inspections; etc.

The Administrative Burden Index will be made publicly available.

Source: OECD analysis from Atameken contribution

The pace of regulatory changes still needs to adapt to implementation capacities

The government should stabilise regulation through a systematic use of regulatory impact assessments and improve the monitoring of reform implementation

Ensuring effective implementation of business regulation also requires stabilising it, introducing only necessary changes, while publicising them to both public authorities and businesses. The current pace of regulatory changes is a challenge to both businesses and public agencies’ capacities and accountability. The government could introduce a more regular use of RIAs as a tool for ex ante and ex-post evaluation, in direct collaboration with the private sector and its representatives, including Atameken and its regional branches, as well as sectoral business associations, to identify remaining gaps or redundancies in business legislation. Such RIAs could be carried out on a regular and predetermined schedule, for instance once every two years, and their outcomes should feed into the policy process, involving all concerned agencies to ensure a better understanding across the government of the rationale for different policy and regulatory reforms for private sector development. Particular attention should be paid to the impact of reforms on SMEs, and to the examination of how simplification or revisions may address these issues. Lastly, there should be only limited exceptions to exemptions from RIAs (e.g., budget laws, national security matters). Too many exceptions to the obligation to perform RIA can become an alibi for administrations not to carry out the analysis (OECD, 2020[23]).

In parallel, the government could step up its efforts to ensure consistent implementation of reforms by supporting the capacities of the public sector. For instance, the trainings of civil servants that were initiated by Atameken in 2022 should be generalised at both national and regional levels and be carried out directly by state authorities on a regular basis. Doing so may help ensure that civil servants are up to date with regulatory changes and will be able to advise and support businesses in their adaptation journeys. In parallel, the government should also prioritise the development of channels through which firms can report instances of non-implementation, for instance in collaboration with the Business Ombudsman or a dedicated section on the e-government website accompanied by the creation of cross-agency steering body to provide oversight and guidance.

The government should develop tools to raise firms’ awareness of and ability to cope with regulatory changes

Beyond increased consultation with the private sector, the government can also help businesses to better adapt to regulatory changes. For instance, more could be done to publicise new and revised regulation, and develop support programmes to help firms, especially SMEs, adapt. All regulatory changes should be widely publicised and regularly updated with latest legislative changes and made available to the private sector through the publication of information on a dedicated page of the competent authority’s website as well as on the websites of Atameken and sectoral business associations. Atameken could also regularly update the website of the registry of issues. In a similar vein to trainings for civil servants, the competent authorities should design and provide targeted outreach programmes and trainings to help businesses, especially SMEs, adapt to new regulatory requirements. Such programmes should be financed by the government and could be administered via Atameken and its regional branches or other private sector organisations. Finally, public administrations should also develop a stronger culture of remediation to encourage firms to adjust operations to remain in line with their regulatory requirements. For instance, a predefined and widely publicised amount of time should be granted to businesses to adapt to new legislation after its introduction and publication. During that period, relevant public authorities should provide firms with explanatory documents and the opportunity to discuss these changes and their impact on individual businesses with an individual from the authority.

Priority 2: Judicial capacity and independence registered some progress, but dispute resolution tools can be further improved

Judicial and dispute resolution reforms have been a priority for the government

Recent judicial reform has focussed on strengthening judicial capacity and independence

In recent years, the government has focussed on increasing the trust of businesses in the judicial system. Recent reforms aimed at improving the probity and skills of judges, the quality and coherence of judgements, and businesses’ use of in- and out-of-court dispute resolution mechanisms. In particular, they targeted a change of practice and improved implementation of the pre-existing well-developed legal framework for contract enforcement and dispute settlement. Judicial reform has been advanced through the Supreme Court’s “Seven Pillar Strategy” to select and retain competent judges and enhance training on drafting judgements in accordance with international standards (OECD, 2020[1]). Businesses interviewed by the OECD report that the introduction of a new system of judicial recruitment and oversight under the High Judicial Council, and decision templates to guide the process of drafting judgements and increasing reliability have resulted in improved quality of court decisions. The Supreme Court and the government have also attempted to tackle corruption by raising the salaries of judges and prosecuting and dismissing senior judges involved in corruption cases. It however remains to be seen if those changes appear to be systemic, as so far Kazakhstan has not displayed a major score improvement in the World Justice Project index.

