LAW OF THE REPUBLIC OF KAZAKHSTAN

of January 27, 1996 No. 2828

About subsoil and subsurface use

Chapter 1. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) investigation - works (transaction) connected with search of mineral deposits and their assessment;

2) construction and (or) operation of the underground constructions which are not connected with investigation and (or) production - works on construction and (or) operation of underground constructions for oil storage and gas, and also underground engineering constructions for burial of radioactive waste, hazardous substances and sewage;

3) geological branch - the appendix to the contract for investigation, the combined exploration and production which is integral part of the contract, determining schematically and descriptively the subsoil plot on which the subsoil user has the right to carry out investigation;

4) the coastline - the line of the coast of water object which is formed as a result of the maximum inflow (high water);

5) underground waters - the mineral which is in subsoil and used according to this Law;

6) subsoil - the part of crust located below soil layer, and in case of its absence - below the land surface and bottom of the seas, lakes, the rivers and other reservoirs, stretching to depths available to carrying out transactions on subsurface use taking into account scientific and technical progress;

7) authorized body on studying and use the nedrgosudarstvenny body performing regulation in the field of geological studying, rational and complex use of subsoil;

8) protection of subsoil - system of actions, stipulated by the legislation the Republic of Kazakhstan about the subsoil and subsurface use directed to prevention of pollution of subsoil when carrying out transactions on subsurface use and decrease in adverse effect of transactions on subsurface use on the environment;

9) the state geological studying of subsoil - works (transaction) connected with monitoring of condition of subsoil, studying of geological structure of subsoil plots, and also separate parts and all territory of the Republic of Kazakhstan in general, determination of their perspectives on availability of minerals by carrying out search and poiskovootsenochny works, creation of the state geological cards constituting information basis of subsurface use;

10) safe subsurface use - ensuring technical, ecological and sanitary and epidemiologic safety when carrying out transactions on subsurface use;

11) transactions on subsurface use - the works relating to the state geological studying of subsoil, exploration and production including the works connected with exploration and production of underground waters, therapeutic muds, investigation of subsoil for dumping of sewage and also the works on construction and (or) operation of underground constructions which are not connected with investigation and (or) production;

11-1) register of goods, the works and services used when carrying out transactions on subsurface use - the state information system intended for control and monitoring of purchases of the goods, works and services used when carrying out transactions on subsurface use and also carrying out electronic procurement and forming of the inventory, the works and services used when carrying out transactions on subsurface use;

12) the national company on subsurface use (the daleenatsionalny company) - the joint-stock company created according to the decision of the Government which single shareholder is the state or national managing holding performing activities in certain spheres of subsurface use on the conditions established by the legislation of the Republic of Kazakhstan;

13) the subsurface use right - the right of possession and use of natural resources within the contract area provided to the subsoil user according to this Law;

14) concentration of the rights to carrying out transactions in the field of subsurface use - possession of one person or group of persons from one country such share in contracts for carrying out transactions in the field of subsurface use in the territory of the Republic of Kazakhstan or such ownership ratio in the authorized capital of the organizations which is subsoil users in the Republic of Kazakhstan who are capable to create or create threat to economic interests of the Republic of Kazakhstan;

15) the subsoil user - the physical person or legal entity having according to this Law rights to carrying out transactions on subsurface use;

16) the subsoil plot - the geometrized part of subsoil allocated in the closed borders for carrying out transactions on subsurface use;

17) high technologies - the new conventional achievements in the equipment and engineering procedures which received realization in the form of the new and advanced products and the most environmentally friendly technology applied for the purpose of integration of products made in the territory of the Republic of Kazakhstan on the world market;

18) the working program - set of plans of the subsoil user for the duration of the contract in general, including actions for realization of conditions of competitive offers according to Item 5 of article 41-5 of this Law;

18-1) Kazakhstan content in work, service - cumulative total cost portion of the Kazakhstan content in the goods used in case of performance of work in the price of the agreement and (or) compensation of the workers who are citizens of the Republic of Kazakhstan in the salary fund of the producer of work, service in the contract for performance of work or rendering service, less the cost of the goods used in case of performance of work and the prices of agreements of sub contractings;

19) works - implementation on paid basis of activities for creation (production) of goods, to installation of equipment, construction of the constructions and other objects necessary as for direct use when carrying out transactions on subsurface use, and for the activities provided in the contract as accompanying;

20) the annual work program - the action plan of the subsoil user for the calendar year including amounts and the directions of development of mining operations in investigation, production and finance costs;

20-1) Kazakhstan content in personnel - quantity of the Kazakhstan personnel as a percentage to the total number of the personnel involved in case of execution of the contract with breakdown on each category of workers and employees;

21) the contract - the contract between competent authority and physical person or legal entity (faces) for carrying out investigation, production, the combined exploration and production or construction and (or) operation of the underground constructions which are not connected with investigation and (or) production constituted according to the legal acts of the Republic of Kazakhstan existing at the time of the conclusion of the contract;

