On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on the implementation of the project "Construction and operation of a plant for the production of mineral fertilizers"

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On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on the implementation of the project "Construction and operation of a plant for the production of mineral fertilizers"

The Law of the Republic of Kazakhstan dated January 21, 2022 No. 102-VII SAM.

To ratify the Agreement between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on the implementation of the project "Construction and operation of a plant for the production of mineral fertilizers", concluded in Moscow on July 21, 2020.

President of the Republic of Kazakhstan

K. TOKAEV

AGREEMENT between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on the implementation of the project "Construction and operation of a plant for the production of mineral fertilizers"

The Government of the Republic of Kazakhstan and the Government of the Russian Federation, hereinafter referred to as the Parties,

Expressing interest in the implementation of the project carried out on the territory of the Republic of Kazakhstan, based on the principles of mutually beneficial cooperation,

Taking into account the importance of the agreements to be concluded in connection with the implementation of the project,

Emphasizing that the Parties have expressed a desire to conclude this Agreement, acting in the interests and on behalf of their countries in order to facilitate the successful implementation of the project and the application of benefits, support measures and preferences for the implementation of the project, as well as for the persons involved in the implementation of the project,

guided by the Agreement between the Government of the Republic of Kazakhstan and the Government of the Russian Federation on the Promotion and Mutual Protection of Investments dated July 6, 1998.,

have agreed on the following:

Article 1 Concepts used

The terms used in this Agreement mean the following:

"affiliated person" - in relation to an investor, a project company or a subsurface user, any person involved in the implementation of the project who is part of the same group of persons with the investor, the project company or the subsurface user (as provided for by the legislation of the Republic of Kazakhstan);

"gas" means natural gas supplied by a gas supplier (as provided for in paragraph 3 of Article 8 of this Agreement);

"gas pipeline" means a gas pipeline branch from the connection point to the territory of the plant with a length of up to 3 (three) kilometers, necessary for the purpose of gas supply in accordance with the contract provided for in subparagraph "a" of paragraph 3 of Article 8 of this Agreement.;

"State organization" means an organization in which the Republic of Kazakhstan owns (directly or indirectly) a share of capital or a similar interest and which is (directly or indirectly) controlled by the Republic of Kazakhstan, including agents and representatives of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan. At the same time, the word "control" means the authority to manage (directly or indirectly) a person or determine the principles of his management and policy based on ownership of a block of shares, or by contract, or otherwise (according to the legislation of the Republic of Kazakhstan);

"state body" means the Government of the Republic of Kazakhstan, any of the state legal entities of the Republic of Kazakhstan having the status of a state body of the Republic of Kazakhstan, any of the local executive or representative bodies of the Republic of Kazakhstan, or any other person acting on behalf of the Republic of Kazakhstan.;

"completion date" - the date of commissioning of the plant in full and (or) the date of completion of the plant in full in accordance with the legislation of the Republic of Kazakhstan (depending on which of the specified events occurs later);

"the current financial institution for entrepreneurship support" is the Development Bank of Kazakhstan Joint Stock Company, the Damu Entrepreneurship Development Fund Joint Stock Company, QazTech Ventures Joint Stock Company, social and entrepreneurial corporations and other financial institutions for entrepreneurship support in the Republic of Kazakhstan;

"project income" means any income of the project company received from the production and sale of the plant's products, including income from the increase in value from the sale of shares and shares in the authorized capital received by the project company.;

"railway infrastructure" - access railway tracks from the plant's territory to Zhanatas station (Zhambyl region of the Republic of Kazakhstan) with the possibility of their reconstruction into mainline railway tracks, as well as receiving and sending railway tracks at an industrial station, the construction of which will be carried out by the design company;

The plant is a production facility located 14 (fourteen) kilometers from Zhanatas, Zhambyl region of the Republic of Kazakhstan for the production of mineral fertilizers and related industrial products, provided for in the design documentation and under construction by a design company with the involvement of contractors and subcontractors.;

"legislation of the Republic of Kazakhstan" means any regulatory legal acts that are legally binding on the territory of the Republic of Kazakhstan and represent the full legal regime of the Republic of Kazakhstan, including all international treaties to which the Republic of Kazakhstan is a party, as well as all domestic resolutions, laws and decrees on the ratification or enforcement of such international treaties;

"foreign currency" is the currency of any state other than the Republic of Kazakhstan, including international monetary and settlement units.;

"foreign employee" is an individual who is not a citizen of the Republic of Kazakhstan, who the project company, its affiliates and (or) their contractors and (or) subcontractors plan to engage in employment in the Zhambyl and (or) Turkestan regions of the Republic of Kazakhstan, and (or) in Almaty, the Republic of Kazakhstan, if necessary subject to the indication of such an individual in the list provided for in paragraph 3 of Article 3 of this Agreement.;

"local staffing" - in relation to a Kazakhstani legal entity, the percentage of the number of employees of a legal entity who are citizens of the Republic of Kazakhstan in the total number of employees of such a legal entity;

"tax" is a mandatory monetary payment to the budget unilaterally established by the Republic of Kazakhstan, with the exception of cases provided for by the tax legislation of the Republic of Kazakhstan, made in certain amounts, irrevocable and gratuitous.;

"value added tax" is a value added tax in accordance with the definition established by the legislation of the Republic of Kazakhstan.;

"bypass highway" is a section of the Zhanatas-Shymkent bypass highway with a length of about 6.5 (six point five) kilometers, planned for construction in the plant area.;

"infrastructure facility" - an object intended for the maintenance of the plant, ensuring the social needs of the staff of the project company, the subsoil user and their affiliated persons in the area of the project, including, but not limited to, the facilities provided for in paragraphs 1 and 2 of Article 8 of this Agreement.;

