OECD Peer Reviews of Competition Law and Policy: Kazakhstan 2025

6. State participation in the economy

Abstract

This chapter analyses the role of the state in Kazakhstan’s economy, focusing on state-owned enterprises, state monopolies, so-called “special rights”, natural monopolies, price regulation, commodity exchanges, and state support measures. The chapter also examines the institutional fragmentation of regulatory functions and the dual role of the competition authority as both enforcer and market regulator.

6.1. State-owned enterprises

In Kazakhstan, SOEs can take the form of standard legal entities, such as joint stock companies and limited liability companies, or the form of a special state enterprise.

By decree of the government, Kazakhstan maintains a list of activities carried out by state enterprises, legal entities in which the state owns more than 50% of the shares and their affiliates.1 This list is frequently updated and, as of 1 February 2025, contains 419 activities carried out by at least one (and sometimes more than 30) SOEs. They include utility sectors, such as energy, telecommunications, transport, postal services and waste management, but also many sectors that are typically competitive and private-sector led, such as manufacturing, agriculture, restaurant and hotel services, newspapers, TV broadcasting, IT sector (e.g. installation and maintenance of hardware and software, IT consulting), real estate, financial services, car and truck rentals, packaging etc.

The list of all state property, including SOEs, is maintained by the Committee on State Property under the Ministry of Finance.

6.1.1. Limiting state presence in the economy

Given the strong state presence in the economy, Kazakhstan has implemented rules to restrict the establishment of new SOEs (so-called Yellow Pages Rules). Article 192 of the Entrepreneur Code specifies grounds for state participation in the economy, namely:

1. absence of other options for ensuring national security, defence ability or protection of interests of the society

2. use and maintenance of strategic facilities in state ownership

3. carrying out activities of state monopolies

4. absence or low level of competition in a product market

5. carrying out activities by previously established SOEs.

When establishing a new SOE, the state can only do so on one of these grounds. In all cases, the state is prohibited from establishing SOEs which are small enterprises.

The Agency oversees the establishment of SOEs. Any new SOE, as well as expansions or changes in activity by existing SOEs, requires the Agency’s consent. The state or local body must submit an application, after which the Agency analyses the product market and issues a decision within 60 days. Consent may be denied if the SOE’s creation would restrict competition, or if such business exists already. This is known as the “yellow-pages rule” (Box 6.1) If an SOE is established without approval, the Agency can issue an order requiring the mandatory elimination of a violation, which can be appealed in court.

Box 6.1. Implementation of the "Yellow Pages Rule" in Kazakhstan

Measures taken to limit the state’s activities in commercial activities

Kazakhstan applies the "Yellow Pages Rule" to limit state participation in commercial activities that are already performed by private businesses. This principle is enshrined in the Entrepreneurial Code and operationalised by the Agency for the Protection and Development of Competition (the Agency), which plays a key role in monitoring, preventing, and rolling back unjustified state involvement in markets.

The Agency reviews all proposals for the creation or expansion of state enterprises or entities with more than 50% state ownership. Approval is withheld where private competitors are already active, unless one of a limited set of exceptions applies, such as ensuring national security or addressing underdeveloped competition. In addition, state participation in small businesses is prohibited.

To operationalise this framework, the APDC has taken several steps:

• Activity restrictions: In 2022, the Agency initiated amendments to the Government Resolution listing activities open to state entities, reducing permitted activities from 410 to 365. A 2024 reform further refined the list, specifying permitted activities by 5-digit NACE code, geographic scope and time limits. This targeted approach ensures only strategically necessary public entities remain active where competition is absent.

• Privatisation drive: As part of broader economic liberalisation, over 540 quasi-public entities are slated for transfer to the private sector. The newly created National Privatisation Office within the Agency oversees this effort.

• Monitoring compliance: The Agency regularly audits the statutory activities of state-affiliated entities to ensure alignment with approved mandates. In 2024, following inspections of 793 entities, the Agency issued 331 compliance orders and aligned 12 activities of a national-level state enterprise with competition law.

• Limiting state assignments: Amendments to the Budget Code narrowed the criteria for classifying services as "state assignments," thereby reducing the scope for non-competitive procurement.

These measures aim to reinforce the Agency’s role as a gatekeeper against unwarranted public sector encroachment into competitive markets, thereby supporting the development of a more dynamic and private sector-led economy.

Source: Information provided by the Agency.

However, the framework has limitations. It applies only to the last two grounds for state participation in the economy, exempting the first three and allowing state bodies discretion in creating SOEs. Additionally, as the law retroactively legitimised SOEs established before 2020, the Agency can only monitor expansions or changes in activity of existing SOEs.

