On ratification of the Framework Agreement between the Government of the Republic of Kazakhstan and the European Bank for Reconstruction and Development on Technical Assistance and Cooperation

Home / RLA / On ratification of the Framework Agreement between the Government of the Republic of Kazakhstan and the European Bank for Reconstruction and Development on Technical Assistance and Cooperation

The Law of the Republic of Kazakhstan dated October 22, 2005 No. 83

To ratify the Framework Agreement between the Government of the Republic of Kazakhstan and the European Bank for Reconstruction and Development on Technical Assistance and Cooperation, signed in Astana on December 10, 2004.

President of the Republic of Kazakhstan

FRAMEWORK AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN AND THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT ON TECHNICAL COOPERATION ASSISTANCE AND COOPERATION

This AGREEMENT was concluded on December 10, 2004 between the GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN (the "Government") and the EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (the "Bank").

(A) The Bank is an international financial institution established under a multilateral agreement known as the Agreement Establishing the European Bank for Reconstruction and Development dated May 29, 1990 (hereinafter referred to as the "EBRD Agreement") and entered into force on March 28, 1991.

(B) The Republic of Kazakhstan is a member of the Bank and a State Party to the EBRD Agreement.

(C) In accordance with article 2(1)(iv) of the EBRD Agreement, the Bank, in order to fulfill its functions, may provide technical assistance in the preparation, financing and implementation of relevant projects, both individually and within the framework of special investment programs. The Bank's regular and special operations include providing technical assistance for the reconstruction or development of infrastructure, including environmental programs necessary for the development of the private sector and the transition to a market-oriented economy. Any activity of this kind is hereinafter referred to as "Technical Assistance".

(D) Moreover, the Bank may enter into cooperation agreements with any public or private entities through which the Bank receives and manages grant funds received from such entities to provide and finance technical assistance (hereinafter referred to as "Grant Funds").

(E) As a rule, the Bank provides or organizes Technical Assistance for the benefit of current or potential clients of the Bank, including government ministries, administrative units, public and private entities. In addition, Technical Assistance can be provided in the interests of the Bank itself. The beneficiary or the person receiving Technical Assistance is hereinafter referred to as the "Beneficiary". If the Beneficiary is any public or private entity other than a Bank, the Beneficiary is hereinafter referred to as a "Non-Bank Beneficiary".

(F) Technical assistance is provided through technical assistance projects (hereinafter referred to as "CU Projects"), which determine the terms of reference or scope of work, and involve consultants to perform specific terms of reference and scope of work. The work of such consultants may be funded from the Bank's usual core resources, or from the resources of the Bank's special funds (hereinafter referred to as the "Bank's Resources"), or from Grants. TC projects can be carried out by consultants hired by the Bank or consultants hired by a Non-Bank Beneficiary.

(G) The Bank, from time to time, also acts as the administrator and manager of Grant Funds for the purchase of goods, works and services related to investments financed by the Bank. The provision of Grant Funds to a Non-Bank Beneficiary for the purchase of goods, works and services is hereinafter referred to as "Grant-funded Co-financing".

(H) The Bank and the Government wish to establish a common framework of terms and conditions in order to facilitate the provision of Technical Assistance and Co-financing through grants, including the provision of tax exemptions as reflected herein, in addition to any tax exemptions provided by the Tax Code of the Republic of Kazakhstan.

The Parties hereby AGREE on the following:

Article I The subject of this Agreement

1.01 The Bank and the Government agree that:

(a) Technical assistance and TC Projects funded, in part or in full, directly by the Bank from the Bank's Resources or by the Bank as the manager and administrator of Grant Funds, and

(b) Co-financing from Grants shall be carried out in accordance with the terms and conditions of this Agreement.

1.02 The Preamble is an integral part of this Agreement.

1.03 In common practice, "technical assistance" is also referred to as "technical cooperation", and the terms are equivalent in meaning and interchangeable. Therefore, the term "Technical Assistance" used in this Agreement includes technical cooperation. Technical assistance may include, but is not limited to, the following:

(a) all types of consulting services provided by Consultants;

(b) equipment and materials purchased in a manner satisfactory to the Bank;

(d) Co-financing with other technical assistance from external sources; and

(e) any type of assistance agreed upon by the Government and the Bank for inclusion in Technical Assistance.

1.04 If the Beneficiary is an entity other than the Bank, the Bank enters into an agreement with such Beneficiary, which specifies the terms and conditions under which Technical Assistance or Co-financing from grants will be provided (hereinafter referred to as the "Grant Agreement"). One Grant Agreement may provide for both Technical Assistance and Co-financing from grant funds.

Article II Implementation of CU projects

2.01 TC projects are carried out by Consultants. The term "Consultants" used in this Agreement means individuals and entities, including individual independent experts, consulting firms or companies, consortia consisting of individuals and/or consulting firms or companies, and includes: (i) international and local Consultants, (ii) individuals or entities that are subcontractors and agents of Consultants, as well as (iii) experts, employees and staff of legal entities. Consultants are hired by a Bank or a Non-Bank Beneficiary under consulting service agreements (hereinafter referred to as the "Consulting Agreement").

2.02 Technical specifications for Consultants are specified in the relevant Consulting Contracts. The content of such technical assignments may be changed by entering into a written agreement in accordance with the terms of the Consulting Agreement.

Article III Exemption from taxation

3.01 All imported and local materials, equipment, works and services, including consulting, used in the course of providing Technical Assistance or Co-financing from grants and financed from the Bank's Resources or Grants, are exempt from all types of taxes (direct and indirect, including VAT), customs duties, as well as other charges and mandatory payments levied by the Republic of Kazakhstan or on its territory.

3.02 Subject to paragraph 3.03, all receipts, income or reimbursement of expenses incurred by Consultants who provided Technical Assistance are exempt from all taxes and other fees and mandatory payments levied by the Republic of Kazakhstan or on its territory, to the extent that such receipts, income or reimbursement are financed from the Bank's Resources or Funds grants.

3.03 The exemption provided for in paragraph 3.02 does not apply to citizens of the Republic of Kazakhstan who permanently reside in the Republic of Kazakhstan and are required, according to the legislation of the Republic of Kazakhstan, to pay income tax on the territory of the Republic of Kazakhstan for any other reason.

3.04 The cost of services provided as part of all Technical Assistance, as well as the cost of all Co-financing from grants, are exempt from income and corporate taxes levied by Kazakhstan or on its territory, and are not and should not be considered taxable benefits or taxable income of the Beneficiary, who may benefit directly or indirectly from such Technical Assistance. or Co-financing with grant funds.

Article IV Immunities, privileges and exemptions of consultants

4.01 Without any restrictions and subject to paragraph 3.02, Consultants, regardless of whether they are individuals or legal entities, are assigned the status of experts who carry out the Bank's orders, and they are subject to all the immunities, privileges and exemptions provided for such experts by the provisions of the EBRD Agreement, unless the Bank waives from such immunities, privileges and exemptions, namely:

(a) Consultants (if they are not citizens of the Republic of Kazakhstan) enjoy the same immunities in respect of immigration restrictions, registration requirements for foreigners and obligations of military service in the Republic of Kazakhstan, as well as the same benefits in terms of currency regulation that are provided by the Republic of Kazakhstan to Bank employees;

(b) Consultants enjoy the same relocation treatment as is provided by the Republic of Kazakhstan to Bank employees.

Article V Other provisions

5.01 For the purposes of relations between the parties, this Agreement shall enter into force after its ratification by the Parliament of the Republic of Kazakhstan.

5.02 The Government will carry out all domestic procedures for its ratification for the entry into force of this Agreement in the Republic of Kazakhstan so that Beneficiaries and Consultants can rely on it.

5.03 This Agreement may be amended by signing the relevant document in writing by the Government and the Bank.

5.04 This Agreement is made in two original copies, each in Kazakh, Russian and English. In case of disagreement in the interpretation of the provisions of this Agreement, the parties will be guided by the English text.

5.05 Nothing in this Agreement restricts or should be interpreted as limiting any of the immunities, privileges or exemptions granted to the Bank by the EBRD Agreement, international convention or applicable law.

IN WITNESS WHEREOF, this Agreement has been signed by the respective representatives of the Parties.

For: For:

GOVERNMENT EUROPEAN BANK OF THE REPUBLIC OF KAZAKHSTAN FOR RECONSTRUCTION AND DEVELOPMENT

President

Republic of Kazakhstan

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