"organization" means any legal entity, as well as an entity that does not have the status of a legal entity, including any joint venture, enterprise, association or trust, regardless of whether they are public or private, established or organized in accordance with the laws of any State or in accordance with a written agreement concluded between two or more by several persons;

"contractor" means any person who has entered into an agreement with the project company or its affiliated company, in the interests of the project company or its affiliated company, to supply goods, works, services or technologies related to the construction or operation of the plant, as well as any legal successors or eligible assignees of such person (the concept does not include natural persons acting as employees of any other person);

"supplier" means the national operator of the Republic of Kazakhstan in the field of gas and gas supply or, in the absence of such an operator, another organization that the Kazakh Side will designate as a gas supplier to the project company (as provided for in paragraph 3 of Article 8 of this Agreement).;

"project" - the construction of the plant provided for in the project documentation, ending on the date of completion of construction, as well as the operation of the plant;

"project company" is a legal entity acting as the main person implementing the project, which is the limited Liability partnership EuroChem-Karatau (business identification number 130640023294);

"project agreements" means all or any of the investment agreements concluded between a government agency or a government organization and a project company, a subsurface user or their affiliates, as well as, without limitation, the supply agreement provided for in subparagraph "a" of paragraph 3 of Article 8 of this Agreement, agreements on the supply of electricity, as well as other agreements concluded for for the purposes of the project, including any agreements concluded for the purpose of fulfilling this Agreement;

"project documentation" means any drawings, designs, drawings, sketches, calculations, measurements, descriptions, presentations, design assignments, project documentation and other documents prepared in accordance with the legislation of the Republic of Kazakhstan by the project company or at the direction of the project company for construction or operation purposes, as well as those required by the legislation of the Republic of Kazakhstan. due diligence, taking into account possible extension, updating, replacement, amendments or other changes in accordance with the terms of the specified documents;

"work permit" is a permit to attract foreign labor and (or) any other documents necessary and sufficient to attract a foreign employee, an employee in the territory of the relevant administrative-territorial units of the Republic of Kazakhstan.;

"project implementation area" - Sarysu district of Zhambyl region of the Republic of Kazakhstan;

"gas transportation and storage costs" - the purchase price of gas transportation services through gas pipelines, as well as the purchase price of gas storage services;

"construction" - in relation to the plant and (or) any part of it, any activity related (directly or indirectly) to the assessment, development, design, construction, erection, construction and implementation of installation and (or) repair work, regardless of whether such activities are carried out on the territory of the Republic of Kazakhstan or abroad, and assuming that such activities were initiated prior to the date of entry into force of this Agreement and will continue until the date of completion of construction;

"subcontractor" means any person who has entered into an agreement (agreements) with all or several contractors or any of them and supplies, performs and/or provides (directly or indirectly) to all or several contractors or any of them goods, works, services or technologies related to the plant, as well as any legal successors or eligible assignees of such person (the concept does not include individuals acting as employees of any other person);

"customs list" - the list of goods, raw materials, materials, equipment and (or) components or spare parts for equipment necessary for the purposes of the project, the import of which is subject to exemption from customs duties (as provided for in paragraph 1 of Article 7 of this Agreement), as well as the list of persons receiving such exemption from customs duties, agreed in the relevant part in accordance with the requirements of the law of the Eurasian Economic Union and approved in accordance with the procedure provided for in paragraph Article 7 of this Agreement;

"goods" means any property, including sources of information, technologies, securities and (or) currency valuables, traveler's checks, electrical, thermal and other energy and vehicles, technological equipment, components and spare parts for it, raw materials and materials, as well as other movable things equated to immovable property. property in accordance with the legislation of the Republic of Kazakhstan;

The connection point is an automatic gas distribution station, the construction and connection of which to the main gas pipeline will be provided by the Kazakh Side.;

"authorized body in the field of gas and gas supply" is a state body of the Republic of Kazakhstan, which is the authorized body of the Republic of Kazakhstan in the field of gas and gas supply;

"authorized body for employment" is a state body of the Republic of Kazakhstan authorized to issue work permits in accordance with the legislation of the Republic of Kazakhstan.;

"authorized body for investments" is a state body of the Republic of Kazakhstan, which is the authorized body of the Republic of Kazakhstan for investments;

"authorized body in the field of industry" is a state body of the Republic of Kazakhstan, which is the authorized body of the Republic of Kazakhstan in the field of industry and industrial innovation development;

"operation" - management, insurance, ownership, operation of the plant and (or) any part of it, repair, replacement of equipment, re-equipment, production or maintenance, expansion of the plant and (or) any part of it, extension and protection, as well as other actions related to these actions, for one or another time period;

"Expropriation" means expropriation, nationalization, requisition, or other measures that have commercial, economic, or legal consequences such as expropriation, nationalization, or requisition.

Article 2 Main forecast parameters of the project

The main forecast parameters of the project are:

(a) construction of a plant in the Zhambyl region of the Republic of Kazakhstan for the production of mineral fertilizers and related industrial products with a capacity of at least 1 (one) million tons per year;

(b) ensuring the possibility of creating at least 1,200 (one thousand two hundred) new jobs in the project implementation region during the operation of the plant in the chemical complex and related industries;

(c) the involvement of mainly citizens of the Republic of Kazakhstan by the project company for the purposes of the project implementation;

(d) ensuring at least 80% (eighty percent) of the local staff in the total number of employees of the project company after the expiration of the period provided for in paragraph 1 of Article 3 of this Agreement;

(e) the estimated construction period is 2019 - 2024;

(f) the estimated period of operation of the plant is at least 50 (fifty) years;

(g) the implementation of the project by designated legal entities registered in the territory of the Republic of Kazakhstan, more than 50 percent of the shares or participation interests in which (directly or indirectly) belong to the Russian Joint Stock Company EuroChem Mineral and Chemical Company (hereinafter referred to as the investor), including the project company and the limited liability partnership EuroChem -Fertilizers" (business identification number 080740015611) (hereinafter referred to as the subsurface user);

(h) the total planned amount of investments expected to be made by the investor in activities in the Republic of Kazakhstan, including the implementation of the project, in the amount of more than 1 (one) billion US dollars;

(i) the maximum possible use of Russian-made technologies, materials, equipment and products, as well as the involvement of Russian research, design and construction organizations for the implementation of the project.

