In accordance with subparagraph 40) of Article 9 of the Law of the Republic of Kazakhstan "On Industrial Policy", the Order of the Minister of Industry and Infrastructure Development of the Republic of Kazakhstan approved the Rules for Planning and Concluding Contracts aimed at the Development of Industry, as well as Monitoring their Implementation dated June 8, 2022 No. 325 (hereinafter – the Rules).

The Rules define the procedure for planning and implementing purchases aimed at the development of industry, as well as monitoring their implementation. Contracts aimed at the development of industry include the following types: - conclusion of offtake contracts providing for the long-term purchase of goods of the manufacturing industry, the production of which was previously absent; - conclusion of contract purchases, which provide, in addition to the purchase of goods of the manufacturing industry, conditions for investing part of the funds from the amount of the contract in the economy of the Republic of Kazakhstan.

The rules provide for the procedure for concluding these types of contracts in the following form: - an analysis of purchases and annual purchase plans of potential customers is carried out to form a List of demanded goods; - this list of goods is coordinated with interested parties and placed in the Database of GWS and their suppliers; - after placement in the Database, applications from potential suppliers are accepted to conclude contracts directed to for the development of industry; - further, a decision is made to conclude a contract, based on the applications considered.

This procedure for planning contracts will allow the introduction of regulated purchases and control the level of in-country value. In addition, the constant analysis of the procurement of subsoil users will allow you to have a clear vision of the state of the market, will allow you to focus on the manufacturing industries that require special attention. Also, within the framework of the Rules, there are standard requirements for the conclusion of offtake contracts and contract procurement contracts. For example, if the customer refuses to redeem the agreed volume of goods produced through no fault of the supplier, a penalty of 100% in the first year and 50% in subsequent years is provided.

In case of improper fulfillment by the supplier of the conditions under the offtake contract concluded with him, the customer withholds the amount in proportion to the advance amount received, according to the concluded contract. In addition, contract procurement contracts are carried out if the contract exceeds five hundred thousand times the size of the MCI.

At the same time, 7 additional conditions are provided that potential suppliers can choose at their discretion: direct investments (including investments in investment projects not directly related to the supplier of products); investments in research and development work; placement of production, including joint, on the territory of the Republic of Kazakhstan; construction specialized training centers, implementation of training and retraining programs for specialists of various fields for the Republic of Kazakhstan; development of infrastructure for servicing the purchased goods; transfer of technical documentation, licenses and other documents ensuring the transfer of technologies to the country; other conditions in accordance with the rules of planning and concluding contracts aimed at the development of industry, as well as monitoring their execution.

The Agreements aimed at the development of industry and these Rules are designed to develop a competitive manufacturing industry in the domestic market and create new types of production. In particular, contract procurement agreements will increase the level of investment in the Republic of Kazakhstan, and offtake contracts will allow for a policy of import substitution at the proper level.

You can get acquainted with these rules on the website adilet.gov.kz .