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Committee on Regulation of Natural Monopolies and Protection of Competition under the Ministry of National Economy of the Republic of Kazakhstan

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010000 Nur-Sultan,
Orynbor street 8, entrance 4
Chancery phone: +7 (7172) 74-34-01, 74-36-69
E-mail: k.kensekremzk@economy.gov.kz
Helpline: +7 (7172) 74-33-82

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Transparency of tariff regulation process

Regulations on the Committee

No.34 dated September 30, 2014

On approval of the Statute on the Committee on regulation on natural monopolies and protection of competition of the Ministry of National Economy of the Republic of Kazakhstan

In accordance with subparagraph 6)of paragraph 1of the article 29 of the Law of the Republic of Kazakhstan dated March 24, 1998 “On regulatory legal acts” and by the Decree of the Government of the Republic of Kazakhstan No.933 dated August 14, 2014, “On institutions of the central executive bodies of the Republic of Kazakhstan”  and by the Decree of the Government of the Republic of Kazakhstan No.1011 dated September 24, 2014 “Issues of the Ministry of National Economy of the Republic of Kazakhstan”, I ORDER:

1. to approve the applied Statute on the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan.

2. the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan (Zhumangarin S.M.) in the legally established manner shall provide:

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

2) to submit it to the official publication in periodicals and in “Adilet” information and legal system within ten calendar days after the state registration of this order,;

3) to place this order on the internet-resource of the Ministry of National Economy of the Republic of Kazakhstan.

3. This order shall come into force since its first official publication.

Ye.Dossayev, the Minister
Approved by the order of the Minister
of National Economy of the Republic of Kazakhstan
No.34 dated September 30, 2014

Statute
on the Committee on regulation of natural monopolies and protection of competition of the Ministry of National Economy of the Republic of Kazakhstan

1. General provisions

1. The Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan (hereinafter – the Committee) is the state body of the Republic of Kazakhstan in the field of protection of competition and restriction of monopolistic activities on the relevant commodities markets, control and regulation of the activities related to the field of state monopoly and within the limits provided by the legislation, cross-sector coordination, regulation and control in the field of natural monopolies and regulated markets, excluding the field of telecommunications and postal service, in accordance with the legislation of the Republic of Kazakhstan, and control and regulation of the activities of energy producing and energy providing organizations in accordance with the Law of the Republic of Kazakhstan “On electric energy” and other special executive, authoritative and control functions;

2. The Committee carries out its activities in accordance with the Constitution and the laws of the Republic of Kazakhstan, acts of the President and the Government of the Republic of Kazakhstan, other regulatory legal acts and this Statute.

3. The Committee is the legal entity in organization and legal form of the state authority, has the seals and the stamps with its own name in the national language, standard forms, accounts in the treasury authorities in accordance with the legislation of the Republic of Kazakhstan.

4. The Committee enters civil law relations on its own behalf.

5. The Committee is entitled to be the party of the civil relations on behalf of the state, if it is authorized for it in accordance with the legislation of the Republic of Kazakhstan.

6. On the issues of its own competence, the Committee in the legally established order shall make decisions approved by the orders of the Chairman of the Committee and other acts provided by the legislation of the Republic of Kazakhstan.

7. The structure and the staff number of the Committee shall be approved in accordance with the applicable legislation.

8. The legal address of the Committee: 010000, Astana city, “Yessil” district, 8 Orynbor str., entrance 4, “House of Ministries” administrative building.

9. Full name of the state body – Republican state enterprise “Committee on Regulation of natural monopolies and protection of competition of the Ministry of National Economy of the Republic of Kazakhstan”.

10. This Statute is the constituent document of the Committee.

11. The activities of the Committee are funded from the republican budget.

12. The Committee shall be not allowed to enter into the contract relations with the entrepreneurs subject to the execution of the obligations which are the functions of the Committee.

If the Committee is entitled by the legislative acts to carry out profitable activities, then the revenues received from such activities shall be submitted to the republican budget.

2. The main objectives, functions, rights and obligations of the Committee

13. The objective:

1) participation in formation of the state policy in the field of natural monopolies and in regulated markets;

2) participation in formation of the state policy in the field of protection of competition and restriction of monopolistic activities.

