By Azamat Kuatbekov*, Gulnur Bekmukhanbetova* (Baker McKenzie Kazakhstan)
1. Domestic bribery (private to public)
1.1 Legal framework
Bribery of public officials is regulated under Articles 366 to 368 of the Kazakhstani Criminal Code1; Articles 676 to 681 of the Code of Administrative Offences2; the Law on State Service of the Republic of Kazakhstan3; and the Law on Countering Corruption.4
1.2 Definition of bribery
Under the law, bribery may be committed by either public officials or private individuals who try to corrupt a public official.
“Bribery” is indirectly defined in Articles 366 and 367 of the Criminal Code as a grant to or receipt by a public official, directly or through an intermediary, of money, securities, other property, proprietary rights or benefits for an act or non-act in the interests of the bribe giver or persons he or she represents, if the act or non-act is part of the public official’s duties under the law, what the public official can do by virtue of his or her authority, or the bribe is given in exchange for general informal protection or advancement.
1.3 Definition of a public official
With regard to corruption, the Criminal Code lists a number of categories of persons who are considered public officials. These categories include the following:
(a) State servants
(b) Persons elected for municipal positions
(c) Persons registered as candidates for president, Parliament or municipal elections
(d) Servants employed by municipalities who are paid out of the state budget
(e) Persons involved in managing state organizations or legal entities in which the state owns more than 50% of the shares, as well as their direct and indirect subsidiaries (defined as state organizations or legal entities owning more than 50% of the shares)
(f) Employees of the National Bank of Kazakhstan and its divisions
(g) Persons who perform organizational or administrative functions in state authorities, municipalities or Kazakhstan’s military forces
(h) Persons who hold positions prescribed by the Constitution or other laws to perform state functions and exercise state authority, as well persons holding political office
1.4 Consequences of bribery
(a) For individuals involved
The Criminal Code establishes a range of penalties for individuals who corrupt public officials, as follows:
- Up to 15 years in jail, with or without the confiscation of property
- Fine of up to 50 times the amount of bribe
- Lifetime prohibition on holding certain positions or performing certain activities
(b) For a company or legal entity
Legal entities that corrupt public officials may be subject to administrative liability inLegal entities that corrupt public officials may be subject to administrative liability in the form of a fine of up to 750 times the monthly calculation index (MCI) (approximately USD 5,157; for repeated breaches, a fine of up to 1,500 MCI or approximately USD 10,314).
1.5 Political contributions
Contributions to political parties are regulated under Article 18 of the Law on Political Parties.5 There are no quantitative restrictions on contributions. However, the law does identify persons and entities that are not allowed to make contributions, namely:
(a) Foreign states, foreign legal entities and international organizations
(b) Foreign citizens and persons without citizenship
(c) Legal entities with participation of foreign interest
(d) State authorities and state organizations
(e) Religious and charity organizations
(f) Anonymous contributors
(g) Citizens and legal entities of Kazakhstan that received grants or donations from international non-governmental institutions
1.6 Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)
Under Kazakhstani law, the provision of any benefits to public officials is generally prohibited and could amount to criminal or administrative liability if the benefits were provided in exchange for an official’s state functions.
However, under the Civil Code, certain symbolic gifts with a value not exceeding 10 MCI (approximately USD 69) may be provided to government officials, taking into consideration the definition of bribery, as discussed in Section 1.2, that such gifts are legal only if not made in exchange for the official performing his or her official functions. Otherwise, there is a risk of criminal and/or administrative liability.
In addition, government officials may in certain cases be allowed to accept invitations to participate in international science, professional and other similar forums at the expense of organizations, and during the forums, the officials may be permitted to accept certain limited gifts or benefits.
2. Domestic bribery (private to private)
2.1 Legal framework
Private bribery is regulated under Article 253 of the Criminal Code.
2.2 Definition of private bribery
“Private bribery” is defined as an unlawful grant to or receipt by a person involved in the management of a commercial or other organization, of money, securities or other property, or an illegal performance of services in exchange for that person using his or her position in the interest of the bribe-giver or providing to the bribe- giver general informal protection or advancement.
2.3 Consequences of private bribery
(a) The Criminal Code provides a range of consequences for individuals involved in private bribery, namely:
- Up to 12 years in jail with or without the confiscation of his or her property
- Penalty of up to 5,000 MCI (approximately USD 34,379) or correction works in the same amount
- Restriction of freedom for up to five years
(b) For a company or legal entity, no liability is specified.