More recently some steps were taken to try to limit the scope of SOEs. In 2024 the mechanism for forming types of economic activities carried out by quasi-governmental organisations was revised. A new format for the list of permitted activities for quasi-government sector entities was adopted, introducing new criteria: individual linkage of activities to state-owned companies; establishment of geographical boundaries for operations (regions of the Republic of Kazakhstan) for each entity; and setting (limiting) the duration of enterprise presence (activity period). 2 Moreover, the government adopted a moratorium on establishment of new SOEs until 31 December 2026.3

Box 6.2. Kazakhstan’s telecommunication sector: State dominance and privatisation efforts

Kazakhstan’s telecommunications market has a large state presence. The dominant player in the market is JSC Kazakhtelecom, a publicly traded company in which the national holding company Samruk-Kazyna holds a majority share. Kazakhtelecom operates in several segments, including fixed telephony, mobile telephony, internet access, IT services, amongst others.

A number of mergers and acquisitions shaped the mobile telephony market into a fairly concentrated market which was dominated by Kazakhtelecom until recently. In 2016, Kazakhtelecom entered into a joint venture with Tele2 Group, merging their subsidiaries Altel and Mobile Telecom Service, respectively. Kazakhtelecom had sold its share in Mobile Telecom Service to Tele2 Group in 2010. In 2018, Kazakhtelecom acquired 75% of Kcell, the largest mobile network operator in Kazakhstan at the time. In 2021, it sold 24%, maintaining a controlling 51% share in the company. After Tele2 Group exited the Kazakh market in 2019, Kazakhtelecom obtained full control of the Altel/Mobile Telecom Service joint venture as well.

Kazakhstan’s mobile telephony market effectively became a three-operator market, with Kazakhtelecom controlling two of them, Kcell and Altel/Mobile Telecom Service, amounting to a 63% market share according to the Agency’s 2023 annual report. The third operator is Beeline with a 37% market share.

To reduce state presence in the telecommunications sector, Kazakhstan undertook steps toward privatisation in 2020 when it adopted a new Comprehensive Privatisation Plan for 2021–2025 and, within this plan, included Mobile Telecom Service on the list of SOEs subject to privatisation. The privatisation was planned to be executed through direct sales in 2024. The process was finalised in early 2025 when it was announced that Kazakhtelecom sold its Mobile Telecom Service subsidiary to Qatar’s Power International Holding.

Sources: Kazakhtelecom (2023[1]), Overview of the 2023 telecoms market, https://ar2023.telecom.kz/en/overview-of-the-telecommunications-market-in-2023.html; Dicheva (2025[2]), News: Kazakhtelecom completes Tele2/ALTEL sale to Power International Holding (PIH), https://www.towerxchange.com/article/2ebcafxcgqm6kbv17d0qo/news-kazakhtelecom-completes-tele2-altel-sale-to-power-international-holding-pih; Tele2 Group (2015[3]), Tele2 and Kazakhtelecom to combine mobile operations in Kazakhstan, https://www.tele2.com/media/news/2015/tele2-and-kazakhtelecom-to-combine-mobile-operations-in-kazakhstan/; Reuters (Reuters, 2018[4]), Kazakhtelecom buys 75 pct stake in Kcell from Telia, Turkcell, https://www.reuters.com/article/markets/kazakhtelecom-buys-75-pct-stake-in-kcell-from-telia-turkcell-idUSL8N1YH16S/; The Astana Times (2019[5]) Tele2 AB telecom operator to leave Kazakh market, https://astanatimes.com/2019/01/tele2-ab-telecom-operator-to-leave-kazakh-market/; Fitch Ratings (2021[6]), Kcell Stake Sale Neutral for Kazakhtelecom's, Kcell's Ratings, https://www.fitchratings.com/research/corporate-finance/kcell-stake-sale-neutral-for-kazakhtelecom-s-kcell-ratings-05-10-2021; Mobile World Live (2009[7]), Tele2 buys majority stake in Kazakhstan’s NEO, https://www.mobileworldlive.com/europe/tele2-buys-majority-stake-in-kazakhstans-neo/; Power International Holding (2025[8]), Power International Holding (PIH) completes the acquisition of Mobile Telecom – Service LLP (MTS), https://powerholding-intl.com/2025/01/14/power-international-holding-pih-completes-the-acquisition-of-mobile-telecom-service-llp-mts-from-kazakhtelecom-jsc/; Annual Report on Competition Policy Developments in Kazakhstan: 2023 (2024[9]), DAF/COMP/AR(2024)47.

6.1.2. Competitive neutrality

In Kazakhstan’s competition law generally treats private enterprises and SOEs equally. Some rules affect competitive neutrality however. For instance, article 41 of the Budget Code4 allows the government to assign SOEs certain public services or implement budgetary investment projects. These include areas, such as aerospace activities, environmental protection, education, science, healthcare, culture and tourism, geologic studies, construction and maintenance of public roads (list not exhaustive). The state-assignment procedure is non-competitive, and bypasses all public procurement rules. Although the law requires the Agency to issue an opinion regarding a particular state assignment, the entire concept is anti-competitive.

Further, according to the Agency, SOEs often have access to budgetary funds or other forms of state support, such as subsidies or preferential tax treatment. OECD has been informed by stakeholders that SOEs often benefit from tax exemptions, as well as receive loans at far lower rates than private companies, making it difficult to compete on a level playing field.

On the other hand, there are practices working in an opposite direction. In tenders where two private firms and an SOE participate, the SOE is automatically excluded. According to the Agency, the rationale of this practice is to reduce the state’s role in the economy. However, this practice also restricts competition as it excludes a competitor and may increase the incentives of private firms to collude.