14. Functions:

1) international cooperation on the matters within the competence of the antimonopoly body;

2) carrying out the cross-industry coordination of the state authorities and other organizations in the field of protection of competition and restriction of monopolistic activities;

3) development and approval of the regulatory legal acts within its competence;

4) analysis of the areas of natural monopolies for associating the services (goods, works) provided by the subjects of natural monopolies within these areas with regulated services;

5) generalization of the practical application of the legislation of the Republic of Kazakhstan on natural monopolies and regulated markets;

6) monitoring of the efficiency of the implementation of the investment programs and investment projects of the subjects of natural monopolies;

7) analysis of the information provided by the subjects of natural monopolies on investment programs (projects) execution;

8) approval of tariffs (prices, rates) or their limit levels for the regulated services (goods, works) of the subjects of natural monopolies;

9) formation and keeping of the State register of the subjects of natural monopolies;

10) approval of the tariff estimates for the regulated services (goods, works) of the subjects of natural monopolies;

11) public hearings in considering the applications of the subjects of natural monopolies for the approval of the tariffs (prices, rates) or their limit levels;

12) approval of the regulatory technical losses of the subjects of natural monopolies;

13) approval of the technical and technological standards of consumption of raw materials, materials, fuel, energy of the subject of natural monopolies, excluding the regional electric grid company;

14) approval of the temporary reducing coefficient to the tariffs (prices, rates) for the regulated services of the subjects of natural monopolies;

15) approval of the temporary compensatory tariff for the regulated services of the subjects of natural monopolies;

16) calculation of the profit rate (net income) for the regulated base of the utilized assets included in the tariffs (process, rates) for the subjects of natural monopolies;

17) approval of the standard number of staff of the subject of natural monopoly, excluding the regional electrical grid company;

18) introduction of proposals to the central administration on the types of activities, technologically associated with the regulated services (goods, works) for their approval;

19) financial and (or) technical expertise of the activities of the subjects of natural monopolies;

20) adjustment of the staff schedules of the subjects of natural monopolies with participation of the state in the shared capital and the subjects of natural monopolies affiliated with the legal entities with participation of the state in the shared capital;

21) adjustment of the limit level of remuneration for the managing employees of administrative staff of the subjects of natural monopolies with participation of the state in the shared capital and the subjects of natural monopolies affiliated with the legal entities with participation of the state in the shared capital;

22) approval of the annual estimate of costs, aimed at repair and overhaul and other repair works, which do not lead to an increase in the value of the fixed assets of the subject of natural monopoly, with the exception of the regional power grid company;

23) approval of the concessional proposal, feasibility study of the concessional project, tender documentation, draft concessional contract, including their changing and amending, changes and amendments into the concession contract in the part of the procedure of formation and approval of the tariffs (prices, rates) for the services (goods, works) associated with the natural monopolies;

24) definition of the reasonable amount of consumption of the regulated water supply services by the individuals in order, provided by the Government of the Republic of Kazakhstan;

25) licensing in accordance with the legislation of the Republic of Kazakhstan on licensing;

26) approval of the charging amount and mechanism for the purchase and installation of metering devices for the regulated utilities (goods, works);

27) approval of revaluation of the fixed assets of a natural monopoly;

28) approval of the candidate of the assigned rehabilitation manager and the rehabilitation plan of the subject of natural monopoly;

29) approval of the methods of separate accounting of incomes, costs and operating assets by types of regulated services of the subject of natural monopolies;

30) approval of the accounting policy of the subject of natural monopolies;

31) coordination of the approval of the list of station tracks, power supply facilities, alarm system, communication, devices, equipment, buildings, structures, constructions and other facilities, technologically necessary for the functioning of the main railway network;

32) approval of the investment programs and (or) investment projects of the subjects of natural monopolies, taken into account when determining the tariffs (prices, rates) or their limit levels, together with the relevant state body;

33) regulation of prices for goods (works, services) of the regulated market entities in the field of rail transport, electrical and heat energy, production of petroleum products, oil transportation, civil aviation, port activities and gas taking into account the specifications established by the Law of the Republic of Kazakhstan “On gas and gas supply”;

34) regulation of prices for products, goods and services according to the nomenclature established by the Government of the Republic of Kazakhstan;

35) conclusion of the investment agreement with the energy-producing organizations;

36) approval of individual tariff for energy producing organizations in the order established by the Government of the Republic of Kazakhstan;

37) keeping the register of licenses;