Advancing fair and accessible dispute resolution for businesses has become a priority for the government

The government has also advanced a more general dispute resolution reform, by making it as a priority means in business-state litigations and using it before pre-trial investigations. The adoption of the new Administrative Procedure Code (APC) in 2020 reflects this changed approach by introducing tools to provide individuals and businesses an equal opportunity with the state in the case of a dispute, as well as requiring more transparent operations and decisions of administrative bodies (Box 2.4). In particular, the code introduced a hearing procedure and pre-trial dispute resolution dispositions, shifted the burden of proof to the state body in case of disputes, and allowed courts to examine all circumstances relevant to the case without limiting themselves to the evidence submitted by the parties. It is to be noted that the law entered into force only one year after its adoption, to grant concerned institutions time to adapt to the new framework and allow judges and officials to attend specialised trainings (ZOiS, 2021[24]). Implementation of these reforms has also been entrusted to the chief justice of the Supreme Court and seems to have enjoyed support from the public and businesses. However, the first rulings by the administrative courts need to be assessed first to judge effectiveness.

Box 2.4. The Administrative Procedure Code of Kazakhstan

In his September 2019 Address to the People of Kazakhstan, President Tokayev pleaded for the introduction of dispute resolution mechanisms in administrative justice to level the playing field between individual and businesses, and the state in public law disputes. This led the government to shift towards the “listening state” principle and adopt the Administrative Procedure Code of the Republic of Kazakhstan (APC) in June 2020, which entered into force on 1 July 2021.

The new code is the first comprehensive legal document to regulate the country’s general administrative law, referring to the state’s exercise of power, its interaction with its citizens, and the mechanisms protecting and representing their interests. In particular, it allows for rule-of-law principles to be, for the first time, regulated in ordinary legislation. The code:

• replaces and streamlines two previous laws, the Law on Administrative Procedures and the Law on the Examination of Applications of Legal Entities and Individuals, as well as a part of the Civil Procedural Code, which contained the procedure for appealing against the actions of state bodies;

• codifies a set of rules for judicial proceedings in administrative courts such as the right of each individual to file a complaint against the state (guarantee of legal protection), the protection of this right - including the prohibition to deny an application or a complaint as well as applying pressure to a plaintiff to drop his complaint, the right to a “legally competent” judge, the right to be heard prior to any decision by an administrative court, and the introduction of the proportionality principle; and

• introduces a three-tier judicial system for administrative complaints, with the opportunity to appeal against first-instance decisions as well as an ultimate to the Supreme Court. As for first instance, the Code stipulates that they should be formed by specialised judges or by chambers of specialised judges and plans to establish independent specialised administrative courts.

Source: (Government of Kazakhstan, 2020[25]).

A Constitutional Court was re-established in 2022 and started work on 1 January 2023, with the explicit aim of better enforcing and communicating on individual and business rights. Both can indeed directly bring an appeal case to the court (Government of Kazakhstan, 2023[26]). Furthermore, the Ombudsman also received the right toa direct referral on matters concerning the rights enshrined in the constitution. Among them, “the right to freedom of entrepreneurial activity” guaranteed by article 26(4) stands out as particularly relevant for businesses.

Since its inception in 2016, the Business Ombudsman has played an active role in dispute resolution. The handling of out-of-court dispute settlement, in particular in relation to unfair treatment by government authorities, has met some success and received positive assessment by businesses according to official sources.

Similarly, tax administration and state audits have been reformed to be more supportive of business rights. A presumption of good faith of the taxpayer has been introduced in the Tax Code, and, following an initiative of Atameken, the appeal mechanism against the results of state audits has been improved by prohibiting the opening of a criminal case against an entrepreneur until all avenues of appeal against the results of a state audit have been exhausted in civil proceedings. It has been proposed to extend the results of inspections of all control and supervisory bodies as well. Finally, in July 2021, e‑Otinish, an online platform and mobile app was created to receive and process appeals of individuals against any government body, to facilitate the appeals to and the filing of a lawsuit, to decrease the duplication of appeals and to increase their speed of processing. According to official data, for the first 15 months of operation (as of September 2022), the app received more than 2 million appeals, representing a six-fold increase of online appeals and appeals mainly directed towards the Presidential Administration, AlmatySu (Almaty city water supply), akimats, and the Prosecutor General's Office, with 700 thousand unique users across the country (Government of Kazakhstan, 2023[27]).