Practical aspects of competitive neutrality are also lacking in Kazakhstan. Interviews with stakeholders revealed that most agents, including staff at the Agency, are not familiar with the term ‘competitive neutrality’, nor with the OECD work on this topic.

6.2. State monopolies and special rights

6.2.1. Defining state monopolies and special rights

In areas where the sale of goods in a competitive market “may have a negative impact” on the constitutional order, national security, public order, human rights and freedoms, and public health, the state has a right to restrict competition. This can be done in one of two ways:5

• through an exclusive right of the state to produce, sell and/or purchase a specific product (state monopoly), or

• through granting an exclusive right to produce, sell and/or purchase a specific product to a market entity (special right), market entities granted this special right are known as single or national operators, designated authority.

State monopoly entities must be state enterprises established by the government of Kazakhstan. Special right entities (single operators) may be state enterprises, joint stock companies or limited liability companies in which the state directly or indirectly owns 100% of shares.

Initially, only state monopolies were regulated in the Entrepreneur Code. According to the Agency, state bodies began granting existing market entities exclusive (special) rights to sell certain products to avoid public procurement procedures. These single operators functioned similarly to state monopolies; however, they were not subject to the same regulatory requirements. In 2021, an analysis by the Agency found that more than 50 market entities had been granted special rights. As part of the 5^th antimonopoly package, the amendments were made to the Entrepreneur Code, introducing the notion of a “special right” and applying the regulatory regime for state monopolies to single operators. Some examples are illustrated in Box 6.3.

Box 6.3. Examples of single operators in Kazakhstan

E-Finance Center JSC

The company provides IT solutions for public authorities and organisations in the field of state finance. It has been designated by the Ministry of Health as the single operator in the field of procurement of medicines and medical devices in 2021. In line with Article 249 of the Law on the Health of the People and the Healthcare System, it has the responsibility of developing and maintaining a web portal for procurement of medicines and medical devices.

Institute of Legislation and Legal Information of the Republic of Kazakhstan

The company is state-owned and provides assistance in development of legislative and regulatory acts, carries out comparative studies and provides the service of analysing the effectiveness of legislation. It has been designated as a single operator for, inter alia, conducting linguistic examination of draft legislation, maintaining the state register of regulatory acts and examining draft international treaties.

Sources: E-Finance Center, About us, https://www.ecc.kz/en/company/about; Institute of Legislation and Legal Information of the Republic of Kazakhstan, About the institute, https://www.zqai.kz/ru/about; State Register of subjects of state monopoly and special right, Code of the Republic of Kazakhstan dated 7 July 2020, no. 360-VI ZRK.

6.2.2. Regulatory framework for state monopoly entities and single operators

When granting state monopoly or special rights, the state must notify market entities at least six months in advance. Within the next six months, other market entities still have the right to sell the product. Additionally, other market entities must be compensated for the damage resulting from the introduction of a state monopoly or single operator.6

The functioning of state monopoly entities and special rights is likewise regulated. Their activities are limited to the sphere which was designated to them. Other activities are strictly prohibited, except in times of natural disasters and other emergencies. State monopoly entities and holders of special rights cannot own shares in other legal entities, and they cannot assign rights related to state monopoly or special right. The Agency is responsible for monitoring compliance with these regulatory requirements and in case of two or more violations or in case of abuse of its monopoly position, may withdraw the special rights held by entities.

State monopolies and special rights are subject to price examinations (control) carried out by the Agency.7 In setting the price, they must adhere to special pricing rules.8 Essentially, they are required to form the price based on planned costs which include only costs directly related to the production or provision of goods, works or services (e.g. material costs, repair costs, employee remuneration and interest expenses). The Agency has the power to examine whether the prices are in line with the rules. For the purposes of monitoring, the state monopoly entity and single operator must submit at least 30-days’ notice of planned price changes and provide materials that substantiate grounds for such change.

The Agency annually analyses the activities of state monopoly entities and special rights and can make proposals to the government to transfer some of these activities to a more competitive environment.

6.2.3. Recent developments and impact on competition

The use of single operators has become increasingly frequent which is, given their monopolising nature, concerning from a market competition point of view. The government continues to create single operators (Elizarov, 2025[10]). For instance, in December 2024, the government created a single operator for the gambling accounting system9 and announced that a new single operator would be established for aviation fuel.10 Granting special rights eliminates competition and should only be used in exceptional cases. Kazakhstan’s practice does not seem to follow this principle.

As the use of single operators is growing, it seems that the Agency is unable to monitor all the changes. The Agency maintains a register of state monopoly entities and single operators however, even upon its introduction, the register did not include all the single operators identified by the Agency in its prior analysis. As of January 2025, 18 state monopoly entities and 22 single operators were registered.11 However, this does not accurately reflect the total number of single operators in Kazakhstan (Elizarov, 2025[10]).

