On the review of compliance with paragraph 4 of Article 26 of the Constitution of the Republic of Kazakhstan, Article 13 of the Law of the Republic of Kazakhstan dated November 18, 2015 "On Combating Corruption", Article 154 of the Code of Administrative Offences of the Republic of Kazakhstan dated July 5, 2014

Regulatory Resolution of the Constitutional Court of the Republic of Kazakhstan dated June 13, 2023 No. 19-NP

    The Constitutional Court of the Republic of Kazakhstan, composed of Chairman Azimova E.A., judges Eskendirov A.K., Zhakipbaev K.T., Zhatkanbayeva A.E., Kydyrbaeva A.K., Musin K.S., Nurmukhanov B.M., Ongarbaev E.A., Podoprigora R.A., Sarsembaev E.J. and Udartseva S.F., with the participation of:

    The subject of the appeal, A.A. Belgibaev, and his representative, lawyer A.A. Kabdosheva.,

    representatives:

     Anti–Corruption Agency of the Republic of Kazakhstan - First Deputy Chairman Malakhov D.M.,

    Agency of the Republic of Kazakhstan for Civil Service Affairs – Deputy Chairman S.S. Muksimov.,

    Ministry of Justice of the Republic of Kazakhstan – Vice Minister Mukanova A.K.,

    The Prosecutor General's Office of the Republic of Kazakhstan – Advisor to the Prosecutor General Adamova T.B.,

     In an open meeting, he considered the appeal of Belgibaev Askarbek Adylbekovich to verify compliance with the Constitution of the Republic of Kazakhstan with Article 13 of the Law of the Republic of Kazakhstan dated November 18, 2015 "On Combating Corruption" (hereinafter referred to as the Law), Article 154 of the Code of Administrative Offences of the Republic of Kazakhstan dated July 5, 2014 (hereinafter referred to as the Administrative Code) and Article 895 of the Civil Code of the Republic of Kazakhstan. Kazakhstan (Special Part) dated July 1, 1999 (hereinafter referred to as the Civil Code (Special Part).

    Having heard the report of the speaker, Judge of the Constitutional Court of the Republic of Kazakhstan Ongarbayev E.A., having studied the materials of the constitutional proceedings, having analyzed international experience, legislation of the Republic of Kazakhstan and individual foreign countries, the Constitutional Court of the Republic of Kazakhstan

     installed:

     The Constitutional Court of the Republic of Kazakhstan has received an appeal from A.A. Belgibaev (hereinafter referred to as the IP) for consideration of compliance with paragraph 4 of Article 26 of the Constitution of the Republic of Kazakhstan, Article 13 of the Law, Article 154 of the Administrative Code and Article 895 of the Civil Code (Special Part).

    It follows from the appeal and the submitted materials that the sole proprietor carried out business activities that were related to the provision of parking spaces for vehicles. The land plot for parking was provided to the sole proprietor for temporary use for a period of 6 years.

     On June 22, 2018, the subject of the appeal was appointed director of a municipal government agency. In accordance with subparagraph 4) of article 1 of the Law, a person performing managerial functions in a State organization is a person equivalent to persons authorized to perform State functions.

     In accordance with article 13 of the Law, persons equated to persons authorized to perform State functions are prohibited from engaging in entrepreneurial activity.

     According to article 895 of the Civil Code (Special Part), the property of a civil servant used for entrepreneurial activities is subject to transfer to trust management in cases and in accordance with the procedure provided for by legislative acts.

      The subject of the appeal claims that the sole proprietor is not directly registered and there is no property used for entrepreneurial activity, which, according to Article 895 of the Civil Code (Special Part), would be subject to transfer to trust management. After his appointment, he was unable to formalize a trust management agreement because he was not the owner of the land plot. In this regard, with a notarized power of attorney, he transferred to his daughter the right to manage and perform all actions related to the entrepreneurial activity of the sole proprietor.

     By the decision of the specialized Court for Administrative Offenses of the city of Ust-Kamenogorsk dated October 7, 2022, the subject of the appeal was brought to administrative responsibility under Article 154 of the Administrative Code for engaging in entrepreneurial activity by a person for whom the legislation of the Republic of Kazakhstan prohibits such activities. By the decision of the Judicial Board for Criminal Cases of the East Kazakhstan Regional Court dated November 9, 2022, his appeal was dismissed.

     Based on the above, the subject of the appeal believes that the prohibition established by article 13 of the Law violates his right to freedom of entrepreneurial activity, as well as the free use of his property for any legitimate entrepreneurial activity (paragraph 4 of Article 26 of the Constitution).

