On the ratification of the Loan Agreement (Draft Law Reform) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

Home / RLA / On the ratification of the Loan Agreement (Draft Law Reform) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development

Law of the Republic of Kazakhstan dated July 20, 1999 No. 448-I

To ratify the Loan Agreement (Draft Law Reform) between the Republic of Kazakhstan and the International Bank for Reconstruction and Development, signed in Astana on May 20, 1999.

President of the Republic of Kazakhstan

Loan number 4467 KZ

Loan agreement

(Draft Law Reform)

between

By the Republic of Kazakhstan

and

By an international Bank

Reconstruction and Development

Agreement dated May 20, 1999 between the Republic of Kazakhstan (the Borrower) and the International Bank for Reconstruction and Development (the Bank), In accordance with which: (A) The Borrower, having become convinced of the expediency and priority of the Project described in Appendix 2 to this Agreement, requested the Bank to assist in financing this The project; According to which the Bank agreed, based on the above and other information, to provide the Borrower with a Loan on the terms set out in this Agreement.; In this regard, the parties to this Agreement hereby agree on the following:

Article I General Terms and Conditions; Definitions Section 1.01. "General Terms and Conditions applicable to Agreements on loans and guarantees provided in the same currency" of the Bank dated May 30, 1995 (as amended on December 2, 1997) (General Terms and Conditions) form an integral part of this Agreement. Section 1.02. Unless the context requires otherwise, a number of terms defined in the General Terms and Conditions and in the Preamble to this Agreement have meanings that correspond to those set out in these documents, and the following additional terms have the following meanings: (a) "IOS" means the Judicial Training Institute, which is called the "Center for Training and Advanced Training of Judges and Justice Workers of the Republic Kazakhstan", established under the Ministry of Justice in accordance with the Resolution of the Government of the Borrower's country No. 1246 dated August 11, 1997, or its successor; (b) "Judicial System Strengthening Supervisory Board" means The Council for the Preparation and Implementation of the Judicial System Strengthening component, established by the Order of the Ministry of Justice No. 562 dated August 10, 1998 and the Order Of the Supreme Court No. 233 of August 13, 1998, or its successors; (c) "MO" means the Ministry of Education, Culture and Health of the Borrower's country or its successor; (d) "MF" means the Ministry of Finance of the Borrower's country or its successor; (e) "MO" means the Ministry of Justice of the Borrower's country or its successor. the legal successor; (f) "National Comprehensive Plan" means an action plan to be developed and adopted by the Borrower for the implementation at the national level of judicial administration and judicial record-keeping methods, as well as measures to improve the quality and enforcement of judgments in accordance with paragraph 3 of Annex 5 to this Agreement, which may be supplemented from time to time; (g) "RCPI" means the Republican Legal Information Center established under the Ministry of Justice in accordance with the Decree of the President of the Borrower's country No. 1228 dated June 16, 1993 or its successor; (h) "PIU" means the project implementation group established under the Ministry of Justice pursuant to Order of the Ministry of Justice No. 7a dated March 3, 1997, or its successor; (i) "Project Management Report" means the report prepared in accordance with Section 4.02 of this Agreement; (j) "Project Preparation Advance" means an advance made by the Bank to the Borrower pursuant to a Letter of Agreement signed on behalf of the Bank on April 1, 1997 and on behalf of the Borrower on March 22, 1997; (k) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (l) "Supreme Court" means the Supreme Court of the Borrower's country.

