WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/ACC/KAZ/51 
7 September 2004  
 
(04-3725) 
Working Party on the 
Accession of Kazakhstan Original:   English 
 
 
 
ACCESSION OF KAZAKHSTAN 
 
Notification on State-Trading Enterprises 
 
 
 The following submission, dated 2 September 2004,  is being circulated at the request of the 
Delegation of the Republic of Kazakhstan.   
_______________ 
 WT/ACC/KAZ/51 
Page 2 
 
 
 I.  ENUMERATION OF STATE TRADING ENTERPRISERS 
The following enterprises in th e Republic of Kazakhstan could be considered as state trading 
enterprises as defined in Article XVII of the GA TT and Understanding on the Interpretation of the 
Article XVII of the GATT: 
- Joint Stock Company "Food Contract Corporation"; 
- Joint Stock Company "KazAgroFinans"; 
- Joint Stock Company "Mal Onimderi Korporatsiyasy"; and 
- JSC "Food Contract Corporation". 
II.  THE REASONS AND OBJECTIVES OF CREATION 
The State Food Contract Corporation was created by th e Resolution of the Cabinet of Ministers of the 
Republic of Kazakhstan No. 309 of 21 March 1995. 
By the Resolution of the Government of the Re public of Kazakhstan No. 260 of 24 February 1997 
"On Reorganization of the State Food Contract Cor poration" it was changed to JSC "Food Contract 
Corporation" (hereinafter referred to as the FCC) .  The FCC is a company with 100 per cent state 
share in the nominal capital. 
FCC has been created to ensure the safety and renovation of the state grain resources as well as to 
regulate the domestic prices for grain with the he lp of interventional procurements, which are aimed 
at ensuring the food security of the country and increasing the exports of Kazakh grain. 
Annually, the Government of the Republic of Kaza khstan allocates funds from the national budget for 
procurement, storage and transportation of state gr ain resources for maintenance of the food security 
of the country.  The Government of the Republic of Kazakhstan approves the volumes and rules for 
grain purchases every year. 
FCC has the exclusive right to implement this state budget funded program. FCC also has the right 
both to import and to export grain. FCC's share in the total grain export volume does not exceed 14 per cent.  
Below are the main products in the trade of FCC: 
- wheat; 
- barley; 
- rice. 
III.  GENERAL 
One of the major tasks of FCC is implementation of the export policy aimed at consolidation of 
positions in external markets and development of new markets.  FCC has been exporting food grain 
since 1998. 
As a result of the market reforms, the agricultu ral sector of Kazakhstan has significantly changed. 
Foreign trade operations of private traders and FC C are based on the conditions and rights of free 
competition.  In this view, FCC's activity does not contradict GATT provisions. 
FCC's sales' volumes for export ope rations, export prices and the ra tio of the export and domestic 
prices depend on the situation in the domestic and international markets.  WT/ACC/KAZ/51 
 Page 3 
 
 
 Because of high probability of price fluctuations both in the domestic and world markets as well as 
due to associated high risks, FCC does not make long-term (more than one year) contracts.  
The Government of the Republic of Kazakhstan do es not regulate conclusion and implementation of 
FCC's export contracts, except for supplies made by agreements between governments. 
IV.  STATISTICAL DATA 
See Annex 1. WT/ACC/KAZ/51 
Page 4 
 