Article 3 Issues of hiring and attracting foreign workers

1. The project company, its affiliated companies, as well as their contractors and subcontractors are allowed to attract and (or) hire foreign workers under work permits issued in accordance with the procedure established by this article and the legislation of the Republic of Kazakhstan, starting from the date of entry into force of this Agreement until the expiration date of 1 (one) year after the date of completion of construction, taking into account the specifics provided for in this article.

2. Foreign workers are employed by the project company, its affiliates, as well as their contractors and subcontractors as employees of the first, second, third and fourth categories (as provided for by the legislation of the Republic of Kazakhstan) in the Zhambyl and (or) Turkestan regions of the Republic of Kazakhstan, as well as in Almaty, the Republic of Kazakhstan.

3. For the purposes of implementing this article, the project company sends to the authorized employment agency a list of foreign employees (indicating the surname, first name, patronymic (if any) and positions), as well as the persons who involve them.

4. The Kazakh Side shall ensure that work permits for the purposes of employing foreign workers in accordance with paragraph 1 of this Article are issued and extended by the authorized employment agency in each case of an application from the project company, as well as its affiliates, contractors and subcontractors included in the list provided for in paragraph of this article. Work permits are issued within 11 (eleven) business days from the date of application, respectively, to the project company, its affiliates, as well as their contractors and subcontractors. The validity period of work permits is at least one (1) year from the date of issue of work permits. The issued work permit grants the relevant foreign employee the right to work in the territory of the administrative-territorial units of the Republic of Kazakhstan specified in the application for a work permit in accordance with subparagraph "e" of paragraph 6 of this article.

5. In order to obtain work permits for foreign workers, the following documents must be submitted to the authorized employment agency:

(a) a written cover letter (in any free form) from the project company and/or its affiliates, as well as the documents specified in paragraph 8 of this article, which may be submitted by the project company and/or its affiliates, as well as their respective contractors and subcontractors;

(b) a written application (in any free form) from the project company, its affiliated company and/or their contractors and subcontractors for a work permit to attract foreign workers, addressed to the authorized employment agency.

6. The application specified in subparagraph "b" of paragraph 5 of this Article must contain the following information related to the foreign employee:

(a) last name, first name, patronymic (if any);

(b) Citizenship;

(d) the name of the organization (the project company, or its affiliated company, or their respective contractors and subcontractors) that will act as the employer of the foreign employee;

(e) the name of the administrative-territorial units in which the foreign employee will work, from among the administrative-territorial units in accordance with paragraph 2 of this section;

(f) the duration of the employment contract with the foreign employee in respect of whom the application has been submitted (the contract may also be without specifying a specific period).

7. The application specified in subparagraph "b" of paragraph 5 of this article contains confirmation that the relevant foreign employee in respect of whom such an application has been submitted is a foreign employee and is involved for the purposes of the project.

8. The application specified in subparagraph "b" of paragraph 5 of this Article shall be accompanied by the following documents:

(a) a copy of the passport of the relevant foreign employee, certified by the project company and/or its affiliated company and/or their contractor or subcontractor;

(b) a copy of the document on education and/or qualifications, on training received by such a foreign employee or a resume describing the knowledge, qualifications and work experience of such a foreign employee for the purposes of carrying out the necessary activities.

9. Within the framework of the application of this article, the documents and information specified in paragraphs 5-8 of this Article in the territory of the Republic of Kazakhstan do not require notarization, apostillation or any other certification.

10. No additional proof of qualifications or documents or information other than those specified in Article 3 of this Agreement should be required during the issuance of work permits under this Article.

11. The Kazakh Side guarantees that the procedure for attracting foreign workers in the part provided for in this article will not be changed during the entire period specified in paragraph 1 of this Article.

12. After the expiration of the period provided for in paragraph 1 of this article, the local staffing in the total number of employees of the project company will be at least 80 (eighty) percent.

13. The Kazakh Side will provide the project company, its affiliates, as well as their contractors and subcontractors with support in the process of obtaining work permits to hire foreign workers, as well as appoint 1 (one) authorized contact person within 20 (twenty) business days from the date of entry into force of this Agreement in order to speed up the process of reviewing and issuing documentation..

14. The project company is responsible for ensuring equal pay for equal work of its employees without any discrimination.

Article 4 Visa support for foreign workers

1. For the period of construction and operation, the Kazakh Side ensures the issuance of visas for foreign workers employed for construction and/or operation purposes, as well as for the spouse and children of any foreign employee.

2. For the purposes of fulfilling paragraph 1 of this Article, for the period of construction and operation, the Kazakh Side shall ensure that all necessary measures are taken to expedite the consideration of applications for obtaining and issuing visas for persons specified in paragraph 1 of this Article, as well as the satisfaction of such applications and the issuance of appropriate visas to these persons for a period not less than the period of the relevant work permit to attract foreign labor force. At the same time, the total period of consideration of applications and documents from the relevant inviting parties and incoming persons does not exceed 5 (five) working days, unless a longer period is provided for by the requirements of the legislation of the Republic of Kazakhstan in terms of national security.