Article II Loan Section 2.01. The Bank agrees to provide a loan to the Borrower on the terms set out or referenced in the Loan Agreement in the amount equivalent to sixteen million five hundred US dollars ($16,500,000). Section 2.02. (a) The Loan Amount may be withdrawn from the Loan Account in accordance with the provisions of Annex 1 to this Agreement: for expenses incurred (or, if the Bank agrees, to be incurred) for goods, works, services and training costs and ongoing operating expenses required by the Project and which They must be financed by means of a Loan. (b) For the purposes of the Project, the Borrower may open and maintain a special dollar deposit account with a commercial bank on terms acceptable to the Bank, including adequate protection against legal offsets, confiscation or seizure. Funds are deposited into and disbursed from each relevant Special Account in accordance with the provisions of Annex 6 to this Agreement. (c) Immediately after the effective date of the loan, the Bank, on behalf of the Borrower, must withdraw from the Loan Account and transfer to its account the amount necessary to cover the principal amount of the Project Preparation Advance that was withdrawn and not covered on that date, and pay all unpaid fees for it. The outstanding balance of the allowed Advance payment for the preparation of the project must be cancelled. Section 2.03. The closing date of the Loan is October 1, 2003 or any later date that the Bank may set. The Bank shall immediately notify the Borrower of such a later date. Section 2.04. The Borrower pays the Bank an amount equal to one percent (1%) of the Loan amount. On the day the loan takes effect or immediately after the loan takes effect, the Bank must, on behalf of the Borrower, withdraw the amount of the specified fee from the Loan Account and transfer it to its account. Section 2.05. The Borrower pays the Bank a commission on the unused portion of the Loan at the rate of three quarters of one percent (3/4 of 1 percent) per year of the outstanding portion of the Loan principal at a given time. Section 2.06. (a) The Borrower pays interest on the principal amount of the Loan, which is periodically withdrawn and outstanding at a rate for each interest period equal to the base LIBOR rate plus the total LIBOR margin. (b) For the purposes of this Section: (i) "Interest Period" means the initial period starting from and including the date of this Agreement and up to, but not including, the first Interest Payment Date that follows it, and after the initial period - each period of time starting from and including the Interest Payment Date up to, but not including, the subsequent Interest Payment Date. (ii) "Interest Payment Date" means any date specified in Section 2.07 of this Agreement. (iii) "LIBOR Base Rate" means, for each interest accrual period, the proposed London Interbank Rate for six-month dollar deposits in the amount of on the first day of such Interest Accrual Period (or, in the case of the first Interest Accrual Period, in the amount of the interest payment date on or before the first day of such Interest Accrual Period), as will be reasonably determined by the bank as an annual percentage. (iv) "Total LIBOR margin" means, for each interest accrual period: (A) half a percentage (1/2 of 1%); (c) minus (or plus) the weighted average margin for such an Interest Accrual Period is lower (or higher) the proposed London Interbank Offered Rate or any other benchmark rates for six-month deposits in respect of payable bank borrowings or parts thereof allocated by the Bank to finance its monocurrency loans or parts thereof including the Loan, as reasonably determined by the Bank and expressed as annual interest. (c) The Bank shall notify the Borrower of the LIBOR base rate and the total LIBOR margin for each Interest Accrual Period without delay upon their determination. (d) In cases where, in the light of changes in market practices that affect the determination of interest rates specified in Section 2.06, the Bank decides that it is in the interests of borrowers as a whole and in the interests of the Bank to apply a different basis for determining the Loan interest rate than described in the above section. The Bank may change the basis for determining the interest rates applicable to the Loan, as opposed to the one specified in the Section mentioned above. The Bank may change the basis for determining the interest rates applicable to the Loan by notifying the Borrower at least six (6) months in advance. The amendment takes effect after the expiration of the notification period, unless the Borrower notifies the Bank within the specified period of its objection to such a change. In this case, the specified change will not apply to the Loan. Section 2.07. Interest and other payments are due every six months at the end of the loan period on April 15 and October 15 each year. Section 2.08. The Borrower reimburses the principal amount of the Loan debt in accordance with the depreciation schedule set out in Appendix 3 to this Agreement.

