On the registration of pledge of movable property

The Law of the Republic of Kazakhstan dated 30 June, 1998 No. 254

Unofficial translation 

      This Law establishes the rules for registration of pledge of movable property to fulfill and protect the rights of individuals and legal entities with legal rights to the property.

Chapter 1. General Provisions

Article 1. Basic concepts used in this Law

      The following basic concepts are used in this Law:
      1) movable property - vehicles, goods in circulation, securities, money, property rights, including the right to future products and other property, not referred as real estate by the legislative acts of the Republic of Kazakhstan;
      2) registration of pledge of movable property – the procedure for accounting the pledge of movable property by the registering body and (or) the real estate center, that is a set of actions of participants of the relations, arising from registration of pledge of movable property for inclusion the information contained in the pledge agreement or other agreement, containing the pledge conditions in the register of pledge of movable property (an application for registration of pledge), issuance of a certificate for registration of pledge of movable property and other acts of registration bodies and (or) real estate centers, committed according to the procedure, established by this Law and other legislative acts of the Republic of Kazakhstan;
      3) the bodies for registration of pledge of movable property (registration bodies) - state bodies and legal entities, authorized by the legislative acts of the Republic of Kazakhstan to register the certain types of movable property, subject to the state registration, and the pledged of this property;
      4) the certificate for registration of pledge of movable property - a document, issued by the registering body and (or) the real estate center to the applicant, and confirming the registration of pledge of movable property;
      5) a register of pledge of movable property (pledge registry) - a system of registration and storage of information, carried by the registration bodies and (or) the real estate centers in accordance with the legislation of the Republic of Kazakhstan;
      6) the applicant - the person, filing the application for registration of the pledge to the registering body and (or) the real estate center; both a pledger and a pledgee can be the applicant by the agreement of parties on pledge obligations;
      7) a registered pledge - a pledge of movable property that is registered in the manner prescribed by this Law;
      8) the authorized organization (hereinafter – the real estate center) – the Republican state-owned public enterprises that register pledges of movable property, that are not subject to compulsory state registration of legal entities and individuals.
      Footnote. Article 1 is in the wording of the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first publication).

Article 2. The legislation of the Republic of Kazakhstan on the registration of pledge of movable property

      The legislation of the Republic of Kazakhstan on the registration of pledge of movable property is based on the Constitution of the Republic of Kazakhstan, the norms of international treaties, ratified by the Republic of Kazakhstan and consists of this Law and other regulatory legal acts of the Republic of Kazakhstan.

Article 3. Participants of relations, arising from the registration of pledge of movable property

      1. Participants of relations during the registration of pledge of movable property shall be:
      1) a pledger, a pledgee;
      2) registration bodies;
      2-1) real estate centers;
      3) a third party.
      2. General direction and control over the activities of the registration bodies and (or) the real estate centers are carried out by the Ministry of Justice of the Republic of Kazakhstan and other state bodies, and the activities of legal entities, involved in the registration of pledges with certain types of movable property – by the state body, authorized by the legislation.
      Footnote. Article 3, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first publication).

Article 4. Registration of pledge of movable property, that subject to the compulsory state registration

      1. Registration of pledge of movable property, that subject to the compulsory state registration shall be carried out in accordance with the legislation by the body, authorized to carry out the registration of the property.
      2. Procedure for registration of pledge of movable property that