Commentary to article 32. Amendments to the license for subsurface use to the Code of the Republic of Kazakhstan “On Subsurface and Subsurface Use”  

1. Changes to the license for subsurface use are made by the state body that issued the license by way of its renewal.

The renewed license is subject to publication on

the Internet resource of the state body that issued the license on the day of renewal.

2. The license is subject to renewal in the following cases::

1) changes in information about the subsurface user:

for individuals – changes in the surname, first name, patronymic (if it is indicated in the identity document) and (or) citizenship;

for legal entities – name or location changes;

2) transfer of the right of subsurface use and (or) a share in the right of subsurface use;

3) prolongation of the license period;

4) changes in the boundaries of the subsurface area.

3. The license is reissued upon the application of the subsurface user, submitted in a form approved by the competent authority.

The application must be accompanied by originals or notarized copies of documents confirming the information indicated in it.

The application and the documents attached to it must be written in Kazakh and Russian. If the application is submitted by a foreigner or a foreign legal entity, the documents attached to it may be drawn up in another language with a mandatory translation into Kazakh and Russian attached to each document, the accuracy of which is certified by a notary.

4. The state body that issued the license refuses to renew the license if the application does not comply with the requirements of this Code.

5. The state body that issued the license shall reissue it or notify it of the refusal of such reissue within seven working days from the date of receipt of the application.

6. A refusal to renew a license may be appealed by a subsurface user in accordance with the legislation of the Republic of Kazakhstan within ten working days from the date of receipt of the notification of refusal.

7. Renewal of a license in the cases provided for in subitems 2), 3), 4) of paragraph 2 of this Article shall be carried out in accordance with this Code.

8. Grammatical or arithmetic errors, typos or other similar errors made during the issuance or reissue of a license are subject to correction by the state body that issued the license.

Correcting errors made during the issuance or renewal of a license is not a renewal of the license.

Correction of errors may be carried out on the initiative of the state body that issued the license, or at the request of the subsurface user.

The state body corrects errors at the request of the subsurface user within five working days from the date of receipt of such an application.

The state body that issued the license, after correcting the error in the license, issues it to the subsurface user within two working days.

The corrected license is subject to publication on the Internet resource of the state body that issued the license on the day of correction.

Disputes arising in connection with the correction of errors in the license are subject to resolution in accordance with the legislation of the Republic of Kazakhstan.

__________________________________________________________________________________________

(Odilov T.A.)

1. The article being commented on is new, and the previous legislation on subsoil and subsurface use did not provide for provisions with similar content.

Following the conceptual principle of the Subsurface Code, this article highlights the general rules that apply to all types of subsurface use licenses when they are amended. The specifics of the procedures for making changes to the subsurface use license are defined in separate articles of the General Part and, in relation to a specific type of license, in the Special Part. This article also gives new meaning to the well-established concept of "re-registration".

The Law on Subsoil of 1996, during the period of the license and contract regime of subsurface use, distinguished the meaning of the words "renewal of the license" and "modification of the license". Reissue referred to the action of the licensing authority (licensor) to issue a "newly issued" license upon the transfer of the right of subsurface use to another person, that is, a change in the subject of the right of subsurface use, without changing the other terms of use of the subsoil. In other cases, when the terms of use of a subsurface area underwent changes, "license changes" were made: the term of use of the subsurface area, the term of the subsoil use contract, etc.

2. The commented article does not distinguish between the meaning of the words "renewal of the license" and "modification of the license". On the contrary, any modification to the license is carried out by way of its new registration (reissue), that is, issuing a new document instead of the previous one. The issuance of a new document to replace the previous one does not imply a new license issue date.

The renewal of the license has a law-forming and law-changing significance.

3. The license may be renewed only in four cases:

1) when the name of the subsurface user, a legal entity, or the surname, first name and patronymic changes, while the subject of the subsurface use right remains unchanged.;

2) when there is a change in the subject of the right of subsurface use (shares in the right of subsurface use) as a result of their transfer;

3) when the license period is extended;

4) when the territorial boundaries of a subsurface area change (but not the lower or upper boundaries, since only the territorial boundaries are defined in the license – the lower and upper boundaries are established in accordance with the norm of the Subsurface Code in force at the time of license issuance). According to the Special Part of the Subsoil Code, territorial boundaries may change as a result of the early abandonment by a subsurface user of a part of a subsurface area (reduction of the territory of a subsurface area) or as a result of the transformation of a subsurface area under licenses for exploration or extraction of solid minerals.

As the last example shows, license renewal cases do not apply to all types of licenses. Also, for example, in the event of the transfer of the right of subsurface use and (or) a share in the right of subsurface use, provided for in paragraph 2 of paragraph 2 of the commented article, it is impossible and does not apply to mining licenses or licenses for the geological study of subsurface due to their specifics.