 
 - JSC  "Mal Onimderi Korporatsiyasy"  
II. THE REASONS AND OBJECTIVES OF CREATION 
JSC "Mal Onimderi Korporatsiyasy" (hereinafter re ferred to as MOK) was created by the Resolution 
of the Government of the Republic of Kazakhstan No. 1168 of 8 September 2001.  
The main objectives of MOK's business are procur ement, stocking up, processing and delivery to 
external and domestic markets of ca ttle-breeding products and livestock. 
The following are the main products of MOK's trade: - meat; 
- dry milk; 
- cheese; 
- skins; and 
- wool. 
The MOK's exclusive right in foreign trade operations  is characterized by its administration of the 
program "Crediting Purchases and Export of Cat tle-Breeding Products" funded by the national 
budget. 
III.  GENERAL  
MOK exports cattle-breeding products a nd also has the right to import it. 
Import and export of cattle-breeding products both by free traders and MOK in the Republic of 
Kazakhstan is the domain of the free market.  The Government regulates foreign trade operations with 
cattle-breeding products through customs tariff  measures and application of sanitary and 
phytosanitary measures, which is in conformity with the WTO agreements. 
MOK determines the amounts and prices of export products on its own discretion in accordance with 
the world market prices.  
At present, MOK makes no long-term contracts.  The Government of the Republic of Kazakhstan 
does not regulate trade rules or methods of ex ecution of liabilities under MOK's contracts for export 
of cattle-breeding products. 
IV.  STATISTICAL DATA 
See Annex 2.  WT/ACC/KAZ/51 
 Page 5 
 
 
 - JSC "KazAgroFinans"  
II.  THE REASONS AND OBJECTIVES OF CREATION  
JSC "KazAgroFinans" (hereinafter referred to  as KAF) was created on 28 December 1999 by the 
Resolution of the Government of the Republic  of Kazakhstan No. 1777 of 24 November 1999 "On 
Some Agricultural Issues". The founder and the sole  shareholder of KAF is the Government of the 
Republic of Kazakhstan. 
The main functions of KAF consist of the following: - participation in development and implementa tion of governmental programs on provision of 
loans and financial support to agricultural commodity producers; 
- leasing machinery and technological equipment to entities dealing with production and 
processing of agricultural products; 
- provision of guarantees against loans received by farmers from commercial banks; 
- allocation of credits. 
The main products covered by the activity of  JSC "KazAgroFinans" are the following: - agricultural tractors; 
- harvesters, grain, feed and other combines; 
- other agricultural machinery and equipment. 
KAF implements the state program funded by the national budget for import of agricultural 
equipment for sale or leasing to farmers. KAF has th e exclusive right to implement this program.   
III.  GENERAL 
JSC "KazAgroFinans" purchases agricultural equipment in the domestic and world markets for further 
leasing to framers. 
The conditions for the agricultura l equipment leasing are as follows: 
- leasing term: 7-10 years; 
- fee rate: 2-7 per cent; 
- payment terms: first payment covers 10 per cent of the equipment cost; the rest of the amount 
shall be paid in equal annual installments; 
- security: commercial bank's guarantee;  
- hypothecation of liquid assets; 
- JSC "KazAgroFinans" has also the right  to export agricultural equipment. 
The Government does not regulate import and expor t of agricultural machinery and equipment. 
Private traders import and export equipments wit hout any restrictions and work in free market 
conditions.  KAF has no monopoly or other exclusive rights or privileges for exports or imports of 
agricultural machinery and equipment.  
The Government of the Republic of Kazakhstan does not regulate the volumes and types of 
agricultural equipment purchased by KAF. "KazAgro Finans" defines them on its own discretion in 
accordance with funds available and demands of farmers. 
The cost of such agricultural equi pment offered for leasing includes: 
- fee rate for JSC "KazAgroFinans" (not exceeding 7 per cent); WT/ACC/KAZ/51 
Page 6 
 
 
 - delivery and installation costs. 
The fee rates are defined by resolutions of the Gove rnment of the Republic of Kazakhstan. It provides 
for no other commercial extra charges. 
The Government covers the expen ses for refunding of KAF's fees fo r the leased equipment from the 
national budget. 
The correlation of export and domestic prices depends on situation on the domestic and world 
markets. 
Since KAF's activity is subject to the laws of the Republic of Kazakhstan on government 
procurement, KAF cannot make long-term contracts.   The Government of the Republic of Kazakhstan 
does not regulate the execution of contractual liabilities. 
IV. STATISTICAL DATA 
See Annex 3.  
  WT/ACC/KAZ/51
 Page 7ANNEX 1 
Grain production, export, import in the Republic of Kazakhsta n and by JSC "Food Contract Corporation" in 2001-2003* 
Years Products national production import export enterprise's export 
tons US$ 000s tons US$ 000s tons US$ 000s tons US$ 000s enterprise's 
share, % 
2001 wheat 12,706,800 980,484 2,412 518 3,022,663 319,190 182,000 14,196 6.02 
barley 2,243,800 120,318 12,338 1,871 253,313 19,232 0 0 0.0 
2002 wheat 12,700,000 801,870 2,176 279 3,978,113 328,920 429,000 34,320 10.78 
barley 2,209,000 102,202 6,730 824 361,521 19,706 0 0 0.0 
2003 wheat 11,537,400 930,828 8,731 626 5,212,584 523,295 755,000 90,600 14.48 
barley 2,154,000 98,565 2,009 193 571,423 36,815 80,000 5,360 14.00 
 
