Comment to article 215. Violation of the procedure for forming a risk management and internal control system The Code of the Republic of Kazakhstan on Administrative Offences
1. Violation by financial organizations, with the exception of professional securities market participants who are not second-tier banks, of the procedure for forming a risk management and internal control system established by a regulatory legal act of the National Bank of the Republic of Kazakhstan, if the identified violations are not eliminated by the financial organization within the time limits established by the National Bank of the Republic of Kazakhstan, -
entails a fine on legal entities in the amount of one hundred monthly calculation indices.
2. Violation by the parent organization of the banking conglomerate or insurance group of the requirements for the risk management and internal control system on a consolidated basis, established by the regulatory legal act of the National Bank of the Republic of Kazakhstan, if the identified violations are not eliminated by the parent organization of the banking conglomerate or insurance group within the time limits established by the National Bank of the Republic of Kazakhstan, -
entails a fine on legal entities in the amount of one hundred monthly calculation indices.
The commented article establishes administrative responsibility for violating the procedure for forming a risk management and internal control system.
The generic object of offenses provided for in Article 215 of the Administrative Code is the procedure established in the legislation of the Republic of Kazakhstan and protected by the state for conducting business in the field of finance.
The direct object of administrative offenses provided for in the commented article is the procedure for forming a risk management and internal control system.
The subjective side of the acts provided for in Article 215 of the Administrative Code cannot be established in relation to legal entities.
Part 1 of the commented article establishes administrative liability for violations by financial organizations, with the exception of professional securities market participants who are not second-tier banks, of the procedure for forming a risk management and internal control system established by the regulatory legal act of the National Bank of the Republic of Kazakhstan, if the identified violations are not eliminated by the financial organization within the time limits set by the National Bank RK.
The subjects of the offense provided for in Part 1 of the commented article are financial organizations. At the same time, due to the direct indication in the commented norm, professional securities market participants who are not second-tier banks are not the subjects of the offense under part 1 of the commented article.
A financial institution is a legal entity engaged in business activities for the provision of financial services. Accordingly, financial services are the activities of participants in the insurance market, the securities market, the voluntary accumulative pension fund, banking, the activities of organizations conducting certain types of banking operations carried out on the basis of licenses obtained in accordance with the legislation of the Republic of Kazakhstan, as well as non–licensed activities: the unified accumulative pension fund; the central depository; a single operator in the field of accounting for state property in terms of exercising the functions of nominal holding of securities owned by the state, quasi-public sector entities, the list of which is approved by the authorized body for state property management, or in respect of which the state, these quasi-public sector entities have property rights; mutual insurance companies.
The objective side of the offense provided for in Part 1 of Article 215 of the Administrative Code is that the offender commits illegal actions that violate the procedure for forming a risk management and internal control system established by the regulatory legal act of the National Bank of the Republic of Kazakhstan, if the identified violations are not eliminated by the financial institution within the time limits set by the National Bank of the Republic of Kazakhstan.
As required by Articles 40-5 of the Law of the Republic of Kazakhstan "On Banks and Banking Activities in the Republic of Kazakhstan, banks form a risk management and internal control system that should include: 1) the powers and functional responsibilities for risk management and internal control of the Board of Directors, the management board, and the bank's divisions, and their responsibilities; 2) internal policies and procedures for risk management and internal control; 3) limits on the allowable amount of risks individually by type of banking transactions; 4) internal procedures for reporting on risk management and internal control to the bank's bodies; 5) internal criteria for evaluating the effectiveness of the risk management system.
The same requirement applies to insurance (reinsurance) organizations, which, according to paragraph 1 of Article 52-1 of the Law of the Republic of Kazakhstan "On Insurance Activities", are required to form a risk management and internal control system. Such a system should contain: 1) the powers and functional responsibilities for risk management and internal control of the board of directors, the management board, and divisions of an insurance (reinsurance) organization, and their responsibilities; 2) internal policies and procedures for risk management and internal control; 3) limits on the permissible amount of risks individually by type of activity of the insurance (reinsurance) organization; 4) internal procedures for reporting on risk management and internal control to the bodies of the insurance (reinsurance) organization; 5) internal criteria for evaluating the effectiveness of the risk management system.
