Commentary to article 463. Engaging in entrepreneurial or other activities, as well as performing actions (operations) without proper registration, authorization, or notification  The Code of the Republic of Kazakhstan on Administrative Offences  

     1. Engaging in entrepreneurial or other activities, as well as performing actions (operations) without registration, authorization, as well as failure to notify in cases where registration, authorization, and notification are mandatory, if these actions do not contain signs of a criminal offense., -

     they impose a fine on individuals in the amount of fifteen, on officials, small businesses or non-profit organizations - in the amount of twenty-five, on medium-sized businesses - in the amount of forty, on large businesses - in the amount of one hundred and fifty monthly calculation indices, with or without confiscation of objects and (or) instruments of committing administrative offenses, and engaging in entrepreneurial or other activities without a license additionally entails confiscation of income (dividends), money, and securities received as a result of an administrative offense.

     2. The actions provided for in the first part of this Article, committed repeatedly within a year after the imposition of an administrative penalty, -

     they impose a fine on individuals in the amount of thirty, on officials, small business entities or non-profit organizations - in the amount of fifty, on medium-sized businesses - in the amount of eighty, on large businesses - in the amount of five hundred monthly calculation indices, with confiscation of objects and (or) instruments of committing an administrative offense, and engaging in entrepreneurial or other activities without a license additionally entails confiscation of income (dividends), money, and securities received as a result of an administrative offense.

     Note. Liability under this article does not apply to notification of a currency transaction and registration of currency transactions carried out in accordance with the Law of the Republic of Kazakhstan "On Currency Regulation and Currency Control", as well as to notifications carried out in accordance with the Law of the Republic of Kazakhstan "On Natural Monopolies".

     The object of the offense is the established management procedure in the field of licensed or permissive business and other activities in the Republic of Kazakhstan.

     The offense is caused by a violation of the provisions of the Entrepreneurial Code of the Republic of Kazakhstan and other laws containing the specifics of legal regulation when obtaining a license (permit, notification) from an authorized body to engage in entrepreneurial and other activities. Article 27 of the Entrepreneurial Code of the Republic of Kazakhstan states that business entities are required to obtain permits or send notifications to initiate activities or actions (operations).

     The procedure for obtaining licenses (permits, notifications) for carrying out activities is provided for by the Law of the Republic of Kazakhstan dated May 16, 2014 "On Permits and Notifications". This Law regulates public relations related to the introduction and implementation of a permissive or notification procedure for the implementation of certain types of activities or actions by private business entities and other persons provided for by this Law.

     The objective side of part 1 of the offense under consideration is expressed in illegal actions (omissions) and is characterized by the following qualifying features:

     1)engaging in entrepreneurial or other activities without registration and permission

     2) implementation of actions (operations) without registration or permission;

     3) non-notification in cases where registration, authorization, and notification are required.

     When qualifying, it is important to take into account that the above offenses do not contain signs of a criminally punishable act provided for in Article 214 of the Criminal Code "Illegal entrepreneurship, illegal banking or collection activities." A criminally punishable act is characterized by a greater social danger, since the composition of the criminal offense is material and provides for the occurrence of harmful consequences. If these acts have caused major damage to a citizen, organization, or State, or involve the extraction of large-scale income or the production, storage, transportation, or sale of excisable goods on a significant scale, then they should be qualified under Article 214 of the Criminal Code.

     The concepts of permits and notifications are given by the Law of the Republic of Kazakhstan dated May 16, 2014 "On Permits and Notifications":

     1) a permit is a confirmation of the right of an individual or legal entity to carry out activities or actions (operations) carried out by licensing authorities through licensing or a permitting procedure (clause 15);

     2) electronic permit form - a permit in the form of an electronic document, issued and received using the state information system of permits and notifications, equivalent to a permit on paper (paragraph 26);

     3) notification - a document drawn up by the applicant in accordance with the form approved by the authorized body in the field of permits and notifications or the National Bank of the Republic of Kazakhstan, informing about the beginning or termination of an activity or action (paragraph 28).