* The monetary values are converted from the national currency - te nge at the weighted average US$ to KZT rate for the year 
Note: in 2001 US$ = 146.73 tenges, in 2002 US$ = 153.28 tenges, in 2003 US$ = 149.58 tenges  
 WT/ACC/KAZ/51 
Page 8 ANNEX 2 
Livestock-raising production, export and import in the Republic of  Kazakhstan and by JSC "Mal Onymderi Korporatsyasy" in 2001-2 003* 
Year Product name national production total export enterprise's  export total import enterprise's import 
tons US$ 000s tons US$ 000s tons US$ 000s enterprise's 
share, % tons US$ 000s tons US$ 000s enterprise's 
share, % 
2001 cleaned wool 1,971 4,296 1,900 1,478 36 316,203 2 - - - - - 
2002 cheese 8,821 20,073 815 494 40 36 5 2,059 3,351 - - - 
cleaned wool 4,700 8,866 3,500 3,228 332 732 9 56 136 - - - 
dried milk 2,383 6,322 13 8 - - - 2,148 3,683 40 36 2 
2003 cheese 10,883 26,554 1,007 699 136 142 14 2,471 4,611 - - - 
cattle skins, th. pcs 2, 100 7,541 1, 241 11,118 58  82 5 114 1,540 - - - 
cleaned wool 6,762 16,272 4,962 2,774 148 195 3 43 39 - - - 
Wet-Blue half-
stock, th. sq. dm 93,978 19,334 19,345 46,650 96 257 0,5 200 459 - - - 
pork 194,200 181,762 488 521 100 129 21 218 388 - - - 
 
* The monetary values are converted from the national currency - te nge at the weighted average US$ to KZT rate for the year 
Note:  in 2001 US$ = 146.73 tenges, in 2002 US$ = 153.28 tenges, in 2003 US$ = 149.58 tenges  
  WT/ACC/KAZ/51
 Page 9ANNEX 3 
Agricultural equipment production, export and import volumes in th e Republic of Kazakhstan and by JSC "KazAgroFinans" in 2001-2 003* 
Years Products name national production total  export total  import enterprise's import 
Volume 
(pcs) Cost  
US$ 000s Volume 
(pcs) Cost  
US$ 000s Volume 
(pcs) Cost  
US$ 000s Volume 
(pcs) Cost*        
US$ 000s enterprise's 
share, % 
2001 Agricultural 
tractors 545 NA 0 0 450 5,534.9 196 1,776.9 
 44 
Combines 9 NA 213 427 1,591 45,658 80 2,408.0 5 
Seeders 877 NA 810 187.6 90 703.3 0 0 0 
2002 Agricultural 
tractors 82 NA 0 0 296 4,388.9 5 216.8 
 2 
Combines 0 NA 0 0 68 2,378.5 5 816.6 7 
Seeders 500 NA 340 61.2 142 1,131 5 103.2 4 
2003 Agricultural 
tractors 164 NA 1 16.5 679 10,629.5 0 0 
 - 
Combines 0 NA 61 653.9 1,165 55,962 0 0 - 
Seeders 0 NA 160 23.1 477 1,088.9 0 0 - 
 
* The monetary values are converted from the national currency - te nge at the weighted average US$ to KZT rate for the year 
Note: in 2001 US$ = 146.73 tenges, in 2002 US$ = 153.28 tenges, in 2003 US$ = 149.58 tenges  
 
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