Despite improvements, contract enforcement and dispute resolution continue to be perceived as a major challenge for businesses

Businesses continue to raise concerns related to contract enforcement and dispute resolution, particularly in terms of the predictability and impartiality of decisions. This has been confirmed by a recent OECD survey where, when asked which reforms they considered most important for the government to pursue, over half of respondents (55%) suggested reforms to improve transparency in the justice system and effective contract enforcement (OECD, 2023[3]). Businesses’ concern about a remaining gap between their de facto experience and the de jure provisions that ought to protect them cover mainly two issues: the existence of a two-tiered judicial system between international and domestic firms, and a persisting perception of court bias in favour of authorities in cases of business-state (or SOE) disputes.

Dispute resolution reforms need to be inclusive

The creation of the AIFC in 2018 was a major step towards the improvement of Kazakhstan’s investment attractiveness. The Centre’s work has helped improve the predictability of contract enforcement for large international investors and the AIFC’s International Arbitration Centre (IAC) has been successful in establishing itself as an important arbitration hub, not only for Kazakhstan but for Central Asia as a whole (OECD, 2020[1]; OECD, 2023[3]).

However, this development is rather an exception in the legal landscape, bearing the risk of creating a two-tiered justice system for businesses. While the AIFC offers arbitration by highly competent common law judges, the high costs associated to its procedures, as well as English being the main working language, have caused the centre to be considered by many smaller domestic businesses an exceptional justice intended only for foreign investors without benefits for local entrepreneurs. For domestic businesses, besides the reforms led by the Supreme Court, efforts to improve the functioning of administrative courts have essentially focussed on increased cooperation among judicial bodies, but asymmetry of information issues have largely been left unaddressed, with a non-negligible share of businesses not being informed about their existence or the procedures they might benefit from. Advancing contract enforcement and predictability for domestic businesses is not only an important step for domestic private sector growth, but can also add to investment attractiveness, as it improves the daily operations of potential domestic suppliers and clients for large international businesses (OECD, 2023[3]).

Dispute resolution can sometimes lack impartiality

A perception of bias in favour of authorities in disputes between businesses and state bodies also continues to prevail among businesses. This perception stands out as official numbers suggest that the reform of the APC has resulted in more rulings in favour of businesses. This seems to be particularly the case for disputes on tax matters for which in the first half of 2022 about 55% of rulings were in favour of businesses, compared to an average of 15% before the entry into force of the code. This difference between numbers and businesses’ perception might therefore reflect other litigation topics such as land relations, public procurement and subsidies, which, according to a recent review of business complaints against authorities carried out by Atameken and regional business chambers, are the most common issues for business complaints against authorities in the country.

The automation of procedures has created new barriers for businesses, in particular in relation to tax and public procurement matters, while court procedures are not perceived to be supportive of businesses in these cases. For instance, tax notifications and inclusion in the register of unfair participants in public procurement are generated automatically. If businesses are to challenge these in court, practice shows that the latter tend to rule based on the automated notification of decisions’ findings rather than the businesses’ explanations or newly provided documents. Businesses have also raised the concern that administrative sanctions remain outside of the scope of the APC so far, being governed by the Code on Administrative Infractions, which might leave room for interpretation.

The absence of specialised judges weakens the protection of intellectual property rights

Finally, at the intersection of both issues lies a gap in specialised courts for intellectual property (IP) rights protection and the absence of clearly defined responsibilities and functions for the public organisations that have a role in IPR-related disputes. Despite an extensive regulatory framework for IP protection (enshrined in the Civil Code, the Law on Patents, and the Law on Copyrights and Neighbouring Rights and recently amended in June 2022), businesses indeed report a significant number of contentious decisions (Government of Kazakhstan, 2022[28]). Discontent is particularly expressed in relation to procedural aspects such as the lack of specific qualification of judges, a great variability in the interpretation of laws, the lack of qualified experts for expertise and the high cost of their services.