38) identifying the applicant's compliance with the qualification requirements in the issuance of the license and (or) an application to the license;

39) maintenance, placement and ten-day update on the official Internet resource of the register of organizations having the license to carry out the activities on the purchase of electric energy for power supply;

40) provision of mobilization work and protection of state secrets within its competence;

41) information distribution via the mass media about violations of the legislation on natural monopolies and regulated markets and prosecution of the perpetrators;

42) coordination of the investment programs of oil producers, excluding small power producers of petroleum products;

43) approval of the design and construction of backup (shunt) transmission lines and substations, and the sale, lease or transfer to the trust management of power facilities and (or) their parts, regardless of the ownership form;

44) approval of alienation and (or) performance of other transactions with the property of the subject of natural monopoly, intended for the production and provision of the regulated services (goods, works), if the balance cost of the alienated property or the property of the subject of natural monopoly in relation to which other transactions are carried out, taken into account in the accounting balance for the start of the current year, exceeds 0,05 percent of the balance cost of its assets in accordance with the accounting balance for the start of the current year, in condition that they will not cause the raise in tariffs (prices, rates) or their limit levels for the regulated services (goods, works) of the subject of natural monopoly, breach of the contracts with the consumers, breach of inseparably associated technological scheme, interruption or significant reduction of the volumes of provided regulated services (produced goods, works), excluding the subject of natural monopolies providing notification on such action performance;

45) approval of the purchase of goods (works, services) by the subject of natural monopolies not intended for its own use, transported or transferred to them, excluding the subjects of natural monopolies of low capacity which provide the notification on such action performance;

46) approval of the rental by the subject of natural monopolies the property used for provision of regulated services (goods, works), the balance cost of which, recorded in the accounting balance for the start of the current year, exceeds 0,05 percent of the balance cost of its assets in accordance with the accounting balance for the beginning of this year in condition that the conclusion of the contract for the lease of property will not cause the raise in tariffs (prices, rates) or their limit levels for the regulated services (goods, works) of the subject of natural monopolies, breach of the contracts with the consumers, breach of inseparably associated technological scheme, interruption or significant reduction of the volumes of provided regulated services (produced goods, works), excluding the subjects of natural monopolies of low capacity providing notification on such action performance;

47) approval of performance of the activities permitted by the Law of the Republic of Kazakhstan “On natural monopolies and regulated markets” by the subject of natural monopoly, excluding the subjects of natural monopolies providing the airport services, providing the notification on performance of such actions;

48) approval of the purchase of the shares (participation shares) by the subject of natural monopoly, and other forms of its participation in commercial organizations performing the activities permitted by the Law of the Republic of Kazakhstan “On natural monopolies and regulated markets”, excluding the subjects of natural monopolies of low capacity, providing the notification on performance of such action and the cases of participation of the subjects of natural monopolies in the activities of  accounting and finance center on support of the renewable energy sources in accordance with the legislation of the Republic of Kazakhstan in the field of supporting the use of renewable energy sources;

49) approval of reorganization and liquidation of the subject of natural monopoly, excluding the subjects of natural monopolies of low capacity providing notification on performance of such action;

50) consideration of the notification on the purchase of over ten percent of voting shares (participation shares) in the shared capital of the subject of natural monopoly by the individuals and legal entities (or group of entities);

51) control of the activities of the subjects of natural monopolies for compliance with the requirements of the legislation of the Republic of Kazakhstan on natural monopolies and regulated markets;

52) conducting the inspection of the activities of the subjects of natural monopolies;

53) initiation and consideration of cases on administrative offences and imposition of administrative penalties;

54) carrying out the license control;

55) pronouncement of the instruction in case of the breach of the legislation of the Republic of Kazakhstan;

56) development and coordination of proposals for inclusion into the list of regulated services (goods, works) of the subjects of natural monopolies, approved by the Government of the Republic of Kazakhstan with the state body performing the inter-industry and inter-regional coordination of development of the main activities of the state social and economic policy;

57) development of standard contracts, concluded by the subjects of natural monopolies with the consumers of the regulated services (goods, works);

58) development and use of nondiscriminatory methods of tariffs (prices, rates, charges) or their limit levels calculation for the regulated services (goods, works) of the subjects of natural monopolies and regulatory legal acts, obligatory for performance by the state bodies and the subjects of natural monopolies;

