Commentary on Article 207-1. Violation of the Procedure for Procuring Goods, Works, and Services by National Managing Holdings, National Holdings, National Companies, and Organizations in Which Fifty Percent or More of the Voting Shares (Participatory Interests in the Authorized Capital) Are Directly or Indirectly Owned by a National Managing Holding, National Holding, or National Company of the Code of the Republic of Kazakhstan on Administrative Offenses

1. Establishing, in tender documentation (auction documentation), qualification requirements for potential suppliers that are not provided for by the procurement procedure, or indicating, in tender documentation (auction documentation) or in information published when procurement is carried out through a request for quotations method, characteristics that determine the affiliation of the goods, works, or services being procured with particular potential suppliers, except in cases provided for by the procurement procedure, –

shall entail the imposition of a fine on officials in the amount of fifty monthly calculation indices.

2. Refusal to carry out procurement in cases not provided for by the procurement procedure –

shall entail the imposition of a fine on officials in the amount of fifty monthly calculation indices.

3. Declaring a potential supplier and (or) subcontractors (co-performers) of works or services engaged by that supplier to be non-compliant with qualification requirements and (or) the requirements of the tender documentation (auction documentation) on grounds not provided for by the procurement procedure, –

shall entail the imposition of a fine on officials in the amount of fifty monthly calculation indices.

4. Failure to divide procurement of goods, works, and services into lots according to their homogeneous types and the place of delivery (performance, provision), except in cases provided for by the procurement procedure, –

shall entail the imposition of a fine on officials in the amount of ten monthly calculation indices.

5. Preparation by a procurement expert commission or a procurement expert of a knowingly false expert opinion on the basis of which an unlawful decision is adopted by the tender commission (auction commission), –

shall entail the imposition of a fine in the amount of fifty monthly calculation indices.

6. Carrying out procurement from a single source by directly concluding a procurement contract in cases not provided for by the procurement procedure, –

shall entail the imposition of a fine on officials in the amount of fifty monthly calculation indices.

Notes.

1. For the purposes of this Article, the procurement procedure shall mean the procurement rules provided for by the Law of the Republic of Kazakhstan “On State Property” or the procurement procedure provided for by the Law of the Republic of Kazakhstan “On the National Welfare Fund.”

2. For the purposes of this Article, officials shall mean:

1) in respect of Part One — the first heads of the procurement organizer or the customer, or persons performing their duties, and (or) persons directly involved in the preparation of tender documentation (auction documentation);

2) in respect of Parts Two, Four, and Six — the first heads of the procurement organizer or the customer, or persons performing their duties, who are responsible for carrying out the procedures for organizing and conducting procurement;

3) in respect of Part Three — the chairperson of the tender commission (auction commission) and their deputy, as well as members of the tender commission (auction commission) established by the procurement organizer for the procurement of goods, works, and services by national managing holdings, national holdings, national companies, and organizations in which fifty percent or more of the voting shares (participatory interests in the authorized capital) are directly or indirectly owned by a national managing holding, national holding, or national company.

3. An official shall not be subject to administrative liability provided for by this Article if the official independently eliminates the violations identified following an inspection conducted by the National Welfare Fund or the centralized procurement control service, within ten working days from the day following the day on which the controlled entity was served with a notice requiring the elimination of violations identified following an inspection conducted by the National Welfare Fund or the centralized procurement control service.

The Article under commentary establishes administrative liability for violations of the procedure for procuring goods, works, and services by national managing holdings, national holdings, national companies, and organizations in which fifty percent or more of the voting shares (participatory interests in the authorized capital) are directly or indirectly owned by a national managing holding, national holding, or national company.

The generic object of the offenses provided for by Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is the procedure for conducting commercial and procurement activities in the Republic of Kazakhstan, as established by the legislation of the Republic of Kazakhstan and protected by the state.

The direct object of the administrative offenses provided for by the Article under commentary is the procedure for conducting procurement, as established by the legislation of the Republic of Kazakhstan and protected by the state.