More support to domestic businesses’ use of dispute resolution tools, and an improved protection of intellectual property rights are required for better contract enforcement

The government should pursue its efforts to improve the quality of the court system

The government should closely monitor and assess the implementation of the new rules on judicial independence and continue to improve them. The reforms conducted in recent years have contributed to the development of a more independent court system of better quality. However, avoiding a hasty implementation is key to ensure that the changes are properly understood by judicial institutions and that the framework designed by renewed rules is properly applied. Therefore, the government should consider conducting trainings for the judges to build the required institutional capacity. It must be noted that, since some provisions have a delayed implementation (e.g., acquiring applicability only from the 1 January 2024) and that changes always require some time to produce tangible results, it remains for now difficult to assess the effectiveness of the implementation of the reforms.

The government must also ensure that the provisions stated in the law are effectively enforced during the conduct of administrative proceedings by the courts. As per today’s situation, businesses’ perception of a persisting bias of court rulings in favour of the State, especially in relation to land rights, public procurement, and subsidies, might be attributable to a lack of awareness of the rights the new APC grants to them. Addressing this would require the government to improve businesses’ knowledge of the functioning of administrative courts.

The government should improve domestic businesses’ awareness of available alternative dispute resolution tools

In parallel to increasing the independence of the court system, the government should develop awareness-raising and outreach campaigns about the availability and functioning of other processes for dispute resolution. As for now, it seems that businesses remain unaware of available alternative dispute resolution tools, as well as time, cost, process and benefits to be expected from these procedures (OECD, 2023[3]). Therefore, the government should share resources, alongside information about the court system, about available processes for dispute resolution including out-of-court and alternative dispute resolution tools.

Targeted outreach campaigns could be developed in co-operation with the Business Ombudsman, Atameken, regional business chambers and sectoral business associations. The goal for them would be to identify their members’ most recurrent procedural complaints, as well as their main gaps in terms of procedural knowledge. Based on this, the government could develop targeted outreach media campaigns (dedicated website or page on the institution’s website, explanatory leaflets, and videos, etc.), implemented or relayed by the business associations2. The latter could also regularly organise online or in-person training sessions on the most common procedural issues faced by their members, inviting representatives of the competent dispute resolution bodies. On a related matter, the government should also ensure that IAC best arbitration practices are shared with domestic courts to contribute to the creation of a wider arbitration culture in Kazakhstan.

The government should set up an effective institutional framework for intellectual property rights enforcement

Effectively protecting IPR in Kazakhstan requires building the technical expertise of judges. A focus on building the technical expertise of judges, in particular for patent enforcement, in civil and criminal courts can support the effective protection of IPR and advance Kazakhstan’s ambitions to support innovation. As a first step, developing IP expertise in these courts would require creating specialist IP benches within them and allow courts to call on a third-party institution with IP expertise, such as the National Institute of Intellectual Property, or inviting “friends of the court” (amicus curiae) briefs to express their views on a given issue in a dispute. In parallel, judges with a representative level of expertise in the relevant areas for IPR disputes should be appointed where possible, while ensuring that all judges having to deal with IP matters are provided with mandatory continuing education and training opportunities and encouraged to engage in exchanges with international IP courts to allow them to keep abreast of the rapid evolution of IP law and related legal concepts and developments. Finally, courts should be encouraged to publish IP case decisions on online databases both to improve transparency of judicial processes and to build precedents other judges might draw upon (Gurgula, Padamczyk and Shemtov, 2022[29]; de Werra, 2019[30]).

Priority 3: Trade procedures have become more accessible and protective of IP rights, but restrictions to trade remain in the services sector

Kazakhstan has improved the regulatory framework, with a focus on digitalisation of procedures and intellectual property rights

Developing international trade has been a longstanding priority of Kazakhstan’s government to support the diversification agenda for its economy, against the backdrop of the country’s landlocked position. The government has been actively developing an open and fair regulatory framework, which culminated in the country’s accession to the WTO in 2015, and it has been deepening its regional integration through its membership in the Eurasian Customs Union (Belarus-Kazakhstan-Russia) and then the Eurasian Economic Union (EEU), as well as in the Central Asia Regional Economic Cooperation (CAREC). Since 2017, the country has been constantly improving its trade facilitation framework, with a strong focus on improving the transparency and predictability of trade-related information, through the streamlining of documentation requirements and processes, an increased role of digital tools, and improved internal border agency co-operation (Box 2.5) (OECD, 2023[3]).

