Currency Transactions Registration

RusEnergyLaw JOURNAL • 2'2003/Table of Contents • Article

On July 25, 2003 the National Bank of the Republic of Kazakhstan adopted the new Rules for licensing of the transactions connected with the usage of the currency values and the Rules for registration of the currency transactions connected with the capital flow and opening of accounts abroad (July 4, 2003).

The new Rules adoption is connected with the changes in the legislative acts on the currency regulation made in spring of the current year and aiming at the liberalization of the currency regime in the territory of RK.

1. Currency Transactions Licensing

The following types of the currency transactions are the subject to licensing:

1) retail sale and services performance for the cash foreign currency;

2) opening of the accounts with the foreign banks by the residents;

3) residents’ investments to abroad;

4) residents’ remittances in favour of nonresidents for transactions providing the. transfer of the property rights for the real estate payment;

5) residents’ remittances in favour of nonresidents for payments on the import transactions providing the advance payment for the goods (works, services) for the period exceeding 180 days and excess of the period of the currency receipt in return for the goods (works, services) export by the residents proceeds for more than 180 days from the goods (works, services) export date;

6) receipt of the payments for the export of particular goods, the list of which is established by the Government of the Republic of Kazakhstan, by the residents from the nonresidents, if the period between the goods export date and export proceeds receipt exceeds 365 days;

7) granting credits for the period exceeding 180 days by the residents (except for the banks) to the nonresidents;

8) charging of the foreign currency received by the resident as a credit from the nonresident to the accounts of the third parties:

9) transfer of the currency values for the asset management by the resident to the nonresident.

It is important to pay attention to the fact that according to the new Rules the new requirements for the subjects applying for the license are established:

absence of the tax debts (shall be confirmed by the relevant certificate from the tax committee);

absence of the outstanding debts on the credits granted from the Republican and the local budgets.

As before, the basis for non-issuance of the license is also the outstanding debts on the credits to the Kazakhstan! banks. Previously, the grace period for the advance payments for the goods on import transactions requiring the license from the National Bank consisted of 120 days. The Rules provide for a new period of 180 days. The price limit for the export-import transaction requiring the license of the National Bank has been raised from 5 000 to 10 000 USA dollars.

2. Currency Transactions Registration

The following is to be registered:

1) currency transactions connected with the capital flow providing for the property (funds) receipt in the Republic of Kazakhstan and/or arising of the obligations for the funds return to the nonresident to the amount exceeding the equivalent of 100 thousand USA dollars:

credits receipt from nonresidents for the period exceeding 180 days including the financial leasing;

crediting of the export/import transactions by the nonresidents:

nonresidents’ investments in the Republic of Kazakhstan in the form of direct and portfolio investment including the primary distribution of the residents’ securities in the international capital markets including the issue of the depository receipts for the residents’ securities;

nonresidents’ remittances for the payment of the full transfer of the exclusive right for the objects of intellectual property by the residents;

nonresidents’ remittances in return for the property rights for the real estate;

2) direct investments of the residents in the countries of the Organization for Economic Cooperation and Development (OECD) and (or) countries, with which the Republic of Kazakhstan has concluded and ratified the international treaties on the mutual investments encouragement and protection, in the result of which the resident making investments will possess fifty and more percent of the voting shares (fifty and more votes of the participants) for the investment object;

3) opening of the accounts abroad with a foreign bank by the resident physical person, if the foreign bank is registered and located in the state, which has a long-term credit rating not less than "A" (according to the classification of Standars&Poor’s or Fitch rating agencies) or "A2" (according to the classification of Moody’s Investors Service rating agency) and is the OECD member.

Previously, if the advance payment of the nonresident in return for the goods purchased by him from the resident or received by the resident delay of payment in return for the goods imported to Kazakhstan exceeded 120 days, the currency legislation required the contract registration. Now this period consists of 180 days.

The registration certificate shall be issued within 10 business days from the date of submission of the complete set of documents. Thereby, the license of the National Bank is required for the resident to grant a commercial credit on the export-import transaction or money advance to the nonresident.

Otherwise, when the nonresident grants a credit to the Kazakhstani resident, the contract registration at the National Bank is required.

3. Transaction Passport

It is necessary to note that receipt of the license or registration certificate does not release the exporter or importer from (and moreover, it is an obligatory condition for the receipt) the transaction passport, if required.

The transaction passport is one of the documents of the currency control. It shall be filled in by the party of the export-import transaction, which is a Kazakhstani resident.

Opening of the transaction passport is necessary for the external economic transactions, the amount of which exceeds 5 000 USA dollars. The contract should contain the detailed requisites of its contracting parties.

If the goods are paid by the nonresident importer after the goods shipment from Kazakhstan, the contract should contain the precise terms of the goods return in case of nonpayment of the goods exported by the resident.

The similar situation is with the case, if the resident importer makes an advance payment for the goods before their importation to Kazakhstan. It is required to specify in the contract the precise terms of return of money transferred to pay for the goods imported by the resident.

Our company has a great experience in the legal conduct of the currency transactions and would be glad to perform its services for you in receiving of the registration certificates and licenses for the currency transactions, as well as open the transaction passports.

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