3. If, after the date of entry into force of this Agreement, the provisions of the legislation of the Republic of Kazakhstan come into force that improve the conditions for the persons referred to in paragraph 1 of this Article regarding the consideration of applications for obtaining and issuing visas, the provisions improving such conditions shall apply to them.

4. Pursuant to the provisions of paragraph 2 of this Article, the Kazakh Side appoints one authorized contact person in order to speed up and ensure the expedited review of applications for obtaining and issuing visas for foreign workers.

Article 5 Legislation of the Republic of Kazakhstan, amendments and additions

1. The Kazakh Side confirms that:

(a) during construction, the project company and its selected contractors may subcontract up to 100 (one hundred) percent of the works and/or services related to construction.;

(b) the project company remains the sole owner of any facilities and structures (both completed and unfinished) that were built or erected during construction.

2. No change in the legislation of the Republic of Kazakhstan shall apply to the project company or the project and shall not affect the fulfillment of obligations under this Agreement, project agreements and the legislation of the Republic of Kazakhstan, unless otherwise specifically agreed by the project company and the investor, except as provided for in subparagraph "b" of paragraph 3 of Article 6 of this Agreement. In the event of a conflict (at present or in the future) between the legislation of the Republic of Kazakhstan and the terms of this Agreement, this Agreement shall prevail, while the provisions of the legislation of the Republic of Kazakhstan that contradict the terms and conditions of this Agreement shall not apply to the project and the project company.

3. The provisions of paragraph 2 of this Article shall apply only in cases where a corresponding change in the legislation of the Republic of Kazakhstan worsens the situation of the project company or negatively affects the economic performance of the project and is not directly caused by a change in the law of the Eurasian Economic Union. The provisions of this Agreement do not impose on the Republic of Kazakhstan any additional obligations to comply with the norms of other international agreements.

Article 6 Taxes and mandatory payments to the budget

1. The Kazakh Side provides the project company with the following tax benefits:

(a) Exemption from corporate income tax:

The project company is exempt from corporate income tax, calculated in accordance with the tax legislation of the Republic of Kazakhstan, on income from the project. To apply this subparagraph, the project company will maintain separate tax records of taxable items and (or) tax-related items in order to calculate tax obligations for the production and sale of the plant's products. At the same time, separate tax accounting is conducted for each fixed asset within the plant in accordance with the tax accounting policy.;

The period of application of the provisions of the second subparagraph "a" of this paragraph begins on January 1 of the year in which the first stage of the plant was commissioned (as provided for in the design documentation) and ends after 10 (ten) consecutive years, which are calculated starting from January 1 of the year following the year in which the plant was commissioned. commissioning of the plant in full (as stipulated in the project documentation).

(b) exemption from value added tax on imports:

the import of any goods carried out by the project company, its affiliated companies, as well as their contractors and subcontractors (upon written request of the project company) is exempt from value-added tax, provided that the imported goods, as well as the relevant taxpayers of value-added tax on imports, are included in the list specified in the fifth paragraph of subparagraph "b" of this point;

exemption from value added tax on the import of goods to persons provided for in the second paragraph of subparagraph "b" of this paragraph is granted starting from the 1st day of the month in which this Agreement is concluded, for a period until the plant is put into operation in full. Regarding the import of potassium chloride by the project company, this exemption applies starting from the 1st day of the month in which the first stage of the plant will be commissioned, and ends after 10 (ten) consecutive years from the beginning of the year following the year of commissioning of the first stage of the plant.;

The exemption from value added tax provided for in the second paragraph of subparagraph "b" of this paragraph does not apply to imports of goods that have not been used for project implementation purposes for 5 (five) years.;

In order to implement the provisions of the second paragraph of subparagraph "b" of this paragraph, the Kazakh Side shall ensure, within the time limits established by this Agreement, the approval of the list of goods required for the purposes of the project, as well as persons who are entitled to use the benefits provided for in subparagraph "b" of this paragraph. The specified list is approved in the following order (the specified order is also used if necessary to make changes and additions to the list):

The project company, based on the project documentation that has passed a positive examination, as well as taking into account the contractors and subcontractors involved by it and its affiliated companies, sends the draft list to the authorized body in the field of industry.;

The authorized body in the field of industry approves the specified list within 30 (thirty) working days from the date of its receipt and ensures that its relevant territorial divisions are familiar with it.;

The central state body of the Republic of Kazakhstan, which is the authorized body in the field of state revenue of the Republic of Kazakhstan, ensures the application of exemption from value-added tax on imports by its relevant territorial divisions according to the list approved in accordance with the procedure provided for in paragraphs five to seven of subparagraph "b" of this paragraph.

the project company, as well as its affiliates:

when calculating the land tax on land plots used for the implementation of the project, a coefficient equal to 0 (zero) is applied to the corresponding land tax rates;

A rate of 0 (zero) is applied when calculating fees for the use of land used in connection with the implementation of the project and (or) operation of the plant.;

the property tax is calculated at the rate of 0 (zero) percent of the tax base for the property that is part of the plant;

The provisions of paragraphs two to five of subparagraph "b" of this paragraph shall begin to apply from January 1 of the year in which the first stage of the plant will be put into operation, and shall cease to apply after 10 (ten) consecutive years.

2. Ensuring compliance with the terms of this Agreement.

The Kazakh Side will take all necessary measures to ensure that the project company and its affiliates, as well as their contractors and subcontractors, can fully benefit from all tax benefits provided for in this Agreement and other agreements concluded on its basis and for its implementation, including project agreements, from the effective date of this Agreement.