Kazakhstan launched several online trade portals and single windows and reformed the Customs Code to favour digitalisation of border procedures. For instance, the Single Window for Export-Import Operations, the Kazakhstan Trade Portal, the Trade Facilitation Information Portal, as well as the Automated System of Customs and Tax Authorities (ASTANA-1) customs border portal, provide firms e-permits, information, references, and documents related to exports (Atameken, 2019[31]; OECD, 2023 forthcoming[18]). In particular, the introduction of ASTANA-1, compliant with the WTO, European Union and UNCTAD Customs standards, in January 2020, has been an important step to bring down the time and cost of trade by allowing fully automated customs procedures and the harmonisation and digitisation of all customs- and trade-related documentation. In 2021, reforms to the Customs Code further advanced the digitalisation of procedures, by allowing applications for a preliminary electronic classification of goods from the State Revenue Committee which reduced by half (from 20 to 10 working days) the review period for classification of goods (Government of Kazakhstan, 2021[32]). Additional reforms include the introduction of a new risk management system for on-site audits, increasing the number of cases when customs declarants are not accountable under the Administrative Violations Code, as well as the authorisation for foreign individuals and businesses to import and declare goods at a port of entry without the support of domestic customs brokers. However, business report that in practice, foreign individuals and businesses may still need domestic customs brokers in order to file electronic customs declarations, due to customs software compatibility issues (U.S. Department of Commerce, 2022[33]).  

Finally, Kazakhstan has also been successful in developing a legal framework more protective of intellectual property rights in relation to international trade. In particular, a new law adopted in June 2022, and accompanied by a Roadmap, has introduced a series of protections such as geographical indications and appellations of origin, a system of short-term protection of unregistered industrial designs, and an opposition system for trademarks, as well as clarification of qualification requirements for patent attorneys (Government of Kazakhstan, 2022[28]). If these amendments may open up new opportunities for domestic producers to enter global markets, their implementation and effect on businesses have yet to be assessed.

Box 2.5. Kazakhstan’s performance in the OECD Trade Facilitation Indicators

The 2022 TFIs database highlights that Kazakhstan has consistently improved its performance since 2017 across all areas covered by the TFIs. Areas where improvements are most notable concern making trade-related information available, advance rulings, simplification and harmonisation of trade-related documents, automation and streamlining of border procedures, as well as domestic border agency co-operation.

Figure 2.3. Kazakhstan’s trade facilitation performance since 2017

Legend: A - Information availability, B - Involvement of the trade community, C - Advance rulings, D - Appeal procedures, E - Fees and charges, F - Documents, G - Automation, H - Procedures, I - Internal border agency co-operation, J - External border agency co-operation, K - Governance and impartiality.

Note: 2 is the maximum score. Central Asia includes information for Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

Source: (OECD, 2023[34])

Kazakhstan also performs above the TFIs average for the group of upper-middle income economies in many areas relating to transparency and predictability (involvement of the trade community, advance rulings, appeal procedures, fees and charges) as well as the automation of border procedures). Fees and charges and advance rulings are also areas where Kazakhstan is on par or above the average performance in the OECD area.

The 2022 TFIs database also reveals Kazakhstan as the overall top performer in Central Asia. It performs better than the other economies in the region covered by the database (Kyrgyz Republic, Tajikistan, Uzbekistan) in the majority of the TFIs areas, except for information availability and governance and impartiality.

Implementation lags behind for trade facilitation and regulatory barriers to services trade remain

Implementation and access to trade-related information remain an issue for businesses

Despite these de jure improvements, firms continue to report persisting cumbersome trade procedures and unpredictable implementation. In a recent OECD survey, over a third of respondents indicated that improvements to trade and customs regulation should be a government priority, while only 3% said that major progress had been made in this area over the past five years (OECD, 2023[3]). It seems that the implementation gap arises mainly from an entanglement of policies and lack of information about regulatory and legislative changes on the side of businesses and implementing agencies, which leave room for varying interpretations.

Information is fragmented across several platforms. The coexistence of several online trade portals, ranging from information provision to registration of online procedures, also serves to complicate firms’ access to information, especially for the smallest among them, which limits the reach of these tools and reforms.

