A scheme of white cotton business

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At the initiative of NCE "Atameken" were adopted changes in the legislation, regulating the activities of cotton processors

The head of state signed the Law of the Republic of Kazakhstan "On amendments and additions to some legislative acts of Kazakhstan on the development of the cotton industry", aimed at improving the state regulation of the cotton industry.

The law removed the previously existing restrictions on the exercise of entrepreneurial activity for cotton processing companies that will give them the opportunity to respond flexibly and efficiently to the needs of cotton growers.

The National Chamber of Entrepreneurs of Kazakhstan "Atameken" came with the initiative for amendments to the legislation with the support of the Kazakh Cotton Association and the deputy of the Majilis Rozakul Halmuradova.

The subject of discussion was the paragraph 1 of article 15 of the Law "On the development of the cotton industry". This rule actually forbade cotton processing companies to carry out any business activities, not related to the provision of services for storage of cotton with the issuance of special receipts. Also, they were not allowed to issue guarantees; to provide their property as collateral for the obligations of third parties; dispose fixed assets. According to experts of the Chamber carry out activities on provision of storage services becomes completely impossible without these elements.

"If you literally interpret the ban, the cotton processing companies are even banned from processing raw cotton, even though this is the main activity of such enterprises", - says the expert of the Chamber.

In addition, limiting the cotton companies at the disposal of the property, the developers of the law, virtually admitted violation of the constitutional right of ownership (as we know, its foundation entitles the right of possession, use and disposal).

Lawyers urged the experts of the Ministry of Agriculture that the exclusion of this clause allows enterprises to take part in co-financing of spring sowing compaings of growers of cotton, textile cluster development, co-operation between market participants, the organization of timely modernization of production facilities.

After two years of intense discussions with experts of the Chamber and Industry Association, the Ministry of Agriculture supported the exclusion of the above mentioned rules.

The current version of the law also provides for such amendments as the settlement process of preparation and procurement of raw cotton. The collisions, which occur during the division of powers between levels of government and the transfer of justice powers concerning the introduction, extension and suspension of the interim management of the cotton organizations, are eliminated.