Article III Project Execution Section 3.01. (a) The Borrower declares his commitment to the objectives The Project set out in Annex 2 to this Agreement, and for this purpose it implements the Project with due care and efficiency and in accordance with existing administrative, financial and technical regulations.; immediately provides, as needed, financial and material resources, services and other resources necessary for the Project. (b) Without prejudice to the provisions of paragraph (a) of this Section, and unless the Borrower and the Bank agree otherwise, the Borrower shall implement the Project in accordance with the Implementation Program described in Annex 5 of this Agreement. (b) Section 3.02. Unless the Bank agrees otherwise, the procurement of goods, works, consulting services and training necessary for the implementation of the Project and financed by the Loan funds shall be governed by the provisions of Annex 4 to this Agreement. Section 3.03. Until the completion of the Project, the Borrower will support the Hydraulic Fracturing Unit by including an adequate number of staff members and assigning it such functions and powers, facilities and equipment as are necessary for the operation of the Project and which are acceptable to the Bank. Section 3.04. For the purposes of Section 9.07 of the General Terms and Conditions and without limitation, the Borrower: (a) based on rules acceptable to the Bank, prepares and submits to the Bank a plan for future Project work no later than six (6) months after the Closing Date of the loan or such date as the Borrower and the Bank agree to for this purpose. agreement; and (b) provides the Bank with a reasonable opportunity to exchange views with the Borrower on the specified plan.

Article IV Financial Conditions Section 4.01. (a) The Borrower establishes and ensures the operation of a financial control system, including accounting documents and accounting accounts, as well as the preparation of financial statements in a form acceptable to the Bank, which would adequately reflect the operational and financial conditions of work, and ensure separate accounting of transactions, resources and costs, related to the implementation of the Project; (b) The Borrower must ensure that the following is carried out: (i) the audit of the accounting documents, accounts and financial statements referred to in paragraph (a) of this Section and the accounting documents and accounts related to the Special Account for each financial year in accordance with auditing standards acceptable to the Bank, consistently applied by independent auditors, acceptable for the Bank. (ii) providing to the Bank, as soon as it becomes available, but in any case no later than six months after the end of each year: (A) certified copies of the financial statements referred to in paragraph (a) of this Section for the year for which the audit was conducted and (C) an opinion on such financial statements. financial statements made by the said auditors to the extent and degree of detail that will be reasonably requested by the Bank; and (iii) providing the Bank with such other information concerning the said accounting documents and accounts and their audit, as well as concerning the said auditors, as the Bank may reasonably request from time to time. (c) For all expenses for which funds have been withdrawn from the Loan Account based on expense statements, the Borrower: (i) maintains or ensures that, in accordance with paragraph (a) of this Section, all accounting documents and accounts reflecting such expenses are maintained; (ii) retains and ensures the preservation of all accounting documents (contracts, orders, invoices, invoices, receipts and other documents) attesting to such expenses for at least one year after the Bank receives the audit report for the financial year in which the last withdrawal of funds from the Loan Account was made(iii) assist representatives of the Bank in verifying such accounting documents; and (iv) ensures that such accounting documents from the accounting accounts are included in the annual audit referred to in paragraph (b) of this Section, as well as the inclusion in the report on such audit of a separate opinion of these auditors on those statements of expenses that were submitted during such a financial year, as well as on the reliability of the work and internal controls used in their preparation to justify the relevant withdrawals. Section 4.02 (a) Without limitation of the provisions of Section 4.01 of this The Borrower implements the agreements that are time-bound and acceptable to the Bank The Action Plan to strengthen the financial management system referred to in paragraph (a) of section 4.01, aimed at enabling the Borrower to prepare Project management reports acceptable to the Bank no later than April 1, 2000 or another date agreed with the Bank, and in each of them: (i) (A) are determined on a cumulative basis and for this reporting period, the actual sources and directions of the use of funds for the Project, as well as the projected sources and directions of use of Project funds for the next 6 months after the end of this reporting period, and (C) separately reflect the expenses financed from the Loan for this reporting period and the expenses proposed for financing from the Loan for the next 6 months after the end of this reporting period.; (ii) (A) A summary of and for this reporting period describes the physical progress of the Project, and (B) explains the discrepancies between actual results and previously projected goals, and (iii) Outlines the status of the procurement process for the Project and the costs of the Loan-funded contracts as of end of the reporting period. (b) Upon completion of the implementation of the Action Plan referred to in paragraph (a) of this section, in accordance with guidelines acceptable to the Bank, the Borrower will prepare and submit to the Bank a management report. The project for this period and no later than 45 days after the end of each quarter of the calendar year.