At the same time, pursuant to Appendix 1 to the Article under commentary, the procurement procedure referred to in this Article shall mean the procurement rules provided for by the Law of the Republic of Kazakhstan “On State Property” or the procurement procedure provided for by the Law of the Republic of Kazakhstan “On the National Welfare Fund.”

Pursuant to Paragraph 4 of Article 166 of the Law of the Republic of Kazakhstan “On State Property,” procurement of goods, works, and services, including the placement of a guaranteed order, by a national managing holding, with the exception of the National Welfare Fund, national holdings, national companies, and organizations in which fifty percent or more of the voting shares (participatory interests in the authorized capital) are directly or indirectly owned by a national managing holding, with the exception of the National Welfare Fund, a national holding, or a national company, as well as by social-entrepreneurial corporations, shall be carried out on the basis of standard rules for the procurement of goods, works, and services approved by the Government of the Republic of Kazakhstan (hereinafter referred to as the “Procurement Rules”).

Pursuant to Paragraphs 1 and 2 of Article 19 of the Law of the Republic of Kazakhstan “On the National Welfare Fund,” the special procurement procedure for goods, works, and services provided for by other legislative acts of the Republic of Kazakhstan shall not apply to procurement carried out by the Fund and organizations in which fifty percent or more of the voting shares (participatory interests) are directly or indirectly owned by the Fund. Procurement of goods, works, and services by the Fund and organizations in which fifty percent or more of the voting shares (participatory interests) are directly or indirectly owned by the Fund shall be carried out on the basis of rules approved by the Fund’s Board of Directors (hereinafter referred to as the “Procurement Rules”).

Customers are national managing holdings, national holdings, national companies, and organizations in which fifty percent or more of the voting shares (participatory interests in the authorized capital) are directly or indirectly owned by a national managing holding, national holding, or national company, as well as social-entrepreneurial corporations.

A procurement organizer is a customer represented by its structural subdivision responsible for carrying out the procedures for organizing and conducting procurement, or a legal entity designated by the customer for the purpose of carrying out the procedures for organizing and conducting procurement.

With regard to the National Welfare Fund and the organizations included in it, the term “Customer” means the Fund itself or an organization included in the Holding, while the term “Procurement Organizer” means a legal entity or a structural subdivision acting on behalf of the legal entity that established it and designated by the Customer (Customers) for the purpose of carrying out the procedures for organizing and conducting procurement.

By virtue of the direct indication thereof in the sanctions and Note 2 to the Article under commentary, the subjects of the offenses provided for by Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses are officials of customers, procurement organizers, and tender commissions established by them.

The subjective element of the acts provided for by Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is characterized by guilt in the form of intent or negligence on the part of the officials who committed such acts.

The elements of the offenses provided for by the Article under commentary are formal. For the purpose of calculating and imposing fines on offenders under the Article under commentary, it is not necessary to establish the fact or amount of damage caused to third parties as a result of the commission of the offenses.

Administrative penalties for the commission of offenses provided for by the Article under commentary shall be imposed by the Ministry of Finance of the Republic of Kazakhstan or by a court where the case is considered by a court.

Part 1 of the Article under commentary establishes administrative liability for establishing, in tender documentation (auction documentation), qualification requirements for potential suppliers that are not provided for by the procurement procedure, or indicating, in tender documentation (auction documentation) or in information published when procurement is carried out through a request for quotations method, characteristics that determine the affiliation of the goods, works, or services being procured with particular potential suppliers, except in cases provided for by the procurement procedure.

By virtue of the direct indication thereof in Note 2 to the Article under commentary, the subjects of the offenses provided for by Part 1 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses are officials, namely the first heads of the procurement organizer or the customer, or persons performing their duties, and (or) persons directly involved in the preparation of tender documentation (auction documentation).