3. Ensuring the stability of the tax regime:

(a) this Agreement provides for tax benefits to which the Kazakh Side guarantees stability. The benefits provided for in this Agreement may not be affected by any legislation of the Republic of Kazakhstan and (or) additions or amendments thereto, as well as international treaties of the Republic of Kazakhstan regulating tax issues, except in cases where the legislation of the Republic of Kazakhstan and (or) international treaties establish conditions that improve the position of the project company on compared to the terms stipulated in this Agreement. The guarantee of stability of tax benefits cannot be canceled or revoked by the Government of the Republic of Kazakhstan during the entire term of this Agreement.;

(b) taxes and other mandatory payments, with the exception of customs duties and charges directly provided for by the legislation of the Eurasian Economic Union, provided for by the legislation of the Republic of Kazakhstan in force on the date of entry into force of this Agreement, and not explicitly specified in this Agreement, shall be paid in accordance with the legislation of the Republic of Kazakhstan in force at the time of the relevant obligation to payment. Despite any provisions of this Agreement, the project company is not obligated to pay any taxes and (or) other mandatory payments, with the exception of customs duties directly provided for by the legislation of the Eurasian Economic Union, introduced by the legislation of the Republic of Kazakhstan after the date of entry into force of this Agreement for 15 (fifteen) years.

4. The project company and its affiliated companies are not responsible for violations of the legislation of the Republic of Kazakhstan committed by contractors and (or) subcontractors.

5. The benefits, preferences and other support measures provided for in this Agreement are provided independently and in addition to the benefits, preferences and support measures provided for by the legislation of the Republic of Kazakhstan. If any provisions on benefits, preferences and support measures provided for in this Agreement contradict the provisions of the legislation of the Republic of Kazakhstan, the provisions of this Agreement shall take precedence over the provisions of the legislation of the Republic of Kazakhstan.

Article 7 Customs duties

1. The Kazakh Side ensures, taking into account the requirements of the law of the Eurasian Economic Union, exemption from customs duties on the basis of an investment contract in respect of imports of any goods (in terms of technological equipment, components and spare parts for it) carried out by the project company, its affiliated companies, as well as their contractors and subcontractors (upon written request of the project company). for the purposes of the project implementation (investment contract). Such exemption is granted provided that the imported goods, as well as the relevant payers of customs duties on imports, are included in the list of goods required for the purposes of the project, as well as persons who are entitled to use the benefits (customs list), agreed in accordance with the requirements of the law of the Eurasian Economic Union (if applicable) and approved in accordance with in accordance with the procedure provided for in paragraph 2 of this article.

The Customs list from the date of its approval (taking into account possible changes or additions to it) is considered as an annex to the investment contract.

2. In order to implement the provisions of paragraph 1 of this Article, the Kazakh Side shall ensure the approval of the customs list within the time limits established by this Agreement. The customs list is approved in the following order (the specified order is also used when it is necessary to make changes and additions to the customs list):

(a) the project company, based on the project documentation that has passed a positive examination, as well as taking into account the contractors and subcontractors involved by it and its affiliated companies, sends the draft customs list to the authorized investment authority;

(b) the authorized investment body shall, within 10 (ten) business days, submit recommendations to the project company regarding the exclusion of certain items from the draft customs list.;

(c) the project company submits to the authorized investment body a draft customs list signed on its part, which may take into account the recommendations specified in subparagraph (b) of this paragraph.;

(d) the authorized investment body, in accordance with the requirements of the law of the Eurasian Economic Union (if applicable), ensures that the draft customs list is submitted for approval with the relevant authorities of the Eurasian Economic Union no later than 10 (ten) business days after the date of its receipt. The authorized investment authority will also make every possible effort to coordinate the customs list with such authorities as soon as possible and as fully as possible.;

(e) the authorized investment body shall approve the customs list submitted by the project company in accordance with subparagraph (b) of this paragraph, subject to amendments made in the framework of obtaining approval of the customs list in accordance with subparagraph (d) of this paragraph, within 10 (ten) calendar days from the date of its receipt from the project company and, where applicable, obtaining approval in accordance with subparagraph "d" of this paragraph.

3. After the conclusion of the investment contract with the project company specified in paragraph 1 of this Article, the inclusion of the goods, as well as the relevant payer of customs duties in the approved customs list, will in all cases be sufficient and exhaustive grounds for the application of exemption from customs duties provided for in this Article.

4. The reports submitted by the project company regarding the import of goods according to the approved customs list should, where applicable, cover the import of goods carried out in accordance with paragraph 1 of this article.

5. In case of violation by the persons specified in paragraph 1 of this Article of the conditions and requirements for which exemption from customs duties has been granted, the project company will be jointly and severally liable to pay customs duties on importation of goods in accordance with the approved customs list.

The Kazakh Side shall ensure the conclusion of the investment contract provided for in paragraph 1 of this Article no later than 60 (sixty) calendar days after the date of entry into force of this Agreement.

6. The exemption from customs duties provided for in paragraph 1 of this Article must be granted from the date of conclusion of the investment contract provided for in paragraph 1 of this article for a period of at least 10 (ten) consecutive years.

7. The project company is responsible for non-fulfillment or improper fulfillment of the terms of the investment contract specified in paragraph 1 of this Article by affiliated persons, as well as their contractors and (or) subcontractors.

8. The provisions of this Article shall be enforced by the Government of the Republic of Kazakhstan within the limits permitted by the law of the Eurasian Economic Union.

Article 8 Additional measures of state support for the project

1. Construction of a bypass highway:

(a) The Kazakh Side ensures the construction and commissioning of the bypass highway no later than June 30, 2021. For the purposes of the specified construction, the design company ensures the transfer to the Kazakh Side, represented by the relevant authorized state body, of the design documentation developed for the bypass highway, which has been examined in accordance with the legislation of the Republic of Kazakhstan.;

(b) if the bypass road is not fully put into operation and is available for use by the public within the time period provided for in subparagraph (a) of this paragraph, the project company will be entitled to independently construct the bypass road (or the relevant part of it that is not ready for operation) as a public highway with the involvement of contractors. or subcontractors at your discretion;

(c) in the case provided for in subparagraph (b) of this paragraph, the Kazakh Side, upon receipt of the relevant applications, shall ensure as soon as possible the submission and issuance to the project company, its contractors and subcontractors of all necessary permits and approvals for the construction of a bypass highway (or the relevant part of it that is not ready for operation), as well as the granting of appropriate rights for the land plots necessary for such construction and operation of the bypass highway. The Kazakh Side also ensures the commissioning of the bypass highway (its corresponding part) in accordance with the requirements of the legislation of the Republic of Kazakhstan.;

(d) The Kazakh Side, no later than 60 (sixty) business days after receiving from the project company an application for reimbursement of costs for the construction of a bypass highway (its relevant part), with the submission of copies of documents confirming the fact of the costs and confirmation of the commissioning of the bypass highway (its relevant part), provides monetary compensation. expressing the project company's costs for the construction of a bypass highway (its corresponding part) in full, but not more than the total cost of construction according to the design estimates that have been reviewed in accordance with the legislation of the Republic of Kazakhstan. The specified refund can be made by concluding and implementing a public procurement contract from a single source in respect of a bypass road. the road (its corresponding part) between the project company and the local executive body of the region (or other authorized state body) or in any other way agreed by the project company. At the same time, in order to conclude such a contract, the project company will not need to obtain licenses, provided that the project company engages the appropriate contractors with the necessary licenses.

2. Construction of railway infrastructure:

(a) The Kazakh Side, no later than June 30, 2021, ensures the construction and, in appropriate part, reconstruction of the railway infrastructure for the purpose of ensuring the uninterrupted operation of the plant, or the provision of the specified infrastructure to the project company for the purpose of project implementation. For the purposes of this construction, the project company provides for the development and transfer to the Kazakh Side, represented by the relevant authorized state body, project documentation for the construction and, in the relevant part, reconstruction of the railway infrastructure, which has been reviewed in accordance with the legislation of the Republic of Kazakhstan.;

(b) if the railway infrastructure is not available for operation by the project company before the date specified in subparagraph (a) of this paragraph, the project company will be entitled to independently carry out the construction and reconstruction of the railway infrastructure (or the relevant part of it that is not ready for operation) with the involvement of contractors or subcontractors at its discretion.;

(c) in the case provided for in subparagraph (b) of this paragraph, the Kazakh Side, upon receipt of the relevant applications, shall ensure that all necessary permits and approvals for the construction of such a mainline railway track and (or) railway station are submitted and issued to the project company and its contractors and subcontractors as soon as possible. The Kazakh Side also ensures the commissioning of the railway infrastructure (its corresponding part), the construction of which in this case will be carried out by the project company in accordance with the requirements of the legislation of the Republic of Kazakhstan.;

(d) the project company has the right to independently construct an industrial railway station for the use of railway infrastructure, the location of which will be determined by the project company based on the best efficiency for the project. Upon receipt of the relevant applications, the Kazakh Side ensures that all necessary permits and approvals for the construction of an industrial railway station for the purposes of the project are submitted and issued to the project company and its contractors and subcontractors as soon as possible. The Kazakh Side also ensures the commissioning of the railway station for the purposes of the project in accordance with the requirements of the legislation of the Republic of Kazakhstan.;

(e) The Kazakh Side, no later than 60 working days after receiving an application for reimbursement of design and construction costs, as well as for the reconstruction of the railway infrastructure (its relevant part) from the project company, with the submission of copies of documents confirming the costs and confirmation of the commissioning of the railway infrastructure (its relevant part), ensures reimbursement expenses of the project company for design and construction, as well as for the reconstruction of the railway infrastructure (its corresponding part) in full, but not more than the total cost of construction, according to the design and estimate documentation that has been reviewed in accordance with the legislation of the Republic of Kazakhstan. The specified refund may be made by concluding and implementing a single-source public procurement contract for the railway infrastructure (its relevant part) between the project company and the local executive body of the region (or another authorized state body) or in another way agreed upon by the project company. At the same time, in order to conclude such a contract, the project company will not need to obtain licenses, provided that the project company attracts the appropriate contractors with the necessary licenses.;

(e) The Kazakh Side ensures the provision of appropriate rights to land plots for the construction and further uninterrupted operation of the railway infrastructure, as well as the industrial railway station specified in subparagraph (d) of this paragraph.

3. Provision of gas supply:

(a) The Kazakh Side, within 3 (three) months from the date of entry into force of this Agreement, ensures that the supplier enters into a long-term wholesale gas supply agreement with the project company for the purpose of ensuring the operation of the plant. The supply agreement will provide for uninterrupted supply of gas from the supplier to the project company for 10 (ten) years from the date of commissioning of the first stage of the plant in the amount of up to 200 (two hundred) million cubic meters per year. The quality of the supplied gas must comply with the requirements of GOST 5542-2014. At the same time, the project company will notify the supplier of the need to start deliveries no later than 6 (six) months before the date of commissioning of the first stage of the plant.;

(b) The Kazakh Side ensures that the project company is provided with a price for the supplied gas, approved by the authorized body in the field of gas and gas supply, which does not exceed the annual price based on the following indicators:

weighted average purchase price by a gas supplier for the Zhambyl region of the Republic of Kazakhstan;

the supplier's margin of return in the amount of 7 (seven) percent of the weighted average price specified in the second paragraph of subparagraph "b" of this paragraph;

weighted average natural gas transportation and storage costs incurred by the supplier for the supply of natural gas to the Zhambyl region of the Republic of Kazakhstan;