Article V Effective Date; Termination Section 5.01. The following events are specifically specified as additional conditions for the entry into force of the Loan Agreement within the scope of Section 12.01 (c) of the General Terms and Conditions, namely, that the auditors referred to in Section 4.01 (b) (i) of this Agreement have been appointed.

Section 5.02. A period of ninety (90) days from the date of signing this Agreement is hereby established for the purposes of Section 12.04 of the General Terms and Conditions. Agreements.

Article VI Representatives of the Borrower; Addresses Section 6.01. For the purposes of Section 11.03 of the General Terms and Conditions, the Minister of Finance or the Deputy Minister of Finance of the Borrower is appointed as the representative of the Borrower. Section 6.02. For the purposes of Section 11.01 of the General Terms and Conditions, the following addresses are indicated: Borrower's address: Republic of Kazakhstan 473000 Astana Republic Avenue, 60 Ministry of Finance Telex: 264126(FILIN) Bank Address: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Telegraphic address: Telex: IBRD 248423 (MCI) or Washington, D.C.64145 (MCI) In witness whereof, the parties to this Agreement, acting through their authorized representatives, have ensured the signing of this Agreement. Agreements on their behalf, respectively, in Astana, the Republic of Kazakhstan, on the day and year indicated at the very beginning of the text. Republic of Kazakhstan Authorized Representative of the International Bank for Reconstruction and Development, Acting Regional Vice President for Europe and Central Asia Appendix 1 Withdrawal of Loan funds The table below shows the Categories of items to be financed from the Loan, the allocation of Loan funds for each Category, and the percentage of expenditures on items to be financed within each category.: Category The allocated amount of % of the financed Loan expenses (in dollar equivalent) _____________________________________________________________________________ (1)Goods 100 % of expenses in foreign currency; (a) for Part B.1, B.2(a) and 4,400,000 100% of the costs in local currency of C.1 of the Project (Cost free of charge) (b) for part B.2(b) 1,700,000 80% of the costs in local currency for other provisions in local procurement (2) Consulting Services 6,100,000 100% (3) Training 2,035,000 100 % (4) 700,000 jobs 80% (5) Current operating expenses 900,000 100% (6) Repayment of an advance of 500,000 Amounts to be paid to be paid for the preparation of the project in accordance with Section 2.02 (c) of this Agreement (7) Commission 165,000 Amounts payable in accordance with Section 2.04 of this Agreement Total 16,500,000 2. For the purposes of this Application:

(a) the term "expenses in foreign currency" means expenses in the currency of any country other than the Borrower's country for goods and services supplied from the territory of any country other than the Borrower's country; (b) the term "expenses in local currency" means expenses in foreign currency The Borrower's rights to goods and services supplied from the Borrower's territory; (c) The term "Training" means fees charged to educational or other institutions and organizations providing training services and related transportation, accommodation, daily subsistence allowance, as well as other expenses related to the training of civil servants, judges and court staff; and (d) the term "additional operating expenses" means additional operating expenses incurred by the Ministry of Justice in connection with the implementation, management, supervision and verification of Project execution, including the cost of office equipment and consumables, vehicle operation, business trips, project verification costs, communications, banking services, as well as expenses, related to audits, which are required under the terms of Section 4.01 of this Agreement, the remuneration of consultants of the GPRP, with the exception of salaries of officials, government employees of the Borrower and current operating expenses incurred during the implementation of the Institute's training activities Judges, including the payment of utilities, communication services, stationery and office equipment adjustment. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals may be made to cover expenses incurred: (a) prior to the date of this Agreement; and (b) in Category (1 (b) before the Borrower develops and implements judicial administration and record-keeping methods and measures to improve the enforcement of judgments of the Supreme Court and three selected regional courts of the Republic of Kazakhstan, and prepares A national comprehensive Plan in accordance with paragraph 3 of Annex 5 to this Agreement. 4. The Bank may require withdrawal of funds from the Loan Account based on the expense statement to cover the costs of (i) goods under contracts not exceeding the equivalent of $200,000, (ii) works under contracts not exceeding the equivalent of $100,000, (iii) services provided by consulting firms under contracts not exceeding the equivalent of $100,000, (iv) services of individual consultants not exceeding 50,000 dollars; (v) training under contracts not exceeding the equivalent of $50,000, and (vi) additional running costs under contracts not exceeding the equivalent of $50,000, all subject to the terms that the Bank specifically specifies in the notification to the Borrower.