59) development of draft qualification requirements and the rules of licensing for the certain types of activities;

60) development and application of the special procedure for the costs formation applied in approval of the tariffs (prices, rates, charges) or their limit levels for the regulated services (goods, works) of the subjects of natural monopolies;

61) definition of the technical conditions of non-discriminatory access in the field of railway transport, electrical and heating energy, aviation, port activities;

62) control of the pricing established by the subjects of regulated markets, and their performance of the obligations established by the legislation of the Republic of Kazakhstan on natural monopolies and regulated markets, and the established prices for which the state regulation is introduced;

63) participation in working out of the proposals within the provided authorities on formation of the state policy in the areas (fields) of state management under the control of the Committee;

64) approval of the limit prices level for the wholesale of commercial and liquefied oil gas in the domestic market;

65) development of the procedure for defining the limit price for the retail sale of oil products for which the state regulation of prices is established;

66) formation and keeping the State register of the market entities having dominating and monopolistic position;

67) carrying out control and regulation of the activities related to the state monopoly;

68) control of compliance of the subjects of state monopolies with the restrictions established by the Law of the Republic of Kazakhstan “On Competition”;

69) control of the economic concentration;

70) state control of the compliance with the antimonopoly legislation of the Republic of Kazakhstan;

71) suppression of acts, actions (inaction) of the state bodies aimed at limiting and (or) eliminating the competition;

72) prevention and elimination of abusing dominant or monopolistic position on the relevant market;

73) prevention and suppression of anti-competitive agreements and agreed actions of the market entities, unfair competition;

74) implementation of the analysis and assessment of competitive environment on commodity markets;

75) analyzing and monitoring the activities of market entities occupying dominant or monopolistic position on the relevant market;

76) identifying monopolistically high (low), monopsony low prices set by the market entity having dominant or monopolistic position, except for the market entities selling goods in regulated markets;

77) conducting investigations of violations of the antimonopoly legislation of the Republic of Kazakhstan by the market entities and state bodies in the order established by the legislation of the Republic of Kazakhstan on competition;

78) requesting and receiving the information, required to exercise the powers provided by the antimonopoly legislation of the Republic of Kazakhstan, including the information constituting commercial and other secrets protected by law, in the manner prescribed by the laws of the Republic of Kazakhstan, from government agencies, including the authorized body in the field of state statistics, tax and customs authorities, market participants, as well as officials and other individuals and entities;

79) pronouncement of the mandatory instructions to the market entities on:

elimination of violations of the antimonopoly legislation of the Republic of Kazakhstan and their consequences;

the restoration of the original position;

dissolution or modification of contracts that contradict the antimonopoly legislation of the Republic of Kazakhstan;

conclusion of the contract with another market entity, if the violation is an unjustified refusal or evasion from the conclusion of the agreement with the specific sellers (suppliers) or purchasers;

80) by own initiative or by the application of the interested party, reconsideration of the instruction (own or provided by the regional body), as well as checking the instructions approved by the regional authorities of the antimonopoly body, in cases provided by the antimonopoly legislation of the Republic of Kazakhstan;

81) provision of recommendations for the central office on conducting the activities aimed to protect and develop the competition in the commodities markets of the Republic of Kazakhstan;

82) preliminary coordination of creation of the state enterprises, legal entities, over fifty percent of shares of which belongs to the state and affiliated entities, excluding the cases when such creation is directly provided by laws of the Republic of Kazakhstan;

83) provision of the analytical information and monitoring data on the state of the competition on the commodities markets to the law-enforcement bodies;

84) identification of the limits of the relevant commodities markets;

85) standard forms development:

petition on the implementation of the economic concentration;

petition on creation of a state enterprise, legal entity, more than fifty percent of shares (interests) of which is owned by the state, and their affiliated entities;

quarterly information provided by the market entities on monopoly types of products, on the production and sales volumes, sales prices and the level of profitability from the sold monopoly goods.