    When verifying the constitutionality of the considered norms of the Law, the Civil Code (Special Part) and the Administrative Code in relation to the subject of the appeal, the Constitutional Court proceeds from the following.

In accordance with paragraph 4 of article 33 of the Constitution, citizens of the Republic have an equal right to access public service. The requirements for a candidate for a civil servant position are determined only by the nature of their official duties and are established by law.

     The Constitutional Court, in its regulatory resolution No. 4 dated March 6, 2023, noted that, taking into account the mission of the civil service, the special legal status of civil servants, and the specifics of their tasks, the state has the right to determine the rules for citizens to enter and complete public service, including the requirements for candidates and the corresponding restrictions that may be associated with the need to ensure the effectiveness of the state apparatus, the trust of the people as the only source of State power and the prevention of abuse of the powers granted.

     Some of these rules and restrictions are aimed at countering corruption, which poses a serious threat to constitutional values protected by law. The legislation of the Republic of Kazakhstan proceeds from the need for comprehensive anti-corruption measures, extending the tools and measures provided for in it to persons working in public authorities, state and other organizations, taking into account their public law functions, the nature and volume of their assets and other circumstances.

    The anti-corruption policy of the state is aimed at reducing corruption risks, increasing confidence in the activities of government agencies and consists of legal, administrative, organizational and other measures. The system of anti-corruption measures provided for by the Law includes, among others, anti-corruption restrictions that apply not only to persons holding a responsible public position, persons authorized to perform public functions, officials, but also to persons equated to persons authorized to perform public functions. They may involve restrictions on certain constitutional human and civil rights, including the right of everyone to freedom of entrepreneurial activity, the free use of their property for any legitimate business activity (paragraph 4 of article 26 of the Constitution), which plays an important role in the implementation of the provision on economic development for the benefit of the entire people.

     The Constitutional Court has repeatedly noted that the grounds and limits of restrictive measures must comply with the requirements of paragraph 1 of Article 39 of the Constitution, according to which "human rights and freedoms may be restricted only by laws and only to the extent necessary to protect the constitutional order, public order, human rights and freedoms, health and morals." population" (regulatory resolutions No. 11 dated April 21, 2023, No. 14-NP dated May 18, 2023).

    When imposing restrictions related to the exercise of the right to freedom of entrepreneurial activity by civil servants and other persons, the legislator must strictly pursue these goals.

    In turn, this constitutional provision is consistent with paragraph 2 of article 29 of the Universal Declaration of Human Rights (adopted by resolution 217 A (III) of the UN General Assembly on December 10, 1948), according to which, in exercising their rights and freedoms, everyone should be subject only to such restrictions as are established by law solely for the purpose of ensuring proper recognition and respecting the rights and freedoms of others and meeting the just demands of morality, public order and the general welfare in a democratic society.

    The outlined approaches to combating corruption offenses are also laid down in international acts adopted in this area.

 

     The United Nations Convention against Corruption of October 31, 2003 (hereinafter – The Convention), ratified by the Law of the Republic of Kazakhstan dated May 4, 2008, establishes that each State Party, in accordance with the fundamental principles of its legal system, develops and implements or implements an effective and coordinated anti-corruption policy that promotes public participation and reflects the principles of the rule of law, proper management of public affairs and public property, integrity and integrity, transparency and responsibility (paragraph 1 of Article 5).

In the Convention, the term "public official" means: "(i) Any appointed or elected person who holds a position in a legislative, executive, administrative or judicial body of a State Party on a permanent or temporary basis, with or without pay, regardless of the level of that person's position; (ii) Any other person performing any public function, including for a public agency or a public enterprise, or providing any public service, as defined in the domestic law of the State Party and as applied in the relevant field of legal regulation of that State Party; (iii) Any other person, defined as a "public official" in the domestic legislation of the Participating State. Nevertheless, for the purposes of certain specific measures provided for in chapter II of this Convention, "public official" may mean any person performing a public function or providing a public service, as defined in the domestic law of a State Party and as applied in the relevant area of that State's legal regulation.- a participant" (subparagraph (a) of article 2).

One of the anti-corruption restrictions established in the Law is the inadmissibility of carrying out activities incompatible with the performance of state functions.

    An analysis of international experience shows that in many States, when a public official performs his functions, certain restrictions are imposed on engaging in other paid activities, including entrepreneurial ones. In some countries, prohibitions and restrictions apply not only during the period of employment, but also for a certain period after dismissal.

    The limits of prohibitions and restrictions are determined differentially, depending on the category of the position, its functional orientation (main or auxiliary) and other criteria, taking into account the presence or absence of a conflict of interest.