Appendix 2

Project Description The main objective of this Project is to assist the Borrower in developing the legal and regulatory system and institutions in those areas that are key to the functioning of a market economy. In particular, the Project aims to: (a) strengthen the Borrower's ability to draft laws and the lawmaking process itself, improve the quality and enforceability of legislative acts; (b) support the development of a more transparent, efficient, efficient and accessible judicial system.; (c) Improve access to more reliable, comprehensive and up-to-date legal information for government officials, judges, parliamentarians, lawyers and entrepreneurs, and the general public, and strengthen public awareness and public engagement in legal processes. The project consists of the following parts, which may be amended from time to time by agreement between the Borrower and the Bank in order to achieve the identified objectives: Part A: Drafting legislation and strengthening institutional capacities. 1. Preparation and amendment of regulatory legal acts necessary to support a market economy and economic reforms by financing the services of consultants. 2. Strengthen the Ministry of Justice's institutional capabilities in drafting, organizing, and managing legislation by financing consulting services and training. 3. To support the development of draft law writing skills among civil servants from various ministries and departments involved in lawmaking in the field of economic legislation by financing their training. Part B: Strengthening the judicial system 1. Support in the field of legal education and training through strengthening the institutional capacity of the Judicial Training Institute, developing curricula and teaching methods, conducting training seminars for judges and court staff, and developing other training activities by financing costs related to the payment of consultants, training, procurement of goods and works, and current operating expenses. 2. (a) Development and implementation of court management and case management methods and measures to improve the quality and enforcement of judgments of the Supreme Court and the three selected regional courts of the Republic Kazakhstan, through the financing of consultants, goods and training. (b) Implementation at the national level of judicial administration and record-keeping methods and measures to improve the quality and enforcement of judicial decisions of the courts of the Republic of Kazakhstan through the financing of consulting services, goods and training. Part C: Legal Information and public awareness 1. Development of a modern, reliable, inclusive and accessible system

legal information through the financing of goods, consulting services, training and work. 2. Development of a national classification of legal information, by financing the services of consultants. 3. Strengthening public awareness on legal rights and other legal issues by financing workshops and media companies through consulting services. Part D: Project management and implementation support Assistance to the Ministry of Justice in the implementation of the Project by financing the services of consultants, including audit, training and additional running costs.

* * * * * *

The project is expected to be completed by April 1, 2003.

Appendix 3

Repayment schedule Due date Payment of the principal amount of the Loan (in dollars)* October 15, 2004 355,000 April 15, 2005 365,000 October 15, 2005 375,000 April 15, 2006 385,000 October 15, 2006 395,000 April 15, 2007 405,000 October 15, 2007 420000 April 15, 2008 430000 October 15, 2008 year 445,000 April 15 , 2009 455,000 October 15 , 2009 470000 April 15 , 2010 485,000 October 15 , 2010 495,000 April 15 , 2011 510000 October 15 , 2011 525,000 April 15 , 2012 540000 October 15 , 2012 555,000 April 15 , 2013 575,000 October 15 , 2013 590000 April 15 , 2014 605,000 on October 15, 2014 625,000 on April 15, 2015 640000 on October 15, 2015 660000 on April 15, 2016 680000 on October 15, 2016 700000 on April 15, 2017 720000 on October 15, 2017 740000 on April 15, 2018 760000 on October 15, 2018 785000 on April 15, 2019 810000

* The figures in this column indicate the dollar amount to be redeemed, except as described in Section 4.04 (d) of the General Terms and Conditions.