The objective element of the offense provided for by Part 1 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses consists of the commission by an official of unlawful actions in the form of:

1) establishing, in tender documentation (auction documentation), qualification requirements for potential suppliers that are not provided for by the procurement procedure; or

2) indicating, in tender documentation (auction documentation) or in information published when procurement is carried out through a request for quotations method, characteristics that determine the affiliation of the goods, works, or services being procured with particular potential suppliers.

A violation by an official responsible for determining the terms of competitive tender (auction) documentation of the prohibitions established in the Procurement Rules concerning the procedure for determining the terms of competitive tender (auction) documentation constitutes a completed administrative offense under Part 1 of the Article under commentary.

A person who commits the offense provided for by Part 1 of the Article under commentary shall be subject to a penalty in the form of a fine.

The amount of the fine imposed on an official for committing the offense provided for by Part 1 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is fifty monthly calculation indices. It is fixed and may not be changed by the authority imposing it.

Part 2 of the Article under commentary establishes administrative liability for refusing to carry out procurement in cases not provided for by the procurement procedure.

By virtue of the direct indication thereof in Note 2 to the Article under commentary, the subjects of the offenses provided for by Part 2 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses are officials, namely the first heads of the procurement organizer or the customer, or persons performing their duties, who are responsible for carrying out the procedures for organizing and conducting procurement.

The objective element of the offense provided for by Part 2 of the Article under commentary is characterized by unlawful actions (inaction) of the offender expressed in refusing to carry out procurement in cases not provided for by the procurement procedure.

In accordance with the procurement procedure, officials of customers and procurement organizers are required to purchase goods, works, and services through procurement methods, except in the cases established by the aforementioned procedure.

Violation of this requirement constitutes a completed offense under Part 2 of the Article under commentary.

An offender who commits the offense provided for by Part 2 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses shall be subject to a penalty in the form of a fine.

The amount of the fine imposed on an official of a customer for committing the offense provided for by Part 2 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is fifty monthly calculation indices. It is fixed and may not be changed by the authority imposing it.

Part 3 of the Article under commentary establishes administrative liability for declaring a potential supplier and (or) subcontractors (co-performers) of works or services engaged by that supplier to be non-compliant with qualification requirements and (or) the requirements of the tender documentation (auction documentation) on grounds not provided for by the procurement procedure.

By virtue of the direct indication thereof in Note 2 to the Article under commentary, the subjects of the offenses provided for by Part 3 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses are officials, namely the chairperson of the tender commission (auction commission) and their deputy, as well as members of the tender commission (auction commission) established by the procurement organizer for the procurement of goods, works, and services by national managing holdings, national holdings, national companies, and organizations in which fifty percent or more of the voting shares (participatory interests in the authorized capital) are directly or indirectly owned by a national managing holding, national holding, or national company.

The objective element of the offense provided for by Part 3 of the Article under commentary is characterized by unlawful actions of the offender expressed in declaring a potential supplier and (or) subcontractors (co-performers) of works or services engaged by that supplier to be non-compliant with qualification requirements and (or) the requirements of the tender documentation (auction documentation) on grounds not provided for by the procurement procedure.

Under the requirements of the procurement procedure, a potential supplier and (or) a subcontractor (co-performer) of works or services engaged by that supplier may not be declared non-compliant with qualification requirements on grounds not provided for by the procurement procedure.

Accordingly, declaring a potential supplier and (or) a subcontractor (co-performer) of works or services engaged by that supplier to be non-compliant with qualification requirements on any other grounds used by the customer or procurement organizer constitutes a completed offense under Part 3 of the Article under commentary.

An offender who commits the offense provided for by Part 3 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses shall be subject to a penalty in the form of a fine.

The amount of the fine imposed on officials for committing the offense provided for by Part 3 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is fifty monthly calculation indices. It is fixed and may not be changed by the authority imposing it.

Part 4 of the Article under commentary establishes administrative liability for failure to divide procurement of goods, works, and services into lots according to their homogeneous types and the place of delivery (performance, provision), except in cases provided for by the procurement procedure.