Arbitrary interpretation of the Customs Code by customs officials is most frequently cited in relation to transit declarations and the non-use of electronic queuing. For instance, the US Department of Commerce reports that so-called transaction passports for goods clearance can vary in nature, ranging from document procurements to bank transfers, and represent a significant barrier to trade (U.S. Department of Commerce, 2022[33]). Similarly, online pre-declarations are not always functional, and are sometimes duplicated by paper procedures at border ports. Customs processing can also remain costly and cumbersome due to an absence of priority procedures, for instance for perishable goods despite the relevant example of the “green corridors” implemented during the pandemic, or because of targeted requirements, such as the one applicable to equipment and spare parts imported to implement an investment project, which need to be placed in a temporary storage warehouse operated by a customs-licensee pending clearance (OECD, 2021[10]; U.S. Department of Commerce, 2022[33]).

Regulatory barriers to services trade remain an impediment for both domestic and international firms

Despite a relatively open overall regulatory framework for investment, restrictions remain in crucial sectors necessary for the broader competitiveness of the economy, especially services trade. The OECD Services Trade Restrictiveness Index (STRI) reveals that Kazakhstan is the seventh most restrictive of the 50 economies covered by the index, even if services trade restrictions have been somewhat relaxed in recent years following the country’s WTO accession (OECD, 2023[3]). Investors face more restrictions in relation to trade and investment than in most OECD and non-OECD countries, particularly in relation to work permitting issues for foreign nationals looking to provide short-term services, the maintenance of foreign investment screening mechanisms, limited access to public procurement for foreign service suppliers, and restrictions on the acquisition of land and real estate by foreigners (OECD, 2022[35]).

Among the most heavily regulated service sectors are the ones in logistics and related services. This weighs negatively on the operational environment for both domestic and international firms, in particular on their ability to deepen regional integration and engage in international trade by integrating regional and global value chains. This issue is even more important in the current context, where the country will have to open new trade routes and diversify its exporting partners to successfully navigate the tensions arising from sanctions on Russia and associated trade blocs of which Kazakhstan is a member (OECD, 2022[15]).

Figure 2.4. OECD Services Trade Restrictiveness Index: Kazakhstan (2022)

Note: The maximum score 1 represents the highest level of regulation, often in relation to a total State monopoly, which is for instance the case for rail freight transport in Kazakhstan.

Source: (OECD, 2022[35]).

Further improving trade facilitation requires additional progress on implementation of reforms and the easing of regulatory barriers to services trade

The government should focus on closing the implementation gap and improving access to trade-related information for businesses

On the trade facilitation front, the government should more actively and systematically involve the trade and business community. Closing the remaining implementation gap will help Kazakhstan’s firms engage more in international trade, and the government to continue deepening regional integration (OECD, 2023 forthcoming[18]). In particular, the government should develop institutional feedback mechanisms in the form of regular meetings to discuss implementation issues in relation to customs procedures and regulatory and legislative changes. Online reporting tools or regular surveys could also be developed and channelled through Atameken, regional and sectoral business associations. Finally, the government could also establish an inter-governmental steering committee, for instance under the authority of the Ministry of Trade and Integration (MTI), monitoring implementation of trade-related decisions, or a joint working group between businesses, customs, and state administration to decrease barriers at customs.

However, these tools will only be effective if businesses are better aware of trade-related information, decisions, and legislation. To do so, the government should develop outreach tools such as improved publication of applicable legislation on the website of relevant authorities (key among which QazTrade, the MTI and the Customs authorities), as well as harmonise the several existing trade portals. This information can be complemented by thematic interactive pages for businesses, and the development of online and physical enquiry points. Finally, as regards legislative and regulatory changes, the government could introduce systematic notice-and-comment procedures that are communicated about using the most relevant channels to reach concerned businesses (for instance through Atameken).

The government should also rationalise services trade regulation and improve regional cooperation to keep trade flowing

On the business and investment climate front, the government should continue liberalising services trade regulation. Keeping trade flowing, developing new trade routes and joining new regional and global value chains are an important challenge for landlocked Kazakhstan in a context of mounting regional and international tensions. The government therefore should focus on rationalising regulation in logistics and related services sectors and aligning it with regional neighbours and its international commitments under the WTO. Similarly, the government should continue advancing effective regional integration by developing interconnected transit information systems with other countries in the region and harmonising customs documents and requirements.

References

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[40] Bureau of National Statistics of Kazakhstan (2023), Labour Productivity GVA (database), https://stat.gov.kz/en/industries/economy/national-accounts/dynamic-tables/.