Appendix 4

Procurement and consulting services Section I. Procurement of goods and works Part A: General provisions Goods and works are purchased in accordance with the provisions of Section I of the IBRD and IDA Loan Procurement Guidelines, published by the Bank in January 1995 and revised in January and August 1996 and September 1997 (the Guidelines) and the following provisions of Section 1 of this Annex. Part B: International competitive bidding 1. With the exception of what is described in Part C of this Section, goods and works are procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Annex 1 to Section II. Part C: Other procurement procedures 1. International procurement Goods with an estimated value of less than the equivalent of $20,000. For a contract, up to a total amount not exceeding the equivalent of $50,000 may be purchased under contracts awarded under the procurement procedure in international retail trade in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 2. National procurement Goods with an estimated value of less than the equivalent of $50,000 per contract up to a total amount not exceeding the equivalent of $500,000 may be purchased under contracts awarded under the procurement procedure in the national retail trade in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 3. Procurement of small-scale works, the cost of which is estimated to be less than 100,000 USD equivalent per contract, and collectively does not exceed the equivalent of 800,000 USD, may be procured under lump-sum fixed-price contracts awarded based on proposals received from three (3) qualified domestic contractors in reply to a written invitation. The written invitation must contain: a detailed description of the work, including the basic specifications, the required completion date, the basic form of the agreement acceptable to the Bank, and, if necessary, the relevant drawings. The contract is concluded with the contractor who will offer the lowest price for the required work and who has the experience and resources required to successfully complete the contract. Part D: Review of procurement decisions by the Bank 1. Procurement planning Before sending any invitations to participate in the prequalification or competitive bidding, the proposed procurement plan for the Project is submitted to the Bank for its review and approval in accordance with the provisions of paragraph 1 of Annex 1 to the Guidelines. All goods and works are procured in accordance with the procurement plan to be approved by the Bank, as well as in accordance with the provisions of paragraph 1.2. (a) For each contract concluded under Part B of this section, the procedure specified in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply. (b) The following procedure applies to the first two contracts concluded under Part C.1 and Part C.2 of this section: (i) before a supplier is selected, a free trade procurement contract is signed, and the Borrower submits to the Bank a report on the comparison and evaluation of the received offers with prices.; (ii) prior to signing a contract based on a free-trade procurement procedure, the Borrower must submit to the Bank a copy of the specifications and a draft contract; (iii) the procedures set out in paragraphs 2 (f), 2 (g) and 3 of Appendix 1 of the Guidelines. 3. Follow-up review For each contract covered by paragraph 2 of this Part, the procedure described in paragraph 4 of Annex 1 to the Guidelines applies. Section II. Hiring consultants Part A: General provisions Consultants' services are procured in accordance with the provisions of the Introduction and Section IV of the Guidelines on the Use of Consultants by World Bank Borrowers, published in January 1997 and revised in September 1997 (Guidance to Consultants) and the following provisions of Section II of this Annex. Part B: Selection based on quality and cost assessment 1. Except as provided in Part C of this Section, consultant services are procured under contracts awarded in accordance with the provisions of Section II of the Consultant Manual, paragraph 3 of Annex 1 thereto, Annex 2 thereto and the provisions of paragraphs 3.13 - 3.18 of the Consultant Manual applicable to the selection of consultants based on quality and cost assessment. Part C: Other procedures for the selection of consultants 1. Quality-based selection Training services are purchased under contracts awarded in accordance with the provisions of paragraphs 3.1 - 3.4 of the Consultant Recruitment Guidelines. 2. Selection based on a fixed budget Training services may be purchased under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.5 of the Consultant Recruitment Guidelines. 3. Selection based on the qualifications of consultants Local seminar and training services with an estimated cost of less than $50,000 per contract may be purchased under contracts awarded in accordance with paragraphs 3.1 and 3.7 of the Consultant Recruitment Guidelines. 4. Individual consultants Assignment services that meet the requirements specified in paragraph 5.1 of the Consultant Guidelines are purchased under contracts awarded to individual consultants in accordance with the provisions of paragraphs 5.1 - 5.3 of the Consultant Guidelines. Part D: Review by the Bank of the selection process of consultants 1. Selection planning Before sending any requests or suggestions to the consultants, the proposed plan for the selection of Project consultants is submitted to the Bank or Association for its review and approval in accordance with the provisions of paragraph 1 of Annex 1 to the Consultant Guidelines. All consultant services are selected according to a selection plan to be approved by the Bank and in accordance with the provisions of paragraph 1.2. Preliminary review (a) For each contract with an estimated value equivalent to $100,000. or more, the procedure set out in paragraphs 1, 2 (as opposed to the third subparagraph of paragraph 2 (a)) and 5 of Annex 1 of the Guidance to Consultants applies. (b) For each contract, when hiring individual consultants with an estimated value equivalent to $50,000 or more, the Bank is provided with qualifications, a description of work experience, terms of reference and conditions for hiring consultants for preliminary review and approval. The contract is awarded only after such approval is given. 3. Follow-up review. For each contract that does not fall within the scope of paragraph 2 of this Part, the procedure described in paragraph 4 of Annex 1 of the Consultants' Guide applies.