     This practice is consistent with the requirements of article 7, paragraph 4, of the Convention: "Each State Party shall strive, in accordance with the fundamental principles of its domestic law, to establish, maintain and strengthen systems that promote transparency and prevent conflicts of interest." It is the responsibility of national legislators to develop specific policy measures to control conflicts of interest.

    The Constitution explicitly prohibits business activities for individuals – the President of the Republic (paragraph 1 of Article 43), members of Parliament (paragraph 3 of Article 52), members of the Government (paragraph 2 of Article 68), judges of the Constitutional Court (paragraph 4 of Article 71) and judges (paragraph 4 of Article 79).

     The Constitutional Court believes that restrictions related to the exercise by public officials of the constitutional right to freedom of entrepreneurial activity should be differentiated and determined by the nature of their official duties, as indicated in paragraph 4 of Article 33 of the Constitution, and are also aimed at preventing them from using their powers in personal, group and other non-official interests.

     In accordance with subparagraph 2) paragraph 1 of Article 13 of the Law to persons holding a responsible public position, persons authorized to perform state functions (with the exception of deputies of maslikhats who do not carry out their activities on a permanent or exempt basis), persons equated to persons authorized to perform state functions (with the exception of candidates for President of the Republic of Kazakhstan, deputies of the Parliament of the Republic of Kazakhstan or maslikhats, akims of districts, cities of regional significance, cities of regional significance, towns, villages, rural districts, as well as members of elected local government bodies), officials are prohibited from engaging in entrepreneurial activities, with the exception of the acquisition and (or) sale of shares of open and interval mutual funds, bonds on the organized securities market, shares of commercial organizations (common shares in the amount not exceeding five percent of the total number of voting shares shares of organizations) on the organized securities market.

     To this end, according to article 12 of the Law, these persons, in particular persons equated to persons authorized to perform state functions, assume anti-corruption restrictions, including on carrying out activities incompatible with the performance of state functions. Failure to comply with anti-corruption restrictions entails refusal to accept a position or dismissal (dismissal from office, termination of powers), their non-compliance is the basis for dismissal (dismissal from office, termination of powers). The conflict of interests is eliminated by transferring the property belonging to them to the trust management, the use of which entails income generation.

    The ban on engaging in entrepreneurial activity of this category of persons is caused by the need to eliminate conflicts of interest, prevent abuse of official authority and prevent corruption offenses.

    At the same time, the problems identified during the constitutional proceedings related to the regulation of anti-corruption legislation and the application of certain prohibitions and restrictions in practice indicate the need to focus on further legislative improvement of the conditions of public service in order to increase its attractiveness, while maintaining a balance between private and public interests.

     The current legislation gives the right to persons holding a responsible government position, persons authorized to perform government functions, persons equated to persons authorized to perform government functions, officials to lease housing, acquire and (or) sell shares of open and interval mutual funds, bonds on the organized securities market, shares of commercial organizations in the organized securities market, as well as engage in educational, scientific and other creative activities. At the same time, property rental is limited only to housing, while obtaining legitimate income from renting out other property is not regulated by law.

     The Constitutional Court considers that prohibitions and restrictions should be established in such a way that they are accompanied by other incentive measures (for example, the establishment of additional social guarantees, conditions for organizing the work of a civil servant, granting the right to engage in other paid activities provided there is no conflict of interest).

     This is also noted in the Concept of the Anti–Corruption Policy of the Republic of Kazakhstan for 2022-2026, approved by Decree of the President of the Republic of Kazakhstan dated February 2, 2022 No. 802.

     The introduction of the same prohibitions and restrictions for different categories of public officials, in the absence of consideration of tasks and functional responsibilities, other working conditions and social protection, may also generate additional corruption risks, including due to limited opportunities for legitimate additional income unrelated to their functions.

     In particular, the legislation of the Republic does not clearly regulate the possibilities of legally obtaining additional income for various business entities engaged in such activities with or without the establishment of a legal entity, in case of admission to public service and taking into account the requirements of anti-corruption restrictions.

Article 154 of the Administrative Code provides for administrative liability for engaging in entrepreneurial activity by a person for whom a ban on such activity is established by law.

     The specified norm corresponds to subparagraph 3) paragraph 1 of Article 13, article 18 of the Law of the Republic of Kazakhstan dated November 23, 2015 "On the Civil Service of the Republic of Kazakhstan" and Article 13 of the Law, which establish relevant prohibitions related to the conduct of entrepreneurial activities by civil servants and other persons. However, based on the provisions of paragraph 4 of article 33 and paragraph 1 of article 39 of the Constitution, the prohibition should be established only by laws.

Article 895 of the Civil Code (Special Part) stipulates that the property of a civil servant used for entrepreneurial activities is subject to transfer to trust management in cases and in accordance with the procedure provided for by legislative acts. This rule is of a blank nature.