Similar requirements are imposed by the special legislation of the Republic of Kazakhstan to other financial organizations.
The procedure for forming a risk management and internal control system is established by a regulatory legal act of the authorized body.
Violation by obligated persons of the specified procedure forms the final composition of the offense provided for in Part 1 of the commented article only if these violations are not eliminated by the obligated persons at the request of the National Bank of the Republic of Kazakhstan within the time limits set by it.
The composition of the offense provided for in Part 1 of the commented article is formal. In order to calculate and impose a fine on an offender in accordance with Part 1 of the commented article, it is not necessary to establish the fact and amount of damage caused to third parties by committing an offense.
For committing an offense provided for in Part 1 of the commented article, a person is punished with a fine.
The amount of the fine for committing an offense under Part 1 of Article 215 of the Administrative Code is 100 MCI, is fixed and is not subject to change by the body imposing it.
This penalty is imposed on the offender by the National Bank of the Republic of Kazakhstan or the court, in case the case is considered in court.
Part 2 of the commented article establishes administrative liability for violation by the parent organization of the banking conglomerate or insurance group of the requirements for the risk management and internal control system on a consolidated basis, established by the regulatory legal act of the National Bank of the Republic of Kazakhstan, if the identified violations are not eliminated by the parent organization of the banking conglomerate or insurance group within the time limits established by the National Bank RK.
The subjects of the offense provided for in Part 2 of the commented article are the parent organizations of a banking conglomerate or an insurance group.
The objective side of the offense provided for in Part 2 of the commented article is characterized by the offender committing illegal actions in the form of violations of the requirements for the risk management and internal control system on a consolidated basis, established by the regulatory legal act of the National Bank of the Republic of Kazakhstan, if the identified violations are not eliminated by the parent organization of the banking conglomerate or insurance group within the time limits established by By the National Bank of the Republic of Kazakhstan.
40-5 of the Law of the Republic of Kazakhstan "On Banks and Banking Activities in the Republic of Kazakhstan, a banking conglomerate must have a risk management and internal control system that meets the requirements established by the regulatory legal act of the authorized body. At the same time, the parent organization of the banking conglomerate ensures compliance with the requirements for the risk management and internal control system on a consolidated basis and is responsible for compliance by the participants of the banking conglomerate with the requirements for the risk management and internal control system.
As required by clause 2 of Article 52-1 of the Law of the Republic of Kazakhstan "On Insurance Activities", the insurance group must also have a risk management and internal control system that meets the requirements established by the regulatory legal act of the authorized body. The parent organization of the insurance group ensures compliance with the requirements for the risk management and internal control system on a consolidated basis and is responsible for ensuring that the participants of the insurance group comply with the requirements for the risk management and internal control system.
The procedure for forming a risk management and internal control system is established by a regulatory legal act of the authorized body.
Violation of the specified procedure by the parent organization of a banking conglomerate or insurance group forms the final composition of the offense provided for in Part 2 of the commented article only if these violations are not eliminated by the parent organization of the banking conglomerate or insurance group at the request of the National Bank of the Republic of Kazakhstan within the time limits set by it.
The composition of the offense provided for in Part 2 of the commented article is formal. In order to calculate and impose a fine on an offender under Part 2 of the commented article, it is not necessary to establish the fact and amount of damage caused to the state by violating the requirements for the risk management and internal control system on a consolidated basis established by a regulatory legal act. The National Bank of the Republic of Kazakhstan.
For committing an offense under Part 2 of Article 215 of the Administrative Code, the offender is punished with a fine.
The fine for committing an offense under Part 2 of Article 215 of the Administrative Code is 100 MCI for legal entities.
The penalty rates are fixed and are not subject to change by the body imposing them.
This penalty is imposed on the offender by the National Bank of the Republic of Kazakhstan or the court, in case the case is considered in court.