The renewal of the license in the second case has a legal significance for the new acquirer of the right of subsurface use. In the third and fourth cases, the reissue obviously represents a legally changing fact.

Exhaustive cases of license renewal are provided by the legislator in such a way that, firstly, the possibility of revising the terms of the issued license is strictly limited in a procedural sense; secondly, only those cases of license renewal are established, the occurrence of which does not depend solely on the state body and involves the initiative of the subsurface user himself (the only exception is the transfer of the right subsurface use (shares in the right) in the order of inheritance by law). The legal structure constructed in this way helps to preserve the immutability of the terms of the issued license.

4. The renewal of a license is an administrative action of a state body with appropriate authority. In turn, the refusal to reissue is burdensome for the subsurface user or the interested party.

an administrative act that can be appealed or challenged in the manner prescribed by the APPC.

Paragraph 6 of the commented article establishes 10 working days for appealing (challenging) the refusal to renew the license from the date of receipt of the notification of the state body of such refusal. However, in case of challenging the refusal to reissue in court, this period with the adoption of the APPC is considered to be changed by 3 months (art. 92 of the APPC) in accordance with Part 2, paragraph 2, art. 2 of the APPC.

5. As a general rule, a license is reissued by the same government agency that issued the license. However, this does not mean that if, at the time of issuing the license, the functions of the competent authority for issuing the license were assigned to one state body, but by the time of the planned renewal, these functions have already been assigned to another state body, the first one will renew the license. The government agency that "issued" the license should be understood as the government agency that exercises the authority to issue the appropriate license at the time of the proposed renewal of the license.

6. It is necessary to distinguish the introduction of changes to the license as an imperious measure entailing the occurrence of a legally–forming or legally-changing legal fact (renewal of the license) from a change that does not entail such a consequence - correcting an arithmetic error, typo or other similar error made when issuing or renewing the license. Examples of such errors can be errors in numerical expressions, block codes or coordinates, errors in the name, surname, patronymic, etc.

Errors and typos occur due to incorrect transfer of information from applications and documents to an issued or reissued license. Therefore, the correction of errors and typos is always carried out by checking the documents and statements on the basis of which the license was issued or reissued. Correction of errors and typos does not imply the occurrence of legal consequences, since such correction does not have a law-forming or law-changing meaning.

Correcting errors or typos is an act of a government agency that does not involve the adoption of an administrative act. Disputes over the correction of errors are subject to review in accordance with the APPC.

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  Kazakh Association of Organizations of the Oil and Gas and Energy Complex KAZENERGY

Nur Sultan 2022

The Kazenergy Association expresses its sincere gratitude for the support in preparing the commentary to the following companies: North Caspian Operating Company NV, NC KazMunayGas JSC, Mangistaumunaygas JSC, Karachaganak Petroleum Operating BV, White & Case Kazakhstan LLP, Haller Lomax LLP)", "Erlicon CG" LLP, "Signum Law Firm" LLP. © Kazenergy Association, 2022 © team of authors, 2022 © authors, 2022

Dear readers!

We offer you a scientific and practical commentary prepared by a group of Russian specialists with extensive practical experience in legislation on subsoil and subsoil use and who participated in the preparation of the Code on Subsoil and Subsoil Use.

Subsurface use is a very complex and specific area of public relations, the regulation of which has its own historical background and takes into account the technological specifics of the process of subsurface development, as well as environmental, commercial, legal and other features of exploration and development of deposits.

Kazakhstan's legislation on subsoil and subsurface use has passed through several stages in its development, and has always been based on a balance of interests between the state and subsurface users, transparency, striving for the maximum possible degree of protection of the rights and legitimate interests of investors, ensuring sustainable social, economic and environmental development of the country.

The Code "On Subsoil and Subsoil Use", adopted at the end of 2017, was developed taking into account many years of accumulated experience and law enforcement practice, as well as the results of extensive discussions with experts working in the industry.

It reflects specific, important measures on the part of the state to increase the investment attractiveness of exploration and further reduce administrative barriers.

Nevertheless, practice and legislation do not stand still, constantly evolving, taking into account new challenges facing both the subsurface use industry and the economy as a whole.

In this regard, this commentary is intended to serve as an aid for a wide range of interested persons – specialists working in the industry, in

understanding the meaning of the norms, their historical context, the interrelationship and mutual influence of the various provisions of the Code.

We also hope that studying the commentary will serve as an incentive for new generations of young domestic specialists to work scientifically and practically in this important industry, for the benefit of the development of our country, current and future generations of Kazakhstanis.

Sincerely, U. Karabalin, Deputy Chairman of the Kazenergy Association, Hero of Labor of Kazakhstan