On establishment of the special economic zone "Khorgos — Eastern Gate" Decree of the President of the Republic of Kazakhstan dated November 29, 2011 No. 187 Subject to be published in Collected Acts of the President and the Government of the Republic of Kazakhstan In accordance with the Item 8 of the Article 7 of the Law of the Republic of Kazakhstan of July 21, 2011 "On special economic zones in the Republic of Kazakhstan", I issue this Decree. 1. To establish the special economic zone "Khorgos — Eastern Gate" (hereinafter - SEZ) until 2035. 2. To approve the following: 1) Regulation on SEZ; 2) target performance indicators of SEZ and critical non-achievement level of target performance indicators of SEZ. 3. Government of the Republic of Kazakhstan shall take measures to provide for activity of SEZ. 4. Administration of the President of the Republic of Kazakhstan shall be responsible for control of implementation of this Decree. 5. This Decree shall come into force from the date of its signature. President of the Republic of Kazakhstan N. Nazarbaev APPROVED BY the Decree of the President of the Republic of Kazakhstan dated November 29, 2011 No. 187 REGULATION on special economic zone "Khorgos — Eastern Gate" 1. General provisions 1. Special economic zone "Chemical Park "Taraz" (hereinafter - SEZ) is located on the territory of Almaty oblast at the boundaries according to the attached plan. The territory of SEZ is 5740 hectares and is an integral part of the territory of the Republic of Kazakhstan. 2. SEZ is created for: 1) establishment of an effective transport and logistics and industrial center, providing the interests of trade and export activities and implementation of the transit potential of the Republic of Kazakhstan, also promoting to the development of economic and cultural exchange with the neighbouring countries; 2) integration of the Kazakh products in the world system of production and distribution, creation of an innovative, competitive domestically produced products in accordance with international standards; 3) creation of a favourable investment climate, and attracting national and foreign investments to implement investment projects; 4) accelerated development of the region to promote the economy of the country entering the global economic relation system; 5) improvement of regulations of market relations, introduction of modern administration and economic management methods; 6) increasing the employment rate. 3. SEZ activities are regulated by the Constitution of the Republic of Kazakhstan, the Law of the Republic of Kazakhstan dated July 21, 2011 "On special economic zones in the Republic of Kazakhstan", this Regulation and other regulatory legal acts of the Republic of Kazakhstan. 4. Priority activities on the territory of SEZ are: 1) storage facilities and secondary transportation activity; 2) food production; 3) production of leather and related products; 4) production of textile goods; 5) production of other non-metallic mineral products; 6) production of chemical products; 7) production of finished metal products, except for machinery and equipment; 8) production of machinery and equipment, not included in other categories; 9) construction of exhibition buildings, museums, warehouses and offices in accordance with the design and estimate documentation. 2. SEZ management 5. SEZ management shall be conducted in accordance with the Law of the Republic of Kazakhstan of July 21, 2011 "On special economic zones in the Republic of Kazakhstan". 3. Taxation on the territory of SEZ 6. Taxation on the territory of SEZ is regulated by the tax legislation of the Republic of Kazakhstan. 4. Customs regulation 7. Customs regulation on the territory of SEZ is provided in accordance with the provisions of the customs legislation of the Customs Union and the Republic of Kazakhstan 8. The customs procedure of customs-free zone is applied on some territories of SEZ, where priority activities will be carried out. The customs procedure of customs-free zone includes goods intended for distribution and (or) use on the territory of SEZ by persons carrying out priority activities on the territory of SEZ in accordance with the agreement on activities performed as a member of SEZ. 9. The territory of SEZ is a customs control zone. The boundaries of SEZ are built up along the perimeter of its territory with the help of special fences to perform the customs control. 10. Places for temporary storage of goods can be created on the territory of SEZ in accordance with the procedure as provided for by the customs legislation of the Customs Union and the Republic of Kazakhstan. 11. Goods included into the customs procedure of customs-free zone, and goods of the Customs Union, not included into the customs procedure of customs-free zone, and foreign goods included into other customs procedures can be distributed and used on the territory of SEZ. 12. Goods imported into the territory of SEZ and included into the customs procedure of customs-free zone shall be considered as goods which are outside the customs territory of the Customs Union to use customs duties and taxes, and non-tariff regulation measures. 13. Customs operations related to temporary storage, customs declaration, customs clearance and release of goods, and customs control on the territory of SEZ shall be carried out in accordance with the procedure as provided for by the customs legislation of the Customs Union and the Republic of Kazakhstan. 5. Environmental Protection 14. SEZ activities are based on the rational and efficient use of natural resources by creating conditions for transition to sustainable development and environmental protection on the basis of a balance of economic, social and environmental aspects to increase the quality of life. 6. Procedure and terms of SEZ abolition 15. SEZ shall be abolished after the expiry of the date when it was created. SEZ is abolished by the Decree of the President of the Republic of Kazakhstan identified by the Government of the Republic of Kazakhstan. 7. Final Provisions 16. Pre-term abolition of SEZ shall be conducted in accordance with the Law of the Republic of Kazakhstan of July 21, 2011 "On special economic zones in the Republic of Kazakhstan". 17. SEZ activities not regulated by this Regulation shall be conducted in accordance with the current Law of the Republic of Kazakhstan and the Customs Union. ATTACHMENT to the Regulation on special economic zone "Khorgos — Eastern Gate" PLAN of the special economic zone "Khorgos — Eastern Gate" Item No. Name of operational zones and facilities general Area, ha reserve TOTAL General operational zones: 1. 2. 3. 1. Transport and logistic center "Dry port" Industrial production zone Residential zone On-site auxiliary facilities (territory) International Center for Border Cooperation 370 200 570 340 810 350 200 690 1010 319 319 “Khorgos” including: 2. - administrative and business area of ICBC “Khorgos” (12 operational zones) - Main Checkpoint (CP-1) - other auxiliary on-site infrastructure facilities and building providing services for administrative and business area of ICBC “Khorgos” and SEZ "Khorgos — Eastern Gate" On-site infrastructure facilities 185 31 103 806 806 - Customs CP “Khorgas” 15 15 - municipal area 60 60 - sanitarian and protective planting 90 90 - floodplain and water protection areas 641 641 Communal area: 575 575 - streets, roads 250 250 - parks, garden squares, avenues 175 175 - other communal areas 150 150 including: 3. including: 4. Reserve areas Total at the boundaries of SEZ "Khorgos — Eastern Gate" 3220 1770 1770 2520 5740 APPROVED BY the Decree of the President of the Republic of Kazakhstan dated November 29, 2011 No. 187 TARGET PERFORMANCE INDICATORS of the special economic zone "Khorgos — Eastern Gate" and critical non-achievement level of target indicators of SEZ No. Goals, objectives and performance Unit Base period 1 1. 2 Total volume of investments, including: Volume of foreign investment Volume of domestic investment Production output of goods and services (works) on the territory of SEZ** Number of participants (Company) Number of persons engaged in supplementary activities Number of jobs, created on the territory of SEZ Local content share in total production on the territory of SEZ Goods traffic volume (export, import, transit) 3 million tenge 4 - million tenge million tenge million tenge - 1946 194 5692 569 - 209164 20916 409820 40981 - - - 520612 52062 Unit - 12 10 27 20 man - 1700 700 4900 1400 man - 7200 3600 16200 6300 % - 75% 75% 75% 75% 150 50 2000 650 1.1. 1.2. 2. 3. 4. 5. 6. 7. thousand tons Achievement by 2015, including target critical level indicator 5 6 211110 21110 Achievement by 2020, including target critical level indicator 7 8 415512 41550 Table continued Achievement by 2025, including target indicator critical level Achievement by 2030, including target indicator critical level Achievement by 2037, including target indicator critical level 9 522716 10215 512501 780918 42 8100 19700 75% 2400 10 53465 1021 52444 78092 30 2100 6300 75% 800 11 522716 10215 512501 1171377 64 11300 20500 75% 2700 12 53465 1021 52444 117138 40 2800 6300 75% 850 13 522716 10215 512501 1687891 89 14500 22000 75% 3000 14 53465 1021 52444 168790 50 3500 6300 75% 1000 Note: 1) Indicators performance is shown on a cumulative total; 2) during calculation the following exchange rate is used: 1 USD - 147 tenge. © 2012. 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