By virtue of the direct indication thereof in Note 2 to the Article under commentary, the subjects of the offenses provided for by Part 4 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses are officials, namely the first heads of the procurement organizer or the customer, or persons performing their duties, who are responsible for carrying out the procedures for organizing and conducting procurement.

The objective element of the offense provided for by Part 4 of the Article under commentary is characterized by unlawful actions of the offender expressed in failure to divide procurement of goods, works, and services into lots according to their homogeneous types and the place of delivery (performance, provision), except in cases provided for by the procurement procedure.

Under the general requirements of the procurement procedure, when preparing the procurement plan, the customer is required to divide goods, works, and services into lots according to their homogeneous types and the place of delivery (performance, provision).

Exceptions to this general rule are the cases expressly provided for in the Procurement Rules.

A violation by the person under an obligation to comply with the aforementioned requirement to divide goods, works, and services into lots according to their homogeneous types and the place of delivery (performance, provision) constitutes a completed offense under Part 4 of the Article under commentary.

An offender who commits the offense provided for by Part 4 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses shall be subject to a penalty in the form of a fine.

The amount of the fine imposed on officials for committing the offense provided for by Part 4 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is ten monthly calculation indices. It is fixed and may not be changed by the authority imposing it.

Part 5 of the Article under commentary establishes administrative liability for the preparation by a procurement expert commission or a procurement expert of a knowingly false expert opinion on the basis of which an unlawful decision is adopted by the tender commission (auction commission).

By virtue of the direct indication thereof in the provision under commentary, the subjects of the offense under Part 5 of Article 207 of the Code of the Republic of Kazakhstan on Administrative Offenses are an expert or members of an expert commission who prepare an expert opinion for the tender commission (auction commission).

The objective element of the offense provided for by Part 5 of the Article under commentary is characterized by unlawful actions of the offender expressed in the preparation by a procurement expert commission or a procurement expert of a knowingly false expert opinion on the basis of which an unlawful decision is adopted by the tender commission (auction commission).

An appointed expert or expert commission is required to prepare and submit to the customer or procurement organizer a reliable expert opinion on the subject of the examination requested from them.

Failure by experts or members of an expert commission to perform their obligation to prepare and submit a reliable expert opinion, and the submission in its place of a knowingly false expert opinion on the basis of which an unlawful decision is adopted by the tender commission (auction commission), constitutes a completed offense under Part 5 of the Article under commentary.

An offender who commits the offense provided for by Part 5 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses shall be subject to a penalty in the form of a fine.

The amount of the fine imposed for committing the offense provided for by Part 5 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is fifty monthly calculation indices. It is fixed and may not be changed by the authority imposing it.

Part 6 of the Article under commentary establishes administrative liability for carrying out procurement from a single source by directly concluding a procurement contract in cases not provided for by the procurement procedure.

By virtue of the direct indication thereof in Note 2 to the Article under commentary, the subjects of the offenses provided for by Part 1 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses are officials, namely the first heads of the procurement organizer or the customer, or persons performing their duties, who are responsible for carrying out the procedures for organizing and conducting procurement.

The objective element of the offense provided for by Part 6 of the Article under commentary is characterized by unlawful actions of the offender in the form of carrying out procurement from a single source by directly concluding a procurement contract in cases not provided for by the procurement procedure.

Procurement from a single source by directly concluding a procurement contract shall be carried out in the cases expressly provided for in the Procurement Rules. In other cases, the customer is required to carry out procurement using other methods specified in the Procurement Rules.

A violation by the person under an obligation to comply with the aforementioned requirements and prohibitions constitutes a completed offense under Part 6 of the Article under commentary.

An offender who commits the offense provided for by Part 6 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses shall be subject to a penalty in the form of a fine.

The amount of the fine imposed on officials for committing the offense provided for by Part 6 of Article 207-1 of the Code of the Republic of Kazakhstan on Administrative Offenses is fifty monthly calculation indices. It is fixed and may not be changed by the authority imposing it.

