Today at the plenary session of the Senate of Kazakhastan the new law «On the National Welfare Fund» was adopted.

The new law is adopted to improve an order of interaction, and a clearer definition of the Government and the Fund powers, increasing the effectiveness of strategic planning and monitoring the key performance indicators of the Fund and its subsidiaries. The law also establishes a cooperation mechanism between the Fund and the Audit Committee to provide an inspection on the republican budget.

The bill was presented to the deputies by Deputy Minister of Economic Development and Trade Marat Kusainov.  During the speech he noted that «the bill provides a clear systematization of the Government’s functions, as a part of Executive branch of the Government and the sole shareholder. This will contribute to the  more efficient management of the Fund. At the same time the Government will still have full control over the activities of the Fund. »

Kuandyk Bishimbayev, Deputy Chairman of the Management of «Samruk-Kazyna» responded to the Deputies’ questions.  He noted, in particular, that the rule of law are based on modern principles of corporate governance that would enhance transparency of the Fund’s activities in accordance with international best practices.

«Our task is to distinguish the fields of activity of the Government and the Fund. The Fund, more importantly is a business structure,  that  interested in  increasing its profitability. The Found earns money, pays dividends to the Government and the Government directs these funds to address and tackle social and other problems », - said K. Bishimbayev.

The growing competition within the  The Customs Union (CU) and Common Economic Space , requires greater flexibility and mobility from the Fund’s companies, in order to respond to the changing market conjuncture, including the procurement activities. The Law provides the Fund’s withdrawal from the Model Law on Procurement, which is approved by the Government. According to the law, the changes will simplify  the  procurement rules, that will allow spend less time on procedural matters.

At the same time, strict control over the procurement process remains; it will be based on procurement rules approved by the Board of Directors of the Fund, which is chaired by the Prime Minister of Kazakhstan and the heads of field - specific ministries. This kind of mechanism would protect the State’s (the issues of control, support for domestic suppliers of goods and services, etc.), and therefore would increase the market mobility of the companies.

The law is meant to include a representative of the Audit Committee of the Specialized Committee of the Board of Directors of the Fund, in which representatives of other state regulatory and law enforcement agencies will be included. This will ensure the control not only over governmental but over business assets (commercial income) as well, of any of the Fund’s companies. At the same time, the Fund’s finances allocated by the State’s national budget will be checked by the Accounts Committee in accordance with the existing Budget Code order.

Next Law adopted at the meeting of the Senate is the Law «On introducing  on Introduction of Changes and Addenda to the to some legislative acts of the Republic of Kazakhstan on the activities of the National Welfare Fund», which allows to use the Law «On National Welfare Fund» fully.

It is necessary to remind, that the draft law «On National Welfare Fund» has been developed in accordance with the instruction of the President of the Republic of Kazakhstan Nursultan Nazarbayev, dated June 28, 2011. Conceptual approaches embodied in the administration bill,  were considered and approved by the Board of Directors of the Fund's in July 20, 2011 and by the interdepartmental commission on legislative activities in  September 12, 2011. The scientific, economic, legal, anti-corruption and linguistic reports are obtained. The bill was also examined at the enlarged meeting of the Committee on Finance and Budget Committee of the Senate in January 9, 2012