Appendix 5

Implementation Program 1. The Borrower: (a) adheres to policies and procedures that enable him to continuously monitor and evaluate, according to indicators agreed between the Borrower and the Bank, the implementation of the Project and the achievement of its objectives; (b) in accordance with the terms of reference satisfied by the Bank, prepare and submit to the Bank, no later than 60 (sixty) days after the end of each calendar year of the Project, an annual report on the results of monitoring and evaluation of activities carried out in accordance with paragraph (a) of this Section, on the progress achieved as a result of the Project as of the date this report and on the proposed measures to ensure the effectiveness of the Project and achieve its objectives in the subsequent period; and (c) within 60 (sixty) days after the end of the period referred to in subparagraph (b) above, or until such later date as the Bank may request, review with the Bank the report referred to in subparagraph (b) of this paragraph, and thereafter take all measures, necessary to ensure the effective completion of the Project and the achievement of its objectives based on the conclusions and recommendations of this report and the Bank's opinion on this matter. 2. The Borrower performs Part A of the Project through the Ministry of Finance, with daily technical assistance provided by PIU. 3. The Borrower implements Part B.1 of the Project through the DOJ, the Supreme Court and the IOS, and Part B.2 of the Project through the DOJ Judicial System Strengthening Oversight Committee and the Supreme Court, as well as with daily technical assistance provided by the PIU. Prior to the implementation of Part B.2 (b) of the Project, the Borrower will prepare a comprehensive Action Plan for the implementation of Part B.2 (b) of the Project acceptable to the Bank and: (a) describe the implementation of Part B.2 (b) of the Project and continue the interim assessment of reforms and activities (methods of judicial administration and judicial records management, measures to improve quality and enforcement of judgments) carried out under Part B.2 (a) of the draft; (b) will show that the Supreme Court and the courts from the three regions included in the

Parts B.2 (a) of the Draft deal with at least 50% of cases in accordance with the new judicial record-keeping methods. (c) describe the legal and regulatory actions and technical needs required to implement Part B.2 (b) of the Project. 4. The Borrower will complete Part C.1 of the Project through the DOJ and RCPI, and Parts C.2 and C.3 of the Project through the DOJ, with daily technical assistance provided by the PIU.

Appendix 6

Special account 1. For the purposes of this Application:

(a) The term "eligible categories" means Categories (1), (2), (3), (4) and (5) specified in the table of paragraph 1 of Annex 1 to this (b) the term "eligible costs" means the costs of goods, works and services at a reasonable cost required for the Project and to be financed from Loan funds allocated periodically to eligible Categories in accordance with the provisions of Annex 1 to this Agreement; and (c) the term "Authorized Appropriations" means an amount equivalent to 1,000,000 dollars to be withdrawn from the Loan Account and credited to a Special Account in accordance with paragraph 3 (a) of this Annex, however, provided that, unless the Bank agrees otherwise. Authorized allocations will be limited to the equivalent of $350,000 until the total amount of withdrawals from the Loan Account plus the total amount of all outstanding special obligations assumed by the Bank in accordance with Section 5.02 of the General Terms and Conditions reaches or exceeds the equivalent of $2,000,000. 2. Payments from a Special Account are made solely to cover eligible expenses in accordance with the provisions of this Appendix. 3. Upon receipt by the Bank of an acceptable confirmation that The Special Account is properly opened, withdrawals of Authorized Allocations and subsequent withdrawals to replenish the Special Account are made as follows: (a) In order to withdraw the Authorized Appropriations, the Borrower shall send to the Bank a request or requests for crediting to the appropriate Special Account an amount or amounts not exceeding the total amount of the Authorized Appropriations. Based on such request or requests, the Bank, on behalf of the Borrower, withdraws from the Loan Account and deposits in the appropriate Special Account the amount or amounts requested by the Borrower. (b) (i) In order to replenish the relevant Special Account, the Borrower sends requests to the Bank for deposits to be credited to the relevant Special Account at such intervals as the Bank specifies. (ii) prior to or at the time of submitting each of these requests, the Borrower submits to the Bank the documents and other evidence that, in accordance with paragraph 4 of this Annex, are necessary for making the payment or payments in connection with which the replenishment request is made. Based on each of these requests, the Bank, on behalf of the Borrower, withdraws from the Loan Account and credits to the appropriate Special Account the amount requested by the Borrower and the payment of which from the Special Account to cover eligible costs is confirmed by the above-mentioned documents and other evidence. All such deposits are withdrawn by the Bank from the Loan Account within the appropriate eligible Categories and in appropriate equivalent amounts, justified by the above documents and other evidence. 4. With respect to each payment made by the Borrower from a Special Account, the Borrower must, within the time limits reasonably requested by the Bank, provide the Bank with such documents and other evidence that would confirm that such payment was made solely to cover eligible costs. 5. Regardless of the provisions of paragraph 3 of this Appendix, the Bank will not be required to make further funds transfers to any account. Special Account: (a) if at any time the Bank determines that all subsequent withdrawals must be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Terms and Conditions and paragraph (a) of Section 2.02 of this Agreement; (b) if the Borrower has failed to submit to the Bank, within the time period specified in Section 4.01 (b) (ii) of this Agreement, any of the audit reports that should have been submitted to the Bank in accordance with that Section in connection with the audit of accounting documents and accounts for the Special Account; (c) if at any time the Bank notifies the Borrower of its intention to suspend, in whole or in part, the Borrower's right to withdraw funds from the Loan Account in accordance with the provisions of 6.02 of the General Terms and Conditions; or (d) as soon as the total outstanding Loan amount allocated to eligible The categories of the Special Account minus the total amount of all outstanding special obligations assumed by the Bank in accordance with Section 5.02 of the General Terms and Conditions will be equal to the equivalent of twice the amount of Authorized Allocations for the Special Account. After that, the withdrawal from the Loan Account of the remaining outstanding Loan amount allocated for eligible Categories are carried out by such procedures, which the Bank will inform about To the borrower in the notification. Such subsequent withdrawals are made only after and only if the Bank is satisfied that all amounts remaining in the relevant Special Account as of the date of such notification will be used to make payments at eligible costs. 6. (a) If at any time the Bank determines that any payment from a Special Account: (i) was made to cover expenses or in an amount that is not authorized in accordance with paragraph 2 of this Annex; or (ii) has not been substantiated by the certificate provided to the Bank, the Borrower, upon receiving the Bank's notification, must immediately: (A) provide such additional certificate as the Bank may request or (C) credit to the appropriate Special Account (or, if the Bank requests such refund to the Bank) an amount equal to the amount of such payment or parts of it,

which is unjustified or unjustified. Unless the Bank agrees otherwise, the Bank will not further deposit funds into any Special Account until the Borrower provides such supporting documentation or makes such a transfer or refund, as appropriate.

President

Republic of Kazakhstan

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