Scientific and practical commentary to the Code of the Republic of Kazakhstan on Administrative Offences (article-by-article) from the Author's team:
Bachurin Sergey Nikolaevich, Candidate of Law, Associate Professor – chapter 48 (co-authored with E.M. Khakimov);
Gabdualiev Mereke Trekovich, Candidate of Law – Chapters 11, 21, 22, 23;
Zhusipbekova Ainur Maratovna, M.yu.n. – chapter 13 (co-authored with Karpekin A.V.); chapters 33, 39 (co-authored with Seitzhanov O.T.);
Karpekin Alexander Vladimirovich, Candidate of Law, Associate Professor – chapter 13 (in collaboration with Zhusipbekova A.M.);
Korneychuk Sergey Vasilyevich – chapters 2; chapter 6 (co-authored with O.T. Seitzhanov, E.M. Khakimov); chapter 8; chapter 25 (co-authored with E.M. Khakimov); articles 457-470, 488, 488-1, 491-506; chapters 28, 30, 52;
Ilya Petrovich Koryakin, Doctor of Law, Professor – Chapter 49;
Kisykova Gulnara Bauyrzhanovna, Candidate of Law – chapter 20;
Omarova Botagoz Akimgereevna, Candidate of Law – chapters 17; chapter 18 (co-authored with B.A. Parmankulova); chapters 26, 31; chapter 32 (co-authored with B.A. Parmankulova);
Parmankulova Bayan Askhanbaevna – chapter 18 (co-authored with Omarova B.A.); chapters 19, 32 (co-authored with Omarova B.A.); chapter 43 (co-authored with Tukiev A.S.);
Podoprigora Roman Anatolyevich, Doctor of Law, Professor - Chapter 24, articles 489, 489-1, 490;
Porokhov Evgeny Viktorovich, Doctor of Law – Chapters 14, 15, 16, 29, articles 471-475;
Seitzhanov Olzhas Temirzhanovich, Candidate of Law, Associate Professor, – chapter 4; chapter 5 (co-authored with E. M. Khakimov); chapter 6 (co-authored with S.V. Korneychuk, E.M. Khakimov); chapter 9; chapter 10 (co-authored with B.E. Shaimerdenov, V.V. Filin); chapter 33 (co-authored with Zhusipbekova A.M.); chapter 36 (co-authored with Shaimerdenov B.E.); chapter 39 (co-authored with Zhusipbekova A.M.);
Smyshlyaev Alexander Sergeevich, PhD. – chapters 38, 40, 42, 43-1 (co-authored with A.S. Tukiev); chapter 44;
Aslan Sultanovich Tukiev - Candidate of Law, Associate Professor – chapters 1, 3, 35; chapters 38, 40, 42, (co-authored with A.S. Smyshlyaev); chapter 43 (co-authored with B.A. Parmankulova); chapter 43-1 (co-authored with A.S. Smyshlyaev); chapter 44-1 (co-authored with Shipp D.A.); chapter 45; 46 (co-authored with Shipp D.A.); chapter 47;
Filin Vladimir Vladimirovich, Candidate of Law, Associate Professor – Chapter 10 (in collaboration with O.T. Seitzhanov, B.E. Shaimerdenov);
Yerzhan Maratovich Khakimov, M.yu.n. – chapter 5 (co-authored with O.T. Seitzhanov); chapter 6 (co-authored with O.T. Seitzhanov, S.V. Korneychuk); chapter 7; chapter 25 (co-authored with S.V. Korneychuk); chapters 34, 41; chapter 48 (co-authored with S.N. Bachurin); chapter 53;
Shaimerdenov Bolat Yerkenovich, M.yu.n., – chapter 10 (co-authored with O.T. Seitzhanov, V.V. Filin); chapter 12; articles 476-487, 507-509; chapter 36 (co-authored with O.T. Seitzhanov); chapters 37, 50, 51.
Shipp Denis Alekseevich – chapters 44-1, 46 (in collaboration with A.S. Tukiev).
Date of amendment of the act: 01.01.2020 Date of adoption of the act: 01.01.2020 Place of acceptance: 100050000000 Authority that adopted the act: 103001000000 Region of operation: 100000000000 NPA registration number assigned by the regulatory body: 5 Status of the act: new Sphere of legal relations: 029000000000 / 028000000000 / 029002000000 / 028004000000 / 029001000000 / 026000000000 / 001000000000 / 001008000000 / 030000000000 The form of the act: COMM / CODE Legal force: 1900 Language of the Act: rus
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