1. ENFORCING CONTRACTS 1 The reforms undertaken by the Government of Kazakhstan to improve Doing Business ranking

2. ENFORCING CONTRACTS 2 Kazakhstan is on the 30th place by Enforcing Contracts among 189 economies of the whole world. According to data collected by Doing Business enforcing contracts takes 370 days, costs 22% of claim and requires 36 procedures. Enforcing Contracts – from 35 to 30 place – DB 2015: Kazakhstan made enforcing contracts easier by introducing an electronic filing system for court users.

3. ENFORCING CONTRACTS IN KAZAKHSTAN 3 IndicatorKazakhstan Time (days)370,0 Filing and service15 Trial and judgment135 Enforcement of judgment 220 Cost (% of claim)22,0 Attorney cost (% of claim)8.5 Court cost (% of claim)3.5 Enforcement Cost (% of claim)10.0 Procedures (number)36,0 Number of Procedures (without bonus points)38 Specialized commercial courts Electronic filing of court cases Total Number of Procedures (including bonus points)3636 Enforcing Contracts in DB 2015

4. ENFORCING CONTRACTS IN KAZAKHSTAN 4 ENFORCEMENT OF JUDGMENT - 220 days 33 Request to Defendant to comply voluntarily with judgment: Plaintiff, a court enforcement officer or a private bailiff requests Defendant to voluntarily comply with the judgment. 34 Identification of Defendant's assets by court official or Defendant for purposes of enforcement: The judge, a court enforcement officer, a private bailiff or the Defendant himself identifies Defendant's movable assets for the purposes of enforcing the judgment through a sale of Defendant’s assets. 35 Attachment: Defendant’s movable goods are attached (physically or by registering, marking or separating assets). 36 Valuation or appraisal of attached movable goods: The court or court-appointed valuation expert evaluates the attached goods. 37 Sale through public auction: The Defendant’s movable property is sold at public auction. 38 Distribution of proceeds: The proceeds of the public auction are distributed to Plaintiff (and, where applicable, to other creditors, according to the rules of priority). Enforcing Contracts in DB 2015

5. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 5 Reform Article 37. Adoption of a court order to proceedings 4. Enforcement agent after receipt by him of a court order, relevant to established requirements by the Law, not later than three days shall initiate enforcement proceedings, about what shall be decerned. An enforcement agent simultaneously with the initiation of enforcement proceedings sent or handed over to the debtor the offer about necessity to voluntarily comply executive document within five calendar days from receipt (excluding executive documents subject to immediate execution) and warn the debtor about enforcement of these requirements at the end of the period for voluntary compliance with the charging him executive authorization or payment to the private enforcement agent and the cost of executive actions prescribed by this Law.

6. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 6 Reform Article 44. Suspension periods of enforcement proceedings Enforcement proceedings shall be deferred in the following cases: 8) provided by subparagraph 12) of Article 42 of this Law, -– until receipt of the application from the claimant; Article 46. Reopening of enforcement proceedings Enforcement proceedings reopened after the elimination of the circumstances that caused his suspension, at the request of the claimant or on the initiative of a enforcement agent.

7. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 7 Reform Article 56. Levy execution on property of legal entity and individual entrepreneurs 1. In the absence of the debtor sums of money sufficient to pay off the debt (if there is available relevant information of the bank that services the bank account of the debtor), execution may be levied on any other property belonging to debtor, as well as the property of the founders (participants) of the legal entity, if the law does not set limits on that property and the liability of the founders (participants) of the legal entity is provided. 4. In case of reorganization of the legal entity at the time of execution of the executive document enforcement agent sets succession of the debtor and a submission to the court that rendered judgment about replacement of debtor by his successor.

8. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 8 Reform Article 68. Assessment of property of a debtor 1. Assessment of the debtor's property should be made by an enforcement agent, taking into account its market value and the actual depreciation according to the methodology of debtor's property assessment, approved by the authority. Whereby an agreement on the assessment reached between the claimant and the debtor could be considered. If the assessment of individual items is difficult or the debtor or the claimant objected assessment made by enforcement agent, the enforcement agent shall appoint a specialist to determine the value of the property. Enforcement proceedings party that is not agree with the assessment made by specialist, has the right to challenge it within ten calendar days from the date of review (getting a copy, notification) in the manner prescribed by the civil procedure legislation of the Republic of Kazakhstan. If case of disagreement with the assessment the enforcement agent shall appoint a re-evaluation, and the payment of specialist for re-evaluation made by the side of enforcement proceedings, which did not agree with the assessment. Currency valuables, jewelry and other items made of precious metals and precious stones, antiques, paintings and sculptures, securities, real estate valued with mandatory participation of specialists. 2. Copies of the order of enforcement agent on the appointment of property valuation sent to the parties of enforcement proceedings no later than the day following the day of its adoption.

9. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 9 Reform Article 72. Rotation of realization of a debtor's property 2. On the levy execution of a legal entity’s property the realization of this property shall be carried out in the following order: 1) in the first place - the debtor's property that is not directly involved in the production, including securities, foreign currency, precious metals and precious stones, jewelry, vehicles; 2) in the second place - finished products (goods), as well as other tangible assets that are not directly involved and not intended for direct production; 3) third - immovable property, as well as raw materials, machinery, equipment and other fixed assets for direct involvement in the production; 4) fourth - the property transferred to other persons under the lease (of tenancy), loan, rental or other contracts.

10. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 10 Reform Article 74. Realization of seized property 1. The realization of the seized property, except for property taken by law from circulation, regardless of the grounds of arrest and types of property made by a enforcement agent through trade organizations on a commission basis, as well as at the bidding in the form of auction. Bidding in the form of auction held by private enforcement agent himself, and by the state court officer - through specialized trading organization. Bidding in the form of auction may be held by an electronic auction in the manner determined by the authority.

11. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 11 Reform Article 80. General terms of holding of the electronic auction 1. Persons wishing to participate in the auction, must submit an application for participation in the auction and sign a statement that there are no obstacles to their participation in it, and to make, except the creditor, to the control cash account of the territorial authority or the current account of private enforcement agent guarantee fee in the amount of five percent of the original value of the property. Taking applications for participation in the auction by auction organizer or private enforcement agent ends the day before the auction. Amounts, paid by the person who won the auction, shall be credited to the purchase price. The rest of the bidders get their guarantee fee refunded within five days after the auction ends. 2. Enforcement agents and the judge who made the decision on the enforcement proceedings, the appraiser, who assessed the seized property, as well as their close relatives, spouse (wife), the debtor can not participate in the auction as buyers.

12. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 12 Reform Article 80. General terms of holding of the electronic auction 1. Persons wishing to participate in the auction, must submit an application for participation in the auction and sign a statement that there are no obstacles to their participation in it, and to make, except the creditor, to the control cash account of the territorial authority or the current account of private enforcement agent guarantee fee in the amount of five percent of the original value of the property. Taking applications for participation in the auction by auction organizer or private enforcement agent ends the day before the auction. Amounts, paid by the person who won the auction, shall be credited to the purchase price. The rest of the bidders get their guarantee fee refunded within five days after the auction ends. 2. Enforcement agents and the judge who made the decision on the enforcement proceedings, the appraiser, who assessed the seized property, as well as their close relatives, spouse (wife), the debtor can not participate in the auction as buyers.

13. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 13 Reform Article 85. Consequences of announcement of the electronic auction failure 1. In the case of the announcement of the auction failed the claimant shall be entitled to retain the property on the starting price, and in case of his refusal - to participate in the second auction. 2. When property transferred to the claimant, claimant received value of the debtor's property shall refund the cost of the commission of executive actions and the amount of the payment of the private bailiff in proportion to the value of the property transferred. This amount is subsequently be recovered from the debtor.

14. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 14 Reform Article 85. Consequences of announcement of the electronic auction failure 3. In the event that the auction is failed and failure of claimant to retain the property bailiff in compliance with the rules laid down in this Act, appoints a repeated auction. In this case, the original price of the property sold is lowered to the announced move to the point where one of the participants agreed to buy the property at the announced price, which should not be less than fifty per cent of the initial valuation of the property at the auction. 4. If during the period of repetition by auctioneer of number of a participant will raise the number by another participant (participants), the continuation of trade in this lot is done with the transition to increase.

15. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 15 Current Reform (Draft Law is in Parliament, April 2015) Article 42. Duty of bailiff to suspend enforcement Enforcement proceedings shall be suspended in the following cases: 11) challenge in court by the debtor or recoveror of the results of debtor's property assessment ;

16. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 16 Current Reform (Draft Law is in Parliament - April 2015) Article 159. Measures to ensure the claim 1. Measures to ensure the claim can be: 4) suspension of the sale of property in the case of a claim for release of property from seizure;

17. 17 Current Reform (Draft Law is in Parliament – April, 2015) REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN Article 163. Cancellation of securing a claim 2. In the event of a failure in the lawsuit taken measures to ensure the claim will remain until the decision enters into force. However, the court at the same time with the decision or after the decision can make a determination on the abolition of the claim. When the lawsuit is satisfied taken measures to ensure it remain valid until the enforcement of the judgment.

18. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN DB 2016 18 EXECUTION OF COURT DECISIONS DB 2015 220 days DB 2016 130 days The period of suspension of enforcement proceedingsunlimited10 days Claiming the information on the accounts of legal entities20 днейexcluded Assessment of the debtor's propertyunlimited10 days Priority of execution of the debtor's property1 monthUp to 10 days Sale of seized property2-4 monthsUp to 3 months Notification of upcoming auction1 monthUp to 10 days

19. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 19

20. REFORMS TO ENFORCING CONTRACTS IN KAZAKHSTAN 20 REFORM Article 129. Legal notices and calls 1. Persons involved in the case, their representatives, as well as witnesses, experts, specialists and interpreters shall be notified of the time and place of the hearing or specific legal proceedings and called to court by subpoena 2. Where necessary, the person involved in the case as well as witnesses, experts, specialists and interpreters can be called or notified by registered letter with acknowledgment of its receipt, by telephone or telegram, short text message on mobile subscriber number or e-mail, as well as other means of communication to ensure fixation notice or call. 3. Notices and calls should be directed in such a way that informs the called or had sufficient time for the timely appearance in court and to prepare for the case. 4. Notification or call is forwarded to the given address, or mobile number or electronic address designated by the party or other person which involved in the case. If citizen does not reside at the address that court was reported, the notice or the call can be directed at his place of work. Notification or call addressed to the organization are directed at the place of its location.

21. 21 Thank you for your attention!