22) the contract area - the territory determined by geological or mountain branch in which the subsoil user has the right to perform the operations on subsurface use corresponding to the contract;

23) concentration of the rights within the contract - the size of share of one of members of consortium in the contract signed with the Republic of Kazakhstan allowing this participant to make independently decisions on activities of the subsoil user according to the contract;

24) the field - the part of subsoil containing natural accumulation of mineral (minerals);

25) positive practice of development the mestorozhdeniyobshcheprinyaty international practice applied when carrying out transactions on subsurface use which is rational, safe, necessary and cost-efficient;

26) popular minerals - the minerals (sand, clay, gravel and others) used in their natural state or with insignificant processing and cleaning for satisfaction of generally local economic needs;

27) production of popular minerals - any production of popular minerals which is not relating to production of popular minerals for own needs;

28) production of popular minerals and underground waters for own needs - the production performed on the parcel of land which is in property or on the right of permanent or temporary land use without intention of the subsequent transactions concerning the extracted popular minerals or underground waters;

29) commercial detection - detection in the contract area of one or several fields economically suitable for production;

29-1) goods of the Kazakhstan origin - goods on which the certificate of origin for the internal address confirming its origin in the territory of the Republic of Kazakhstan is issued;

30) the Kazakhstan operator, services - residents of the Republic of Kazakhstan. Residents of the Republic of Kazakhstan the citizens of the Republic of Kazakhstan and (or) legal entities created according to the legislation of the Republic of Kazakhstan with the location on its territories, and also their branches with the location in the Republic of Kazakhstan using at least ninety five percent of citizens of the Republic of Kazakhstan in the total number of employees are recognized;

31) the Kazakhstan producer of goods - the physical and (or) legal entities of the Republic of Kazakhstan making goods of the Kazakhstan origin in the territory of the Republic of Kazakhstan;

32) it is excluded

33) authorized body in the field of protection surrounding sredytsentralny executive body of the Republic of Kazakhstan enabling the realization of state policy in the field of environmental protection and its territorial authorities;

34) competent authority - the state body determined by the Government of the Republic of Kazakhstan and acting on behalf of the Republic of Kazakhstan in implementation of the rights connected with the conclusion and execution of contracts;

35) services - implementation on paid basis of the activities necessary as for direct use when carrying out transactions on subsurface use, and for the activities provided in the contract as accompanying, not directed to creation (production) of goods or other physical items;

36) the contractor - the physical person or legal entity which signed with competent authority the contract for carrying out transactions on subsurface use;

37) mineral raw materials - the part of subsoil taken on surface (rock, ore raw materials and others) containing mineral (minerals);

38) primary conversion (enrichment) of mineral raw materials - the type of mining activities which includes collection on site, crushing or crushing, classification (sorting), briquetting, agglomeration and enrichment by physical and chemical methods (without essential change of mineral forms of minerals, their modular and phase condition, kristallo-chemical structure) and also can include the overworking technologies being special work types on mining (underground gasification and smelting, chemical and bacterial lixiviation, drazhny and hydraulic development of loose fields);

39) conversion of mineral raw materials - the works connected with extraction of mineral (minerals) from mineral raw materials;

40) the model contract - the standard contract approved by the Government of the Republic of Kazakhstan in which features of separate contract types, carrying out separate transactions on subsurface use are reflected, and used as an example in case of creation of contracts;

41) production - all complex of works (transactions) connected with extraction of minerals from subsoil on surface and also from technogenic mineral educations, including temporary storage of mineral raw materials;

42) mineral - the natural mineral education containing in subsoil in strong, liquid or gaseous state (including therapeutic muds), suitable for use in production of goods;

43) rational and complex use of minerals - cost-efficient development of all types of resources of subsoil on the basis of use of advanced technologies and positive practice of development of fields;

44) safety zone - the zone stretching from the coastline of the sea for five kilometers towards sushi in the territory of the Republic of Kazakhstan;

45) the servitude - the right of physical persons and legal entities to limited target use of part of the subsoil plot provided to other persons for carrying out investigation, production, the combined exploration and production or construction and (or) operation of the underground constructions which are not connected with investigation and (or) production in the cases provided by this Law;

46) liquidating fund - the fund created by the subsoil user for elimination of effects of transactions on subsurface use in the Republic of Kazakhstan;

47) historical costs - the total last costs incurred by the state on geological studying of the contract area and investigation of fields;

48) goods - the equipment, finished goods and other material values acquired as for direct use when carrying out transactions on subsurface use, and for the activities provided in the contract as accompanying;

48-1) Kazakhstan content in goods - percentage of cost of the used local materials and costs of the producer of goods for the conversion of goods performed in the territory of the Republic of Kazakhstan in the final cost of goods;

49) the annual program of purchase of goods, works and services - the nomenclatures and amounts of goods, works and services, methods and terms of their acquisition planned by the subsoil user;

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