Library of Congress

Law Library of Congress

The Library of Congress > Law Library > News & Events > Global Legal Monitor

Kazakhstan: Nationalization Law Considered

(June 21, 2011) It was recently reported that the Parliament of Kazakhstan has started to consider a new bill on state property that will consolidate current Kazakh legislation on management of property that belongs to the state, determine the legal status of state enterprises in Kazakhstan, and define to what degree the state may influence business operations in the country. (Zhiger Baitilesov, Economic Reform Committee of the Mazhilis Will Draft the State Property Law [in Russian], NOMAD news agency (last visited June 20, 2011).)

The State Property Law currently in force was amended most recently on March 1, 2011, when the definition and process of nationalization were introduced into the national legal system. The new amendment would allow the government of Kazakhstan to seize property in extraordinary situations, when it is justified by national security interests and when other forms of taking the property or negotiation with the owner have been exhausted. The bill states that one-time reimbursement in an amount equal to the market price of the nationalized property will be paid within two months after the relevant nationalization decree enters into force. (Law No. 413 of March 1, 2011, § 5, arts. 54-60 [in Russian], Kazakh government website (last visited June 20, 2011).)

Before the nationalization definition was introduced, Kazakh officials preferred to call acts of transfer of private property held by foreigners into state possession “restoration of the balance of interest” with foreign investors. In the 1990s, this oil-rich country did not have sufficient means to develop its oil industry and attracted foreign investors with lucrative contracts. Largely due to oil price increases, Kazakhstan has become the largest Central Asian economy and has started to enlarge state control over the oil industry. (Nationalization Is Legally Introduced in Kazakhstan [in Russian], NEWSRU.COM (Mar. 24, 2011).)