(c) The Kazakh Side shall ensure that for the period specified in subparagraph (a) of this paragraph, no other conditions or circumstances (including, but not limited to, an increase or decrease in the actual volume of investments, costs of raw materials, resources and final products, as well as operating and other expenses) are grounds for a change the pricing procedure specified in subparagraph "b" of this paragraph;

(d) for the purposes of purchasing gas under the agreement provided for in subparagraph (a) of this paragraph, the Kazakh Side ensures that the project company is granted the status of a gas distribution organization in accordance with the legislation of the Republic of Kazakhstan. At the same time, obtaining such status does not impose on the project company any obligations to third parties to ensure gas supply or provide access to its gas pipeline or gas distribution system, or other obligations, except in cases where the project company assumes such obligations by concluding a contract.;

(e) The Kazakh Side ensures the construction of the connection point and the provision of access to it to the project company for the purpose of gas supply under the contract provided for in subparagraph (a) of this paragraph.;

(f) Upon receipt of the relevant applications, the Kazakh Side ensures that all necessary permits and approvals for the construction of the gas pipeline are submitted and issued to the project company, its contractors and subcontractors as soon as possible, as well as the granting of appropriate rights to the land plots necessary for such construction and operation of the gas pipeline. The Kazakh Side also ensures the approval of all necessary documents for the purposes of putting the gas pipeline into operation and connecting the specified gas pipeline to the connection point.

4. Power supply - The Kazakh Side ensures the provision of electric energy to the project company from the Shulba and Ust-Kamenogorsk hydroelectric power plants with an average hourly load of no more than 15 (fifteen) megawatts for 10 (ten) years from the date of commissioning of the first stage of the plant at tariffs approved in accordance with the legislation of the Republic of Kazakhstan for these hydroelectric power plants.

5. Subsidizing certain costs of the plant - Within 10 (ten) years after the commissioning of the first stage of the plant, the Kazakh Side provides subsidization of 50 (fifty) percent of the project company's expenses for the mainline railway network, locomotive traction, and freight and commercial work. At the same time, the annual amount of subsidizing such expenses is not more than 1,200,000,000 (one billion two hundred million) tenge, with the application of the inflation coefficient established by the authorized state body of the Republic of Kazakhstan to this amount.

6. Granting of rights to land plots - The Kazakh Side ensures that the project company and (or) other persons are granted land use rights to land plots for the construction and operation of infrastructure facilities related to the implementation of the project for a period of at least 49 (forty-nine) years at the request of the project company. At the same time, in the course of granting this right, state bodies are guided by the procedural norms provided for by the legislation of the Republic of Kazakhstan.

7. Granting of subsurface use rights - in accordance with the procedure established by the legislation of the Republic of Kazakhstan, the subsurface user and the project company will be granted the right of subsurface use to explore and extract minerals necessary to provide the plant with raw materials, taking into account the possible expansion of the plant's capacity in areas that comply with the requirements of the Code of the Republic of Kazakhstan "On Subsurface and Subsurface Use".

8. Providing support and assistance - upon the request of the project company, the Kazakh Side undertakes to provide full assistance to the project company in dealing with any tax and customs issues and provides a single contact person in order to facilitate and speed up the processing and submission of official documentation.

Article 9 Cooperation on the development of the project area

1. In order to maximize the development of the project area, the Kazakh Side, within the framework of the legislation of the Republic of Kazakhstan, ensures the proper socio-economic development of the project area and support for local small and medium-sized businesses, including by allocating funds for the development of the social infrastructure of Zhanatas, as well as by providing concessional financing from existing financial institutions to support entrepreneurship.

2. Taking into account the importance of creating places for temporary residence of representatives of the project company, its affiliates, contractors and subcontractors, the Kazakh Side, within the framework of the legislation of the Republic of Kazakhstan, assists a local small business entity in obtaining preferential financing for the construction of a hotel in Zhanatas with 50 (fifty) beds or more.

3. Contributions for the socio-economic development of the region and the development of its infrastructure made by the project company or its affiliates to the budget of the local executive body within the framework of relevant contracts and (or) licenses for the right of subsurface use must be used in full for the implementation of the program of socio-economic development of Zhanatas, agreed with the project company and approved by local executive authorities.

Article 10 Expropriation

1. The Kazakh Side ensures that all necessary measures are taken to ensure that any investments of the investor, the project company and (or) their affiliates in the territory of the Republic of Kazakhstan are not expropriated, except in cases where such measures are taken in the public interest in accordance with the procedure established by the legislation of the Republic of Kazakhstan, without discrimination, with immediate, adequate payment, proper and effective compensation.

2. Compensation must be equal to the fair market value of the expropriated investments immediately prior to the date when the impending expropriation became known to the project company and (or) its affiliates, as well as the amount of losses to the project company if, as a result of such expropriation, the economic benefits of operating the plant decrease or such operation becomes impossible. The fair market value should be determined in accordance with generally accepted valuation principles.

3. Compensation must be fully realizable and freely transferable in a freely convertible currency and must be carried out without any restrictions or delay. Compensation must include interest corresponding to the effective rate established on market conditions in respect of the payment currency, starting from the date of expropriation and up to the actual payment date.

4. The provisions of paragraphs 1 and 2 of this article shall also apply to expropriated income from investments and, in the event of liquidation of the project company or its affiliated persons, to proceeds from liquidation.

5. The investor, the project company and (or) their affiliates, whose investments have been expropriated, have the right to have their case immediately reviewed and the value of their investments immediately determined by the relevant judicial or other competent authorities of the Republic of Kazakhstan in accordance with the provisions set out in this article.