[39] Council of Europe (2022), Centre for Alternative Dispute Resolution launches an awareness raising initiative about benefits of mediation “Through mediation to an agreement - choose an alternative”, https://www.coe.int/en/web/podgorica/-/centre-for-alternative-dispute-resolution-launches-an-awareness-raising-initiative-about-benefits-of-mediation-through-mediation-to-an-agreement-choos.

[30] de Werra, J. (2019), A closer look at specialized intellectual property courts, https://www.wipo.int/wipo_magazine/en/2019/03/article_0005.html.

[17] EBRD (2022), Regional Economic Update - In the shadow of the war, https://www.ebrd.com/rep-ukraine-war-310322.pdf.

[13] EBRD (2022), Transition Report 2021-22. System upgrade: Delivering the digital dividend, https://www.ebrd.com/publications/transition-report-202122-digital-divides.

[26] Government of Kazakhstan (2023), Constitutional Court of Kazkahstan, https://www.gov.kz/memleket/entities/ksrk?lang=en.

[27] Government of Kazakhstan (2023), e-Otinish Submission of appeals to government agencies, https://eotinish.kz/.

[28] Government of Kazakhstan (2022), Law of the Republic of Kazakhstan “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Improvement of Legislation in the Field of Intellectual Property and State-Guaranteed Legal Aid”.

[32] Government of Kazakhstan (2021), Customs Code of the Republic of Kazakhstan, https://adilet.zan.kz/eng/docs/K1700000123.

[19] Government of Kazakhstan (2021), “Law on the Republic of Kazakhstan”, "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the Introduction of a New Regulatory Policy in the Sphere of Business Activities and Redistribution of Certain Functions of Internal Affairs Bodies", https://adilet.zan.kz/rus/docs/Z2100000095 (accessed on 6 July 2023).

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[29] Gurgula, O., M. Padamczyk and N. Shemtov (2022), Specialised IP Judiciary: What Are the Key Elements to Consider when Establishing or Reforming an Effective IP Court?, pp. Pages 206–212, https://doi.org/10.1093/grurint/ikab172.

[20] IEA (2022), Environmental Code of the Republic of Kazakhstan, No. 400-VI, IEA Publishing, Paris, https://www.iea.org/policies/12917-environmental-code-of-the-republic-of-kazakhstan-400-vi-as-amended.

[8] ILO (2023), Labour productivity, https://ilostat.ilo.org/topics/labour-productivity/.

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[1] OECD (2020), Improving the Legal Environment for Business and Investment in Central Asia, OECD Publishing, https://www.oecd.org/eurasia/Improving-LEB-CA-ENG%2020%20April.pdf.

[23] OECD (2020), OECD Best Practice Principles for Regulatory Policy, OECD Publishing, https://doi.org/10.1787/7a9638cb-en.

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[5] OECD (2017), Reforming Kazakhstan, OECD Publishing, https://www.oecd.org/eurasia/countries/OECD-Eurasia-Reforming-Kazakhstan-EN.pdf.

[18] OECD (2023 forthcoming), Improving trade connectivity in Kazakhstan.

[33] U.S. Department of Commerce (2022), Kazakhstan - Country Commercial Guide, https://www.trade.gov/country-commercial-guides/kazakhstan-customs-regulations.

[9] World Bank (2022), Europe and Central Asia Economic Update, Spring 2022: War in the Region, https://openknowledge.worldbank.org/handle/10986/37268.

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[24] ZOiS (2021), “The Republic of Kazakhstan’s New Administrative Procedures Code”, ZOiS Spotlight 25, https://www.zois-berlin.de/en/publications/the-republic-of-kazakhstans-new-administrative-procedures-code.

Notes

← 1.  Data varies between sources: according to Atameken, between 2019 and 2021 the total number of business inspections has decreased almost 4 times or by 74.6% (from 128 364 to 32 566 inspections), and by 9 times for SMEs (from 93,175 inspections to 10,127); according to the Prosecutor General's Office, the number of inspections for SMEs decreased, by 7 times (from 64,009 to 9,335) between 2019 and 2020, and 6 times between 2019 and 2021 (10,127).

← 2.  For instance, in Montenegro, the Council of Europe in collaboration with the Centre for Alternative Dispute Resolution has developed such outreach programmes, combining targeted media campaigns with training sessions to increase awareness about alternative dispute resolution procedures in the country (Council of Europe, 2022[39]).