Scientific and Practical Commentary on the Code of the Republic of Kazakhstan on Administrative Offenses (Article-by-Article), by the Team of Authors:

Bachurin Sergey Nikolaevich, Candidate of Legal Sciences, Associate Professor – Chapter 48 (co-authored with E.M. Khakimov);

Gabdualiev Mereke Tреkovich, Candidate of Legal Sciences – Chapters 11, 21, 22, 23;

Zhusipbekova Ainur Maratovna, Master of Laws – Chapter 13 (co-authored with A.V. Karpekin); Chapters 33, 39 (co-authored with O.T. Seitjanov);

Karpekin Alexander Vladimirovich, Candidate of Legal Sciences, Associate Professor – Chapter 13 (co-authored with A.M. Zhusipbekova);

Korneychuk Sergey Vasilievich – Chapter 2; Chapter 6 (co-authored with O.T. Seitjanov and 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;

Koryakin Ilya Petrovich, Doctor of Legal Sciences, Professor – Chapter 49;

Kysykova Gulnara Bauyrzhanovna, Candidate of Legal Sciences – Chapter 20;

Omarova Botagoz Akimgereevna – Chapter 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 B.A. Omarova); Chapter 19; Chapter 32 (co-authored with B.A. Omarova); Chapter 43 (co-authored with A.S. Tukiev);

Podoprigora Roman Anatolievich, Doctor of Legal Sciences, Professor – Chapter 24, Articles 489, 489-1, 490;

Porokhov Evgeny Viktorovich, Doctor of Legal Sciences – Chapters 14, 15, 16, 29, Articles 471–475;

Seitjanov Olzhas Temirzhanovich, Candidate of Legal Sciences, Associate Professor – Chapter 4; Chapter 5 (co-authored with E.M. Khakimov); Chapter 6 (co-authored with S.V. Korneychuk and E.M. Khakimov); Chapter 9; Chapter 10 (co-authored with B.E. Shaimerdenov and V.V. Filin); Chapter 33 (co-authored with A.M. Zhusipbekova); Chapter 36 (co-authored with B.E. Shaimerdenov); Chapter 39 (co-authored with A.M. Zhusipbekova);

Smyshlyaev Alexander Sergeevich, PhD – Chapters 38, 40, 42, 43-1 (co-authored with A.S. Tukiev); Chapter 44;

Tukiev Aslan Sultanovich, Candidate of Legal Sciences, 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 D.A. Shipp); Chapter 45; Chapter 46 (co-authored with D.A. Shipp); Chapter 47;

Filin Vladimir Vladimirovich, Candidate of Legal Sciences, Associate Professor – Chapter 10 (co-authored with O.T. Seitjanov and B.E. Shaimerdenov);

Khakimov Erzhan Maratovich, Master of Laws – Chapter 5 (co-authored with O.T. Seitjanov); Chapter 6 (co-authored with O.T. Seitjanov and 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 Erkenovich, Master of Laws – Chapter 10 (co-authored with O.T. Seitjanov and V.V. Filin); Chapter 12; Articles 476–487, 507–509; Chapter 36 (co-authored with O.T. Seitjanov); Chapters 37, 50, 51;

Shipp Denis Alekseevich – Chapters 44-1, 46 (co-authored with A.S. Tukiev).

Date of amendment of the legal act: 01.01.2020.

Date of adoption of the legal act: 01.01.2020.

Place of adoption: 100050000000.

Body that adopted the legal act: 103001000000.

Registration number assigned to the regulatory legal act by the rule-making body: 5.

Status of the legal act: new.

Scope of legal relations: 029000000000 / 028000000000 / 029002000000 / 028004000000 / 029001000000 / 026000000000 / 001000000000 / 001008000000 / 030000000000.

Form of the act: commentary / code.

Legal force: 1900.

Language of the legal act: Russian.

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