     A permit must be obtained and a notification sent by an individual or legal entity to initiate an activity or action (operation). Obtaining a permit (except for an accompanying permit) and sending a notification in accordance with the requirements of regulatory legal acts of the Republic of Kazakhstan are mandatory for the circle of persons established by the legislation of the Republic of Kazakhstan, and carrying out activities or actions (operations) failure to obtain them entails administrative liability.

     The Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated June 18, 2004 No. 4 clarified the mechanism for the application by courts of additional administrative penalties for illegal entrepreneurship. For carrying out activities by a person without a license, the court, in accordance with Articles 41, 45 of the Administrative Code, may, in the form of an additional administrative penalty, confiscate not only items belonging to this person by right of ownership and which were the instrument of committing an administrative offense, but also the income received by the person as a result of committing such an offense. The specified items and income may be confiscated if it is provided for by the sanction of the relevant article. The special part of the Administrative Code.

     Objects that are an instrument for committing an administrative offense related to the conduct of entrepreneurial or other activities without a license should be understood as machines, devices, machine tools, mechanisms and other devices, as well as raw materials (semi-finished products) directly used by a person when committing an administrative offense. Income received from carrying out entrepreneurial or other activities without a license should be understood as income received from the sale of goods (works, services) for the entire period of such activity. The income should include the cost of goods sold (works, services), but not paid by the date of the report on the administrative offense.

     If taxes have been paid on income received from entrepreneurial or other activities without a license, the amount of income subject to confiscation is reduced by the amount of taxes paid.

     Part 2 of the commented article provides for bringing to administrative responsibility for actions provided for in part one of this article, committed repeatedly within a year after the imposition of an administrative penalty.  

     The subjects of the analyzed offense may be:

     1) individuals;

     2) officials;

     3) non-profit organizations;

     4) legal entities in the form of small, medium and large enterprises.

     The regulatory rulings of the Supreme Court of the Republic of Kazakhstan on the application of the General and special parts of the Administrative Code explain the procedure for determining the subject of an offense when imposing an administrative penalty under the commented article. When committing such offenses, individuals who carry out their activities only on their own behalf, and not in connection with the performance of work duties, such persons are liable independently. The application of additional penalties to these individuals is mandatory in accordance with paragraph 8 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan dated December 22, 2016 No. 12 "On certain issues of application by courts of the norms of the General Part of the Code of Administrative Offences of the Republic of Kazakhstan".  

     In cases where a license is required to carry out such activities, these individuals are additionally liable under the first part of Article 463 of the Administrative Code.

     The subjective side of the offenses provided for in all parts of the article in question can be committed either in the form of direct intent or through negligence.

     The note to the commented article provides for areas of public relations that are not covered by Article 463 of the Administrative Code. However, the content of the note will change from July 1, 2019 on the basis of the Law of the Republic of Kazakhstan dated July 2, 2018 No. 168 "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Currency regulation and currency control, risk-based supervision of financial organizations, consumer protection of financial services and improving the activities of the National Bank of the Republic Kazakhstan".

Current note

It will be valid from 07/01/19

Liability under this article does not apply to notification of a foreign exchange transaction and registration of foreign exchange transactions carried out in accordance with the Law of the Republic of Kazakhstan "On Currency Regulation and Currency Control", as well as to notifications carried out in accordance with the Law of the Republic of Kazakhstan "On Natural Monopolies".

Liability under this article does not apply to notification of currency transactions and registration of currency contracts carried out in accordance with the Law of the Republic of Kazakhstan "On Currency Regulation and Currency Control", as well as to notifications carried out in accordance with the Law of the Republic of Kazakhstan "On Natural Monopolies".

     Judges of specialized district and equivalent administrative courts have the right to consider cases of administrative offenses provided for in all parts of Article 463 of the Administrative Code.

     The protocol on an administrative offense in all parts of Article 463 is drawn up by authorized officials specified in part 1 of Article 804 of the Administrative Code.

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.);  

     Alexander Vladimirovich Karpekin, Candidate of Law, Associate Professor – chapter 13 (in collaboration with A.M. Zhusipbekova);

     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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