While the regulation of single operators increasingly takes the form of price control, it may be a necessary consequence of closing the market by granting of special rights which artificially create monopolies. In most cases, price control is a ‘second-best’ solution and definitely not the ‘first-best’. To the benefit of consumers, and both upstream and downstream markets, markets should be opened to competitors, as market mechanisms should reduce the need for rigorous price control. Additionally, competition authorities are generally ill-suited to carry out price control on top of their competition enforcement and advocacy activities.

6.3. Natural monopolies

6.3.1. Defining natural monopolies

The 2018 Law on Natural Monopolies12 defines natural monopoly as a state of the market in which the creation of competitive conditions to meet the demand for a certain type of goods, works or services is impossible or not “economically viable”. This may be because of technological features of production or provision of this type of goods, works or services.13 This differs from the text-book understanding of a natural monopoly where only one operator is possible owing to some natural feature. The law further provides an exhaustive list of ‘regulated services’, also deemed natural monopolies;

1. transportation of oil and oil products through main pipelines (except transit and export)

2. transportation or raw gas through connecting gas pipelines, transportation of commercial gas through interconnectors, main gas pipelines and gas distribution systems (except transit and export), storage of commercial gas

3. transmission of electric energy

4. production, transmission, distribution and supply of thermal energy (except if generated through soil and water)

5. technical dispatching of electricity supply to the grid and consumption

6. balancing production and consumption of electric energy

7. main railway networks

8. transportation through railways under public-private partnership (in absence of alternatives)

9. local roads (in absence of alternatives)

10. air navigation (except for international and transit flights)

11. ports (in absence of alternatives)

12. airports (except for transit and international flights)

13. provision of cable sewerage for property lease or use (except for activities of small businesses)

14. water supply and wastewater disposal.

Telecommunications and postal services were removed from this list in 2017.14 It is noticeable that many of these sectors have been opened to competition across the OECD and other jurisdictions since the 1990s, or at least seen structural separation, to allow for competition in some of the market segments. All market entities providing regulated services are registered in the State Register of Subjects of Natural Monopolies. A market entity can apply to the Committee for Regulation of Natural Monopolies for inclusion in the register. Indeed, there are no legal criteria to add more sectors to the list. If successful, the market entity can become a natural monopoly and provide regulated services. This seems a highly anti-competitive practice, limiting market competition where there may be a market. It would be useful to review this practice and identify markets where a competitive tender may attract outside competition.

Box 6.4. Kazakhstan’s gas sector as a natural monopoly example

Kazakhstan’s gas sector is highly centralised and state dominated. The main actor is the JSC National Company “QazaqGaz”, a vertically integrated state-owned gas company operating on multiple levels of the value chain from exploration and production of natural gas through transportation and distribution of gas to the sale to consumers. QazaqGaz was established in 2000 under the name of KazTransGaz as a subsidiary of the national oil company KazMunaiGas. In 2021, the ownership was transferred to the Kazakh holding company Samruk-Kazyna and the company was rebranded as QazaqGaz. Many subsidiaries of QazaqGaz exist and operate in specific parts of the value chain.

QazaqGaz is designated as the national operator in the gas sector. In line with Article 15 of the Law on Gas and Gas Supply, this gives QazaqGaz a preferential right to purchase raw and commercial gas from subsoil users, as the designated single operator. Notably, the prices at which QazaqGaz purchases gas are heavily regulated, often to an extent that the subsoil users find the sale of gas to be unprofitable.

Transportation of raw and commercial gas through pipelines and gas distribution systems are considered natural monopolies and are hence subject to regulation by the Committee for Regulation of Natural Monopolies, including tariff formation and approval. Natural monopoly entities carrying out the transportation part of the value chain are companies such as JSC “Intergas Central Asia”, JSC “KazTransGaz Aimak”, LLP “Beineu-Shymkent Gas Pipeline”, and LLP “Asian Gas Pipeline”, all subsidiaries of QazaqGaz.

On the wholesale level, commercial gas can be sold by the national operator, producers of commercial gas, and owners of commercial gas. Due to QazaqGaz’s pre-emptive right, it dominates the wholesale market. As reported by the Agency, 95% of commercial gas was sold on the wholesale market by QazaqGaz in 2021. While the wholesale market is not considered a natural monopoly anymore, it is still subject to price regulation in the form of maximum prices (see 6.4.).

On the retail level, commercial gas can be sold by gas distribution organisations (GDOs), owners of auto-gas filling compressor stations or producers of commercial gas (in case of sale to industrial consumers connected to the main pipeline). A market analysis conducted by the Agency in 2023 showed that 28 GDOs operated in Kazakhstan at that time. Nonetheless, competition issues from the upstream markets seem to be translated into the retail market. The Agency noted in its 2022 annual report that 90% of gas purchased by QazaqGaz under its pre-emptive right is sold in the retail market by its subsidiary KazTransGaz Aimak. Further, in its 2023 annual report, the Agency found that KazTransGaz Aimak has a monopoly in the retail market in 10 out of 17 gasified regions in Kazakhstan. Retail market is not considered a natural monopoly; however, it has been designated as a socially significant market and price regulation in the form of maximum prices applies as well.

Sources: QazaqGaz, General Information, https://qazaqgaz.kz/en/obshchaya-informaciya; Satubaldina, (2023[11]), Gas Dilemma: Abundant Gas Industry in Kazakhstan Faces Critical Challenges, https://astanatimes.com/2023/04/gas-dilemma-abundant-gas-industry-in-kazakhstan-faces-critical-challenges/; Agency’s 2022 and 2023 annual reports (Kazakhstan, 2024[9]; 2023[12]); Law of the Republic of Kazakhstan dated 9 January 2012, no. 532-IV; Article 23 of the Law on Gas and Gas Supply.

6.3.2. Committee for Regulation of Natural Monopolies

The relationship between competition policy and natural monopoly regulation has undergone multiple institutional changes. When natural monopoly regulation was introduced in 1998, oversight was assigned to the competition authority. In 2004, protection of competition was separated, and the Agency for Regulation of Natural Monopolies was created.15 In 2014, they were merged again under the Ministry of National Economy within a joint committee, KREMZK. In 2019, KREMZK was split into three committees, including one for competition and one for natural monopolies. In 2020, the Agency was established as an independent body, and the Committee for Regulation of Natural Monopolies stayed in the Ministry.

The Committee for Regulation of Natural Monopolies (hereinafter, ‘Committee) oversees state policy, including tariff setting, standard contracts, quality indicators, compliance enforcement, and maintaining the State Register of Subjects of Natural Monopolies. Structurally similar to the competition agency, it has a central office and 20 regional offices, led by a Chair, Deputies and Regional Heads.16^,17

6.3.3. Regulatory framework for natural monopolies

Regulation of tariffs

The central piece of the natural monopoly regulation is the regulation of tariffs. Natural monopoly entities must calculate their tariffs in accordance with the Rules on tariff formation adopted by the Ministry of National Economy.18 Subsequently, they are required to submit an application for approval of the tariff to the Committee. These are monitored by the Competition Agency, which is also in charge of monitoring the conduct of the single operator.

The law recognises four distinct methods of tariff formation:

• The cost method determines the tariff by establishing economically justified costs and profits.

• The incentive method determines the tariff by taking into account the quality and reliability of regulated services and performance indicators of natural monopolies.

• The indexation method determines the tariff for small-capacity natural monopoly entities by indexing the approved tariff not higher than the level determined by the Committee.

• The method of tariff formation based on the public-private partnerships (PPPs) sets the tariffs above necessary costs and ensures the return of investment and a level of profitability in accordance with the feasibility study of the draft public-private partnership agreement.

Tariff approval duration depends on the method. Cost and incentive-based tariffs are approved for five years, indexation-based tariffs annually, and PPP-based tariffs for the PPP duration or less. Given market fluctuations and input cost uncertainty, five years may be excessively long, even if intended to protect consumer purchasing power. The approved tariff can be changed prior to its expiration only in exceptional cases, such as changes in wages, production costs, tax rates, declaration of emergency etc.

Obtaining consent for certain actions

Natural monopoly entities are required to obtain consent from the Committee for:

• entering transactions with property used for the provision of regulated services (if the book value of the property exceeds 0.05% of the book value of entity’s assets)

• reorganisation or liquidation.

Prior to these actions, the natural monopoly entity must submit an application to the Committee. Consent is refused if the actions result in an increase in tariffs, decrease in quality of the regulated service, breach of contract with consumers, infringement of rights and legitimate interests of consumers, or if the documents provided are incomplete or inaccurate.

Mandatory services

The Entrepreneur Code also contains some regulatory norms in this field. The distinction in a legal source also has an institutional consequence – the powers of enforcing these norms are conferred to the Agency (instead of the Committee). According to Article 163-1 of the Entrepreneur Code, natural monopoly entities and quasi-public sector entities19 are required to provide mandatory services to individuals and legal entities.

Mandatory services are activities of natural monopoly entities and quasi-public entities, which are mandatory for individuals and legal entities in accordance with Kazakhstan’s legislation and confirm their right to carry out their activities.20 Mandatory services relate to the provision of documents, e.g. issuance of permits, technical specifications and certificates. A detailed list of mandatory services21 was adopted by the Agency and includes issuance of technical specifications for connection to power grids and issuance of permits for work in the protected zone of the main pipeline amongst others.

The Agency is responsible for adopting a list of mandatory services and the rules22 for the provision of mandatory services. As the mandatory services seem removed from the concept of market competition and competition law enforcement, it is unclear why the Agency has power in this area.

6.4. Price regulation

Kazakhstan has an extensive price control system in place. Prices are not only regulated in markets of state monopolies and natural monopolies but in numerous other markets as well. Price regulation takes various forms, including maximum prices, minimum prices and price-setting formulas. Table 6.1 presents a list of some of the goods and services subject to price regulation in Kazakhstan.23

Table 6.1. Product markets subject to price regulation in Kazakhstan

Product market	Type of price regulation
Socially significant food products (e.g. wheat flower, wheat bread, rice, potatoes, onions, white sugar, sunflower oil, beef, chicken, milk, butter, chicken eggs and salt)	maximum prices
Goods and services provided by natural monopoly entities	price-setting formula (subject to approval)
Goods and services sold by state monopoly entities and special right entities	price-setting formula (subject to monitoring)
Oil products (on a retail and wholesale level)	maximum prices
Medical products	maximum prices
Vodka, strong liquor, cognac and brandy	minimum prices
Cigarettes, cigarillos and products with heated tobacco	minimum prices
Goods and services in markets not considered natural monopolies in times of emergencies, natural disasters, for national security reasons	maximum prices
Commercial and liquefied petroleum gas	maximum prices
Raw and commercial gas purchased by the national operator on grounds of state’s pre-emptive right	price-setting formula
Products of energy producers	maximum prices
Subsidised services in the fields of mail, communications and transportation	maximum prices
Goods and services in ‘socially significant markets’, including retail sale of electricity and commercial gas, airport services in domestic flights and rail transportation	maximum prices
Property lease for placement of communication facilities and laying fibre-optic communication lines	maximum prices

Sources: Article 116 of the Entrepreneur Code and various executive acts on price regulation for individual categories; Order of the Deputy Prime Minister - Minister of Trade and Integration of the Republic of Kazakhstan dated 11 May 2023, no. 166-НҚ.

The price control is not centralised, as there are many different state bodies involved in price regulation. For instance, prices of some medicines are regulated by the Ministry of Health, maximum producer prices for electricity are regulated by the Ministry of Energy, while maximum retail electricity prices and tariffs for natural monopolies are regulated by the Committee for Regulation of Natural Monopolies. Additionally, local bodies sometimes have the power of price control, e.g. for determining maximum prices of socially significant food products.

The Agency engages in many price regulation activities. We divide these activities into two main groups: direct price regulation and indirect price regulation.

Direct price regulation relates to instances where the Agency has the power to set and/or approve prices in the markets. The main direct price regulation power is over the prices of state monopoly entities and single operators (see section 6.2.2) where the Agency sets the rules for price-setting and monitors compliance with these rules. The second direct price regulation area is price regulation in times of emergencies and natural disasters.24 Temporary price control in the form of maximum prices can be imposed on a product market as a whole or on individual market entities. In the latter case, the Agency requests documents from the market entity in question so that it can tailor the price to its specific circumstances, including costs and a certain level of profit necessary, for instance, for further investments. The Agency can temporarily regulate prices upon a decision of the President or Prime Minister, as well as on its own initiative. At the end of 2020, following the COVID-19 pandemic, the Agency became a co‑regulator in the pricing system for pharmaceuticals and medical products. Currently, prices for 6 060 pharmaceuticals are regulated.

Indirect price regulation relates to instances where the Agency does not itself set prices but can nonetheless influence price-setting. Two mechanisms of indirect price regulations are essentially used by the Agency. Firstly, competition enforcement tools are frequently used, particularly provisions on the abuse of a dominant or monopoly position. The concept of monopoly high prices is very wide, hence it can (and is) used by the Agency to monitor and investigate price increases (see section 4.4.3.). This puts pressure on the companies not to raise prices which indirectly constitutes price control. Secondly, the Agency has the power to recommend to the government sector of the economy where price regulation should be introduced. We have learned from the stakeholder consultations that the Agency has recently proposed to introduce price regulation for the sale of coal to energy-producing organisation and for the provision of services technologically related to regulated services of natural monopolies.25

Moreover, the Agency also informed the OECD that one additional method of indirect state regulation in trade activities is the establishment other non-tariff regulation measures in foreign trade, such as bans and phytosanitary restrictions in the agro-industrial sector, to further influence price movements.

While price regulation is generally at attempt to protect consumers’ purchasing power or, at times, to support domestic industry, it is nonetheless market distorting. In Kazakhstan price regulation seems to be not only pervasive but also applied to an increasing number of goods and sectors. Moreover, the granting of exclusive rights, which also appears to be on the rise, appears to, at best, offset and at worst, undermine the privatisation efforts, which, if carried out successfully could foster a more competitive regime which would gradually eliminate the need for price regulation.

There appears to be a conflation of the roles of the Agency, whose primary purpose should be to enforce competition law, in order to support an active market economy to the benefit of consumers, rather than regulate prices by direct or indirect measures. Price regulation should be limited in scope and time, and should be assigned to relevant regulators.

The Agency notes that the Government of the Republic of Kazakhstan has developed a series of legislative amendments aimed at eliminating the establishment of threshold and maximum permissible retail prices for socially important food products, with their entry into force scheduled for 31 December 2025. These changes should reduce direct government intervention in setting prices for essential foodstuffs, while maintaining oversight to prevent unjustified price increases through other market mechanisms (such as regulating trade markups).

6.5. Commodity exchanges

Apart from regulation of state monopolies, natural monopolies and prices of some additional market, there are some other ways in which the state is involved in business processes. One of these is the establishment of commodity exchanges.

Commodity exchanges are platforms for trading certain types of goods. Trading is initiated with electronic applications submitted to the electronic trading system and carried out either by dealers in auctions, or through brokers. In line with article 6 of the Law on Commodity Exchanges,26 commodity exchanges are organised as joint-stock companies and provide organisational and technical support for exchange trading.

Currently, eight commodity exchanges are operational in Kazakhstan – five are standardised (wheat, cement, sugar, coal and petroleum products) and three are non-standardised (specialised machinery, equipment and spare parts). In 2024, the total value of transactions concluded through commodity exchanges amounted to 1.9 trillion KZT (around 4 billion USD). The Agency was assigned several responsibilities in relation to commodity exchanges.27 These responsibilities are carried out by the Department of Exchange Control. Firstly, the Agency issues licences to commodity exchanges, granting them the right to carry out exchange trading. Secondly, the Agency monitors the activities on commodity exchanges and supervises compliance of these activities with the legislation of the Republic of Kazakhstan, including compliance with the prohibition of money laundering and terrorist funding. Thirdly, the Agency co‑ordinates and participates in the preparation of legislative amendments for commodity exchanges.

The Department of Exchange Control performs numerous tasks related to commodity exchanges aimed at ensuring equal access to trading for all interested parties, owing to the nature of the goods exchanged there (such as coal, petroleum products, etc.), and also at ensuring competition within the trading process itself. However, none of these functions are related to competition enforcement. According to the Agency, the development of exchange trading in Kazakhstan is focused not on fostering competition among commodity exchanges themselves (in the past, up to 23 “pocket” exchanges existed in Kazakhstan), but rather on enhancing competition among the actual participants in exchange trading.

It is questionable why the Agency as a competition enforcer should grant licences, monitor access, as well as other aspects such as money laundering and terrorist financing on commodity exchanges, and similar activities. These are responsibilities suitable for a regulator and not for the competition authority, demonstrating once again how the competition authority in Kazakhstan in increasingly being understood as an overall market regulator rather than a competition enforcer.

Kazakhstan plans to expand commodity exchanges to more products in the future.

6.6. State support measures for private entrepreneurship

Kazakhstan has a state support system in place to stimulate the development of private entrepreneurship.28 The state support system targets SMEs, agricultural activities, innovative and creative activities, investment activities, domestic manufacturing, housing, tourism, special economic zones and industrial zones.29 State policy in the field of state support measures is implemented by the Ministry of National Economy of the Republic of Kazakhstan.

The state support system in Kazakhstan envisages four types of support measures for private entrepreneurship:30

1. Financial support: There are many measures of financial support provided by the state, for instance (i) issuance of state grants, (ii) provision of state loans, (iii) subsidy of interest rates on loans or coupon interest on bonds, (iv) reimbursement or subsidisation of expenses, (v) partial guarantee for loans, and (vi) purchase of a guaranteed volume of goods. Financial support is provided by a special entrepreneurship development fund.

2. Infrastructural support: It includes assistance in organising the business, provision of legal assistance, marketing, management, as well as support in providing material, technical, financial, and other resources commercially. Within infrastructural support, business service centres and business incubators are established.

3. Institutional support: The state creates institutions for support and development of private entrepreneurship, including research institutes studying problems and proposing solutions for development of entrepreneurship.

4. Non-financial support: It includes organisation of training seminars, distribution of methodological manuals and dissemination of analytical information, promotion of advances foreign technologies, support in promotion of domestic goods for export, popularising private entrepreneurship etc.

As state support measures can distort competition, the Agency has the power to approve the introduction of new state support measures as well any draft regulation determining the state support procedure. Further, the Agency has the power to monitor the awarding of state support, particularly with regards to providing equal access to state support measures for all market entities. If the Agency finds a violation, it follows the enforcement procedure for anti-competitive actions of public authorities (Article 194) first by sending a notification to the public authority and, ultimately, by opening an investigation potentially resulting in administrative liability.

In a few recent cases, the Agency found favouritism and competitive advantages for some market entities in the process of awarding state support measures. For instance, priority and accelerated review of applications were identified as potential violations. The Agency sent notifications to state support operators where signs of violations were detected.

However, there seems to be no application of the principles of competitive neutrality across the government which would support the Agency’s work. In agriculture, for instance, local producers receive substantial subsidies which makes other producers uncompetitive. Such selective nature of state support measures creates barriers to competition.

References

[2] Dicheva, N. (2025), News: Kazakhtelecom completes Tele2/ALTEL sale to Power International Holding (PIH), https://www.towerxchange.com/article/2ebcafxcgqm6kbv17d0qo/news-kazakhtelecom-completes-tele2-altel-sale-to-power-international-holding-pih.

[10] Elizarov, M. (2025), The government stubbornly ignores the president’s ban on the creation of single operators, https://exclusive.kz/pravitelstvo-uporno-ignoriruet-zapret-prezidenta-na-sozdanie-edinyh-operatorov/ (accessed on 3 February 2025).

[6] Fitch Ratings (2021), Kcell Stake Sale Neutral for Kazakhtelecom’s, Kcell’s Ratings, https://www.fitchratings.com/research/corporate-finance/kcell-stake-sale-neutral-for-kazakhtelecom-s-kcell-ratings-05-10-2021.

[9] Kazakhstan (2024), Annual Report on Competition Policy Developments in Kazakhstan: 2023, https://one.oecd.org/document/DAF/COMP/AR(2024)47/en/pdf.

[12] Kazakhstan (2023), Annual Report on Competition Policy Developments in Kazakhstan: 2022, https://one.oecd.org/document/DAF/COMP/AR(2023)47/en/pdf.

[1] Kazakhtelecom (2023), Overview of the 2023 telecoms market, https://ar2023.telecom.kz/en/overview-of-the-telecommunications-market-in-2023.html (accessed on 5 March 2025).

[7] Mobile World Live (2009), Tele2 buys majority stake in Kazakhstans NEO, https://www.mobileworldlive.com/europe/tele2-buys-majority-stake-in-kazakhstans-neo/.

[8] Power International Holding (2025), Power International Holding (PIH) completes the acquisition of Mobile Telecom – Service LLP (MTS) from Kazakhtelecom JSC, https://powerholding-intl.com/2025/01/14/power-international-holding-pih-completes-the-acquisition-of-mobile-telecom-service-llp-mts-from-kazakhtelecom-jsc/.

[4] Reuters (2018), Kazakhtelecom buys 75 pct stake in Kcell from Telia, Turkcell, https://www.reuters.com/article/markets/kazakhtelecom-buys-75-pct-stake-in-kcell-from-telia-turkcell-idUSL8N1YH16S/.

[11] Satubaldina, A. (2023), “Gas Dilemma: Abundant Gas Industry in Kazakhstan Faces Critical Challenges”, The Astana Times, https://astanatimes.com/2023/04/gas-dilemma-abundant-gas-industry-in-kazakhstan-faces-critical-challenges/ (accessed on 5 March 2025).

[3] Tele2 Group (2015), Tele2 and Kazakhtelecom to combine mobile operations in Kazakhstan, https://www.tele2.com/media/news/2015/tele2-and-kazakhtelecom-to-combine-mobile-operations-in-kazakhstan/.

[5] The Astana Times (2019), Tele2 AB telecom operator to leave Kazakh market, https://astanatimes.com/2019/01/tele2-ab-telecom-operator-to-leave-kazakh-market/.

Notes

← 1.  Decree of the Government of the Republic of Kazakhstan dated 28 December 2015, no. 1095.

← 2.  Decree of the President of the Republic of Kazakhstan dated 8 May 2024, no. 542.

← 3.  Decree of the Government of the Republic of Kazakhstan dated 21 August 2024, no. 678.

← 4.  Code of the Republic of Kazakhstan dated 4 December 2008, no. 95-IV.

← 5.  Article 193 of the Entrepreneur Code.

← 6.  Article 193(10) of the Entrepreneur Code.

← 7.  Article 120 of the Entrepreneur Code.

← 8.  Order of the Minister of National Economy of the Republic of Kazakhstan dated 15 March 2016, no. 134.

← 9.  Decree of the Government of the Republic of Kazakhstan dated 20 December 2024, no. 1087.

← 10.  See https://vlast.kz/novosti/63181-mintransporta-planiruet-opredelit-edinogo-operatora-po-aviatoplivu-dla-resenia-problemy-deficita.html.

← 11.  See https://www.gov.kz/memleket/entities/zk/documents/details/781858?lang=ru.

← 12.  Law of the Republic of Kazakhstan dated 27 December 2018, no. 204-VІ ZRK.

← 13.  Article 4 of the Law on Natural Monopolies.

← 14.  Law of the Republic of Kazakhstan dated 28 December 2016, no. 34-VI.

← 15.  Decree of the President of the Republic of Kazakhstan dated 29 September 2004, no. 1449.

← 16.  Order of the Minister of National Economy of the Republic of Kazakhstan dated 29 July 2019, no. 190.

← 17.  Article 8 of the Law on Natural Monopolies.

← 18.  Order of the Minister of National Economy of the Republic of Kazakhstan dated 19 November 2019, no. 90.

← 19.  Quasi-public entities are state enterprises, limited liability partnerships, joint-stock companies, including national management holdings, national holdings, national companies, whose founder or shareholder is the state. In its essence, the term coincides with SOEs.

← 20.  Article 163-1(2) of the Entrepreneur Code.

← 21.  Order of the Chair of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan dated 12 July 2023, no. 9.

← 22.  Order of the Minister of National Economy of the Republic of Kazakhstan dated 16 January 2019, no. 6.

← 23.  Article 116 of the Entrepreneur Code.

← 24.  Order of the Minister of National Economy of the Republic of Kazakhstan dated 16 June 2016, no. 262.

← 25.  Draft Law on Amendments and Supplements to Certain Legislative Acts of the Republic of Kazakhstan on Competition Issues.

← 26.  Law of the Republic of Kazakhstan dated 4 May 2009, no. 155-IV.

← 27.  Article 4-3 of the Law on Commodity Exchanges.

← 28.  Article 91 of the Entrepreneur Code.

← 29.  Article 92 of the Entrepreneur Code.

← 30.  Articles 93–97 of the Entrepreneur Code.