Antitrust Dispute Resolution in Kazakhstan Rustam Ilzhanov, Senior Partner Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers London, October 26, 2011

Law of the Republic of Kazakhstan On Competition Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Exterritorial effect: actions affect assets, shares/participatory interests, rights with respect to legal entities located within Kazakhstan; actions restrict competition in Kazakhstan.

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers The government authority overseeing competition in Kazakhstan is the Agency for Protection of Competition (the Antimonopoly Agency). Primary activities of the Agency : combating monopolistic practices; and supervision of economic concentration. Government Control

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Monopolistic activities: anticompetitive agreements between market entities; anticompetitive concerted practice of market entities; and abuse of a dominant or monopolistic position. Combating Monopolistic Practices

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Anticompetitive Restriction of Agreements  Competition Anticompetitive agreements include: setting up agreed prices; division of goods markets based on criteria; restriction of production or sale of goods. Anticompetitive Agreements

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Concerted Restriction of Practices  Competition Concerted practices include: setting up prices; restriction of production or sale of goods; refusal to enter into contracts with certain vendors or buyers; use of discriminating conditions in equivalent agreements. Concerted Practices

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Dominant position - share in a goods market ≥ 35%. Monopolistic position - share in a goods market = 100%. Abuse of Dominant/Monopolistic Position

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Oil products; Electricity supply; Cement wholesale; Communication services (Roaming, Internet, etc.); Agriculture. Investigations in the good markets :

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers abuse of dominant position by a leading Kazakhstan fuel and lubricants distributor (fine threatened against the client – EUR ≈58 mln.); abuse of dominant position by a mobile operator (fine threatened against the client ≈ EUR 57 mln.); abuse of dominant position by a tea supplier (fine threatened against the client – n/a); anticompetitive concerted actions of a dairy producer (fine threatened against the client – n/a); anticompetitive concerted actions by a vegetable oil producer (fine threatened against the client – n/a). Practice of Sayat Zholshy & Partners:

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Obtaining consent for economic concentration: Stage 1: verification of completeness of submitted documents – 10 calendar days; Stage 2: consideration of the application – not more than 50 calendar days. ECONOMIC CONCENTRATION Reorganization (merger or accession) ≥25% shares/ participation interests AssetsMembership in legal entity’s executive bodies 1.≥ EUR 15mln (value of assets/sales volume of group of persons of the purchaser/reorganized market entities + target); 2.Dominant or monopolistic position (one of the parties of transaction).

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Applications for Economic Concentration 2010 January – August 2011 Total Consent granted15176 Rejected13175 Pendingn/a24 No consent required313 Review of application ceased 416 Withdrawn60 Consent denied01

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Key Points while Filing Application Submission of large volume of information : production and sales volumes and exports and imports volumes to and from Kazakhstan for the previous 2 years + forecasts for the following 3 years for each market entity which is a part of the applicant's group of persons. inclusion of great number of market entities to the definition of group of persons (apart from parent companies, subsidiaries and sister companies) => information related to their ultimate individual beneficiaries, etc.

Current Issues In Kazakh Law – An Update for Foreign Investors and Their Advisers Consequences of a Failure to Obtain Consent for Economic Concentration Pursuant to the legislation : imposition of a fine (≈EUR14,000); holding of the transaction invalid. Practice: "impaired relations" with the Agency (additional future investigations by the Agency); problems and obstacles for future transactions (e.g., rejection of future applications, etc.).

Nurly Tau Business Center Block 2A, 3 rd Floor 5, Al-Farabi Ave , Republic of Kazakhstan, Tel.: Fax: