Currency regulation and control in the Republic of Kazakhstan
The present currency regime of Kazakhstan is liberal and doesn’t contain any limitations on capital movement or running of commercial activities in the country.
Starting from 2002 the National Bank of Kazakhstan in cooperation with the Government of the country was implementing the policy of step by step liberalization of currency regime.
The main goal of currency exchange liberalization was complete abolition of capital movement restrictions and creation of informative statistical and analytical monitoring over currency operations as a base for making economic policy decisions.
By January 1, 2007, in accordance with the Programs of currency regime liberalization on 2003-2004 period and 2005-2007 period, the following fundamentals of absolute convertibility of national currency were implemented:
1) abolition of licensing of capital movement operations and opening of bank accounts in foreign banks,
2) removal of restrictions on internal currency market conversional operations of corporate entities,
3) implementation of new system of control of currency repatriation requirement.
Currently the goal of currency regulation in Kazakhstan is assistance to the state policy on accomplishing sustainable economic growth and ensuring economic security of the country. Respectively, the objectives of currency regulation are:
1) establishment of the procedures of circulation of currency valuables in Kazakhstan,
2) creation of conditions for further integration of Kazakhstan into the global economy
3) maintenance of database on currency operations and capital flows.
Licensing is required only for activity of organizing exchange operations with foreign currency (exchange office activity).
In order to gather statistical data about capital movement operations (financial loans, foreign direct investments, commercial credits, foreign bank accounts) there are regimes of registration and notification. Information received within the framework of these regimes is used to form statistical and analytical data of balance of payments, international investment position and gross external debt.
Registration and notification regimes cover only large capital movement operations which assume capital (goods, money) inflow exceeding an equivalent of USD 500 000, and capital (goods, money) outflow exceeding USD 100 000.
Registration regime reckons for providing the National Bank of Kazakhstan with a copy of a document (contract) on the basis and (or) in pursuance of which capital movement operations are carried out before the conduction of such operation, while notification regime calls for providing information about capital movement operation (including a copy of a contract) after the operation was conducted. Registration and notification regimes spread only on residents of Kazakhstan.
In order to ensure supply of currency on internal currency market currency legislation of Kazakhstan envisages requirement for currency repatriation, which comprises entering to Kazakhstani bank accounts of the following:
1) proceeds from exports of goods (works, services) in national and foreign currency;
2) national and foreign currency transferred by a resident to a non-resident in settlement for import of goods (works, services) in the event the non-resident fails to fulfill obligations and (or) performs them incompletely.
According to the acting legislation of Kazakhstan time period for currency repatriation is determined solely by the conditions of an external-economic contract. There are no limitations in running exports or imports transactions after the repatriation period. Currency repatriation requirement spreads only on residents of Kazakhstan (corporate entities and entrepreneurs).
Control of currency repatriation covers external trade contracts exceeding an equivalent of USD 50 000 by giving a contract an identification number in a commercial bank which services the resident-party of a contract.
However, due to existing risks of external shocks, the Law “On currency regulation and currency control” assumes the mechanism of timely reaction on threat to economic security of Kazakhstan and stability of its financial system.
Particularly, if the issue can’t be resolved by other measures of economic policy, the Law assumes the possibility to temporary implement particular currency exchange limitations in the framework of Special Currency Regime, such as:
1) requirement for allocation of non-interest deposit in Kazakhstani commercial bank or the National Bank of Kazakhstan in the amount to be defined as a share of the amount of the currency transaction for defined period,
2) requirement for obtaining the special permit of the National Bank of Kazakhstan to carry out currency transactions,
3) requirement for compulsory sale of the proceeds in foreign currency received by residents of Kazakhstan in the local market,
4) restrictions on the use of accounts in foreign banks, setting time frame on currency repatriation, establishing the limits on the volume, amount and currency of currency transactions.
Special Currency Regime may be introduced only by the President of Kazakhstan for a period not longer than 1 year after consultations with the Government and the National Bank.
To date Kazakhstan has never applied the Special Currency Regime.
Contact details of the National Bank of the Republic of Kazakhstan:
House №31, micro-district "Koktem-3"
Almaty, Kazakhstan, 050040
Fax: 8 (727) 2704-703, 8 (727) 2617-352, 8 (727) 2704-799
Call-center: 8 (727) 2704-591