     The Constitutional Court does not assess the constitutionality of Article 895 of the Civil Code (Special Part), since its provisions do not relate to the rights and freedoms of persons equated to persons authorized to perform State functions.

     At the same time, the procedure for transferring property by civil servants to trust management is stipulated in paragraph 2 of Article 13 of the Law "On Civil Service of the Republic of Kazakhstan" and the Rules for Transferring Property of Civil Servants to Trust Management, approved by Order No. 116 of the Chairman of the Agency of the Republic of Kazakhstan for Civil Service Affairs dated May 18, 2023 (hereinafter referred to as the Rules).

     According to subparagraph 1) of paragraph 2 of the Rules, trust management is the activity of a trustee to manage on his behalf the property of a civil servant transferred to his possession, use and disposal, carried out in the interests of a civil servant or another person designated by him (beneficiary) within the powers established by the trust management agreement.

The trust management of the property of a civil servant arises (is established) on the basis of a transaction or an administrative act.

    A civil servant, within thirty calendar days from the date of assuming office for the duration of his public service, transfers to the trust management the shares owned by him, shares (shares) in the authorized capital of commercial organizations and other property, the use of which entails income, with the exception of money lawfully owned by this person, as well as property transferred in the property lease (paragraphs 4 and 5 of the Rules).

    The Constitutional Court believes that when a citizen who is an individual entrepreneur enters the civil service, his property, the use of which entails income, or a share in a joint venture are subject to transfer to trust management according to the general rules.

    It should be borne in mind that citizens engaged in entrepreneurial activity without forming a legal entity are subject to the rules of the Civil Code governing the activities of legal entities that are commercial organizations, unless otherwise provided by legislation or the nature of the legal relationship (Article 19 of the Civil Code of the Republic of Kazakhstan (General Part) dated December 27, 1994).

     In accordance with paragraph 1 of Article 884 of the Civil Code (Special Part), the owner, as well as the subject of other property rights or the competent authority authorized to transfer property to trust management, may be the subject of the trust management of property (founder). Accordingly, an individual entrepreneur who does not have property by right of ownership, but is the subject of other property rights, may transfer them to trust management by virtue of Article 195 of the Civil Code (General Part).

     In order to ensure proper implementation of the considered anti-corruption restriction, it is advisable to adopt a regulatory legal act regulating the transfer of property to trust management by the persons specified in paragraph 1 of Article 13 of the Law.

     Based on the above, guided by paragraph 3 of Article 72 and paragraph 3 of Article 74 of the Constitution of the Republic of Kazakhstan, subparagraph 3) paragraph 4 of article 23, articles 55-58, 62, paragraph 4 of article 64 and subparagraph 2) paragraph 1 of Article 65 of the Constitutional Law of the Republic of Kazakhstan dated November 5, 2022 "On the Constitutional Court of the Republic of Kazakhstan", in relation to the subject of the appeal, the Constitutional Court of the Republic of Kazakhstan

     Decides:

To recognize Article 13 of the Law of the Republic of Kazakhstan "On Combating Corruption" as inconsistent with paragraph 4 of Article 26 and paragraph 1 of Article 39 of the Constitution of the Republic of Kazakhstan regarding the restriction of the right to freedom of entrepreneurial activity of persons equated to persons authorized to perform state functions, if such restriction is not conditioned by the objectives of protecting the constitutional order, the protection of public order, human rights and freedoms, public health and morals.

To recognize Article 154 of the Code of Administrative Offences of the Republic of Kazakhstan corresponding to paragraph 4 of Article 26 of the Constitution of the Republic of Kazakhstan in the following interpretation:

     administrative responsibility for the commission of an act provided for in this article occurs in cases where a ban on entrepreneurial activity is established by the laws of the Republic of Kazakhstan.

No later than six months after the publication of this regulatory resolution, the Government of the Republic of Kazakhstan should submit to the Mazhilis of the Parliament of the Republic of Kazakhstan a draft law on amendments and additions to legislative acts of the Republic of Kazakhstan regulating anti-corruption restrictions for civil servants and persons equated to persons authorized to perform state functions, taking into account the legal positions of the Constitutional Court of the Republic of Kazakhstan, set forth in this regulatory resolution.

This regulatory resolution comes into force from the date of its adoption, is generally binding throughout the Republic, final and not subject to appeal.

To publish this regulatory resolution in Kazakh and Russian in periodicals that have received the right to officially publish legislative acts, the unified legal information system and on the Internet resource of the Constitutional Court of the Republic of Kazakhstan.

    Constitutional Court of the Republic of Kazakhstan

 

© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan  

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