86) examination of the goods prices, produced and sold by the state monopoly entity;

87) provision of the prior written consent to the market entities to carry out transactions (actions), on the state registration, re-registration of market entities, as well as the rights on immovable property in cases stipulated by the antimonopoly legislation of the Republic of Kazakhstan;

88) submission to the registration authorities of the registry of market entities occupying dominant or monopolistic position in the relevant market, and the list of state-owned enterprises, legal entities, more than fifty percent of shares (interests) of which are owned by the state, their affiliated entities established with the antimonopoly body;

89) the development of a standard methodology for the analysis and assessment of competitive environment in the commodity market with the definition of criteria of interchangeability of goods, availability for the acquisition, as well as product market boundaries in relation to financial institutions - in coordination with the state body in charge of regulation and supervision of financial market and financial institutions;

90) the development of techniques for identifying monopolistically high (low) and monopsony low prices;

91) implementation of the state policy in the field of protection of competition and restriction of monopolistic activities;

92) introduction of binding orders for the state authorities to cancel or change the acts adopted by them, on the termination of violations, as well as dissolution or modification of agreements that contradict antimonopoly legislation of the Republic of Kazakhstan;

93) in the cases established by the antimonopoly legislation of the Republic of Kazakhstan, an appeal to the court on compulsory division of the market entity or separation from its membership on the basis of its structural units of one or more legal entities, as well as with the request to release a market entity from the exemption monopoly revenue, obtained as a result of anti-competitive agreements or concerted practices;

94) coordination of activity of the regional bodies to approve the tariffs of natural monopolies taking into account socio-economic factors and the tariff establishment on the domestic market of the Republic of Kazakhstan;

95) performance of other functions provided by the laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan;

15. Rights and obligations:

1) to issue legal acts within its competence;

2) to request and receive necessary information and materials from the state bodies, organizations, their officials;

3) to make proposals for the development of regulatory legal acts within its competence;

4) to hold meetings, seminars, conferences, round tables, competitions and other events on matters within the competence of the Committee;

5) to establish consultative and deliberative, collegial bodies on the supervised activities;

6) to act as the government authority in respect of subordinate organizations;

7) to apply to the court to the extent of its competence;

8) to carry out international cooperation within its competence;

9) to delegate some of its powers and functions to the regional authorities;

10) to exercise other rights provided by the legislation of the Republic of Kazakhstan.

3. Organization of the Committee

16. Management of the Committee shall be performed by the Chairman, who is personally responsible for the implementation of the Committee’s tasks and functions.

17. The Chairman of the Committee shall be appointed and removed from office in accordance with the legislation of the Republic of Kazakhstan.

18. The Chairman of the Committee shall have deputies who are appointed and removed from office in accordance with the legislation of the Republic of Kazakhstan.

19. Powers of the Chairman:

1) defines the duties and powers of the heads of departments of the Committee;

2) appoints the executive secretary to assign the candidacy of heads of territorial bodies and their deputies;

3) approves regulations on structural and territorial subdivisions of the Committee;

4) exercise other powers in accordance with the laws and acts of the President of the Republic of Kazakhstan.

Enforcement of the powers of the Chairman during his absence shall be made by his deputy in accordance with applicable law.

20. The Chairman defines the powers of his deputies in accordance with the applicable law.

21. The Board is a collegial body of the Committee.

The members and powers of the Board shall be approved by the Minister of National Economy of the Republic of Kazakhstan.

4. Property of the Committee

22. The Committee may have the separate property on the basis of operative management right in cases stipulated by law.

The property of the Committee is formed at the expense of the property transferred to it by the state, as well as the property (including cash income), acquired as a result of its own activities and other sources not prohibited by the legislation of the Republic of Kazakhstan.

23. The property assigned to the Committee shall be the republican property.

24. The Committee has no right to alienate or otherwise dispose the property assigned to it and the property purchased at the expense of the funds allocated to it by the financing plan, unless otherwise provided by law.

5. Reorganization and abolition of the Committee

25. Reorganization and abolition of the Committee shall be performed in accordance with the legislation of the Republic of Kazakhstan.

List of organization under the control of the Committee

“Center of development and protection of the competitive policy” Joint Stock Company - 49 %.

List of territorial bodies under the control of the Committee

1. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Akmola region.

2. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Aktobe region.

3. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Almaty region.

4. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Atyrau region.

5. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in East Kazakhstan region.

6. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Zhambyl region.

7. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in West Kazakhstan region.

8. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Karaganda region.

9. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Kostanay region.

10. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Kyzylorda region.

11. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Mangistau region.

12. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Pavlodar region.

13. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in North Kazakhstan region.

14. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in South Kazakhstan region.

15. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Astana city.

16. Department of the Committee on Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan in Almaty city.