2.4 Limitation on hospitality expenses (gifts, travel, meals, entertainment, among others)
Generally, Kazakhstani legislation does not establish quantitative or qualitative limitations on paying for hospitality expenses for managers in the private sector.
3. Corruption of foreign public officials
3.1 Legal framework
Corruption of foreign public officials is regulated under Articles 366 and 367 of the Criminal Code. These are the same articles that apply to bribing domestic public officials.
Unlike in other countries such as the United States or the United Kingdom, Kazakhstan’s prohibition against bribing foreign public officials does not extend beyond its borders except in very specific cases.
The Criminal Code only views bribing foreign officials as a crime in the following cases:
(a) If the bribery of a foreign public official was committed outside of Kazakhstan by a Kazakhstani citizen and was not prosecuted in the state in which it was committed
(b) If the bribery of a foreign public official was committed outside of Kazakhstan by a non-Kazakhstani citizen directly against the interest of Kazakhstan, and was not prosecuted in the state in which it was committed
(c) If the bribery of a foreign public official was committed outside of Kazakhstan by a non-Kazakhstani citizen and was not prosecuted in the state it was committed, and bribery is subject to an international treaty to which Kazakhstan and this state are parties
3.2 Definition of corruption of foreign public officials
The Criminal Code provides just one definition for corruption of both domestic and foreign public officials.
3.3 Definition of foreign public officials
The Criminal Code does not define “foreign public official.” In practice, this may raise issues of interpretation and application of the relevant provisions of the Criminal Code.
3.4 Consequences of corruption of foreign public officials
Since Kazakhstani legislation does not differentiate between bribery of foreign and domestic officials, the consequences are the same as those mentioned in Section 1.4.
3.5 Limitations on hospitality expenses (gifts, travel, meals, entertainment, among others)
The limitations on hospitality expenses of domestic officials do not apply to hospitality of foreign public officials because the Law On State Service of the Republic of Kazakhstan and Law On Countering Corruption only apply to Kazakhstani public officials.
4. Facilitation payments
Kazakhstani anti-corruption laws do not regulate facilitating payments (e.g., modest payments to a public official to encourage him or her to perform an act he or she is legally required to perform) or gifts provided in accordance with generally accepted norms of courtesy and hospitality.
Thus, as a general rule, the provision of facilitating payments could lead to liability under the Criminal Code or the Administrative Code.
5. Compliance programs
5.1 Value of a compliance program in mitigating/eliminating the criminal liability of legal entities
While Kazakhstani legislation provides for the administrative (not criminal) liability of legal entities, compliance programs within the company do not help to either mitigate or eliminate the company’s liability for corruption.
5.2 Absence of a compliance program as a crime
Kazakhstani legislation does not recognize the absence of a compliance program as a crime.
5.3 Elements of a compliance program
(a) Legal framework
Article 16 of the Law On Countering Corruption requires organizations to adopt certain anti-corruption measures. Such measures include, among others, the development and compliance with an internal code of business ethics, prevention of conflict of interest, development of mechanisms to ensure accountability, control and transparency of decision-making processes within the organization, and development of anticorruption culture. The law does not provide for any penalties or other consequences for organizations that do not comply with the aforementioned requirement. Because this requirement has only been introduced recently, it remains to be seen how it will be implemented and enforced in practice. Further, Kazakhstani legislation at present does not provide for the criminal liability of legal entities (legal entities could only be subjected to administrative liability – mainly fines). Nevertheless, compliance programs have proved to be an effective tool in increasing local companies’ and their employees’ general awareness of the applicable regulatory regime as well as of potential risks.
(b) Recommended practice
Pursuant to Article 16 of the Law On Countering Corruption, it is recommended that Kazakh companies undertake measures to prevent corruption, including adopting compliance programs.
6. Regulator with jurisdiction to prosecute corruption
Under Kazakhstani legislation, the agency tasked with prosecuting corruption is the Agency of the Republic of Kazakhstan for Public Service Affairs and Countering Corruption. This agency reports directly to the president of Kazakhstan.
1 – Criminal Code of the Republic of Kazakhstan dated 3 July 2014, as amended. – Back
2 – Code of the Republic of Kazakhstan On Administrative Offences dated 5 July 2014, as amended. – Back
3 – Law on State Service of the Republic of Kazakhstan dated 23 November 2015.- Back
4 – Law on Countering Corruption dated 18 November 2015, as amended. – Back
5 – Law on Political Parties dated 15 July 2002, as amended. – Back
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