Article 11 Compensation of losses

1. To the investor, the project company and (or) their affiliated persons, whose investments in the territory of the Republic of Kazakhstan have suffered losses as a result of war or other armed conflicts, rebellion, rebellion, rebellion, acts of disobedience, civil unrest, cases of declaring a general emergency in the territory of the Republic of Kazakhstan, the Kazakh Side provides in respect of restitution, compensation, compensation or another settlement is the best regime.

2. The Kazakh Side provides restitution or compensation, which in any case must be immediate, adequate and effective, to the investor, the project company and (or) their affiliates, who in any of the cases referred to in paragraph 1 of this Article, incur losses as a result of:

confiscation of their investments or part of their investments by the armed forces or the authorities of the Republic of Kazakhstan;

the destruction of their investments or part of their investments by the armed forces or the authorities of the Republic of Kazakhstan, which was not required by the necessity of the situation.

In this case, compensation must be carried out in accordance with paragraphs 1 to 3 of Article 10 of this Agreement starting from the date of confiscation or destruction of investments until the date of actual payment.

Article 12 Free transfer of payments related to investments

1. The Kazakh Side guarantees to the investor, the project company and (or) their affiliates that all transfers and payments of funds to and from the Republic of Kazakhstan related to investments are carried out freely and without restrictions, provided that the investor, the project company and (or) their affiliates comply with the legislation of the Republic of Kazakhstan.

2. The Kazakh Side guarantees that the investor, the project company and (or) their affiliated companies have the right to::

transfer funds received from the implementation of the project, including profits, from the Republic of Kazakhstan in accordance with the procedures established by the legislation of the Republic of Kazakhstan.;

to open bank accounts in local and foreign currencies both in the Republic of Kazakhstan and abroad in accordance with the procedures established by the legislation of the Republic of Kazakhstan.;

for exemption from restrictions related to payments and transfers for capital transactions;

to be exempt from restrictions related to payments and transfers for current transactions, including payments under contracts with non-residents, as well as transactions involving the payment of wages, allowances and other remuneration to foreign workers;

to buy, sell or exchange foreign currency for any other foreign currency or for the legal currency of the Republic of Kazakhstan at the free market exchange rate on the date of purchase, sale or exchange without any fees or duties, except for the usual bank charges;

make any payments under this Agreement, or under any other project agreement, contract, or similar document related to the implementation of the project;

transfer, hold and store foreign currency outside the Republic of Kazakhstan;

to make payments abroad in foreign currency to any of its affiliated companies, contractors or subcontractors established outside the Republic of Kazakhstan for goods, works, technology and services of such affiliated companies, contractors or subcontractors provided for the purposes of the project;

for exemption from compulsory conversion of foreign currency deposited in bank accounts in the Republic of Kazakhstan in accordance with any contract or agreement related to construction and operation, when such conversion is mandatory.

The rights specified in paragraph 2 of this article must be exercised in accordance with the legislation of the Republic of Kazakhstan.

3. If, in accordance with the legislation of the Republic of Kazakhstan, the permission of the National Bank of the Republic of Kazakhstan or another state body is required to exercise the rights specified in paragraph 2 of this Article, the Kazakh Side shall assist the investor, the project company and (or) their affiliates in obtaining such permission. Such permission is granted within 5 (five) business days from the date of the relevant request.

Article 13 Assurances of the Government of the Republic of Kazakhstan

The Government of the Republic of Kazakhstan ensures, in accordance with the legislation of the Republic of Kazakhstan, compliance and execution of all the terms of this Agreement by all departments of the Government of the Republic of Kazakhstan and relevant state bodies (both republican and local levels), as well as compliance and execution of instructions from persons appointed to facilitate the implementation and execution of various procedures and functions established by this Agreement.

Article 14 Assurances of the Government of the Russian Federation

The Government of the Russian Federation ensures, in accordance with the legislation of the Russian Federation, the granting of permits, approvals, and approvals that may be necessary for the successful implementation of the project.

Article 15 Disputes between the Parties

1. Disputes between the Parties regarding the interpretation and application of this Agreement shall be resolved through negotiations and consultations.

2. Nothing in this Agreement shall be interpreted as preventing the adoption or application by the Government of the Republic of Kazakhstan of the measures provided for by the legislation of the Republic of Kazakhstan as of the date of entry into force of this Agreement:

protection of national security of the Republic of Kazakhstan;

protection of environmental safety of the Republic of Kazakhstan;

protection of public order of the Republic of Kazakhstan;

protection of life or health of the population, flora and fauna of the Republic of Kazakhstan.

Article 16 Miscellaneous

1. The application of any provisions of this Agreement in the Republic of Kazakhstan does not require the adoption of any legislative acts, with the exception of the act necessary for the ratification of this Agreement, and directly grants the State bodies specified therein sufficient authority to perform the actions prescribed by this Agreement. At the same time, nothing in this Agreement can be interpreted as restricting the Parties from adopting acts for the purposes of implementing this Agreement.

2. In the event of the abolition of any state body of the Kazakh Side, which, based on this Agreement, has the right and (or) is required to perform an action, the Kazakh Side determines the state body that will be authorized to perform such action under this Agreement.

3. This Agreement shall enter into force on the date of receipt, through diplomatic channels, of the last written notification that the Parties have completed the internal procedures necessary for its entry into force.

4. This Agreement is concluded for a period of 20 (twenty) years.

5. This Agreement may be amended and supplemented by written consent of the Parties.

Done in Moscow on July 21, 2020, in two original copies, each in the Kazakh and Russian languages, both texts being equally authentic.

In case of disagreement, the text in Russian is used.

For the Government

Republic of Kazakhstan

For the Government

Of the Russian Federation

President

Republic of Kazakhstan

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