Promoting US-Canada Investments in Mining Through Kazakhstan Business Hub
Both Kazakhstan and Canada are contracting states to the International Investment Dispute Settlement Convention, offering legal frameworks supportive of mining investments. Kazakhstan's stable mineral contracts, international treaties, and legal remedies make it an attractive destination for US and Canadian investments in the mining sector.
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Presentation Transcript
Promoting US-Canada investments in Mining through business Hub in Kazakhstan Timur Odilov Partner Haller Lomax Yuri Savguira Senior Engagement Manager Hatch June 2023
Why Kazakhstan? Both Kazakhstan and Canada are the contracting states to the International Investment Dispute Settlement Convention. ICSID provides facilities for conciliation and arbitration of investment disputes between Kazakhstan is a member of international treaties protecting the rights of investors and has signed double tax treaties with a number of countries, including the US and Canada. Kazakhstan has been developing sustainable legal framework supporting the mining business brought by the Subsoil Use Code in 2017 Kazakhstan is the top country for the US and Canada amongst the Central Asia countries for mining business
Legal framework to refer General concept Investors are provided with full and unconditional protection of rights and interests Investors has the right to compensation for damage caused by illegal actions (inaction) of officials or acts of government authorities Kazakhstan guarantees the stability of the terms of mineral contracts and licenses granted (reservations applied) Compulsory seizure of investor's property (nationalization, requisition) is in exceptional cases and compensable Basic International Treaties International treaties ratified by Kazakhstan are respected as having priority over the local laws Kazakhstan has signed double tax treaties with 55 countries (including US and Canada) Kazakhstan has signed bilateral investment protection agreements with 51 countries (including US)
Legal framework to refer Legal remedies General courts, international arbitration, AIFC arbitration center and court based on England and Wales principles Court of Astana city and Judicial tribunal of the Supreme Court for investment disputes Kazakhstan is a member of the International Center for the Settlement of Investment Disputes (ICSID), a tribunal applying the rules of the UN Commission on International Trade Law Arbitration New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Government tools regarding investors Foreign Investors Council under the President of the Republic of Kazakhstan Coordination Council chaired by Prime Minister of the Republic of Kazakhstan Investment Climate Improvement Council under the Government of the Republic of Kazakhstan Investment Ombudsman - Prime Minister of the Republic of Kazakhstan
Why Hub? Increased number of US and Canadian businesses are entering Kazakhstan and Central Asian countries Kazakhstan has achieved significant progress in building an attractive regulatory framework in mining sector The mining sector is just a starting point for broader bilateral relations Demand for protection, cooperation and coordination of mutual investments
Hub: Coverage Central Asia Core presence in Kazakhstan Other Central Asia Kyrgyzstan Uzbekistan Tajikistan
Hub: Initial Scope Attracting, promoting and protecting US/CAN business in Kazakhstan and vise versa Informing policy makers through recent experience in mining Advising the US/CAN business on sector policy in Kazakhstan Knowledge exchange to share experience and lessons learned with Hub members Coordinating contacts and business between US-Canada, Kazakhstan and other Central Asian countries Attracting technologies and equipment Consultations on trade, transportation, logistics and sanction issues Specifics: - Bridging of the cultural gap to allow for reliable and profitable business operation - Assistance in work permits for US-Canadian citizens, participation in exhibitions and conferences in two countries - Assistance in development of geological data bank and map of Kazakhstan, interaction between the national geological surveys (services)
Hub: Legal Form Option 1 Association: a Kazakhstan based nonprofit association established by joint efforts of US and Canadian companies and Kazakhstan mining SoEs Commercial activity may be done as long it is consistent with the target purpose of the Association Presence in other CA is subject to the respective law: e.g. subsidiary or rep office
Hub: Legal Form Option 2 Rep Office: Hub is established by the members outside Kazakhstan (in Canada/US) and registers its representative office in Kazakhstan Commercial/income activity is not allowed Managed by General Manager/Head of the Rep Office to be appointed by the Head Office Same presence in other CA, however, subject to verification
Hub: Structure of Association General Meeting of Members: a supreme corporate body to decides on any matter pertaining to the Association Counsel: a supervisory body to decide on the strategic and development matters/other matters (save for prerogative of the Meeting of Members and CEO) The Counsel to include high-level representative of the Kazakhstan Government (e.g., Minister of mining authority or relevant Deputy Prime- Minister), national mining companies (Kazatomprom, Tau-Ken Samruk) CEO: deals with day-to-day management of the Association. Chapters: Canada chapter, US chapter
Hub: Financing/Office/People Financing Membership fees depending on scale of the parent company Office staff of 3-4 people to support daily basis People Office Locating in Astana, the capital
Path Forward The proposed high-level legal form, and structure association is viewed as a starting point for the development of a formalized structure for the hub A detailed view of the Hub structure will be developed by the Hub members with the aim to have a functioning entity in Q3 2023. A kick-off meeting (remote) to develop a roadmap for the establishment of a North America Kazakhstan business Hub will take place in early July. All US and Canadian companies operating in the mining and metals sector are welcome to join the Hub!
Kick-Off Meeting Kick-off meeting to develop a roadmap for the establishment of the Hub is scheduled for Thursday, July 13th @ 8AM EST (18:00 local time). Companies interested to join the Hub to express their interest by emailing yuri.savguira@hatch.com by June 23rd, 2023. Agenda and invitation for an online meeting will be distributed by June 30th.
Concluding Remarks The Hub aims to act as a platform for North American companies in the mining and metals sector to increase bilateral relationships with Kazakhstan The Hub presents an opportunity for knowledge exchange: B2G Informing policy changes Advisory on sector policy in Kazakhstan Experience sharing and lessons learned Technology exchange The Hub is open to junior and well-established companies alike We look forward to join our efforts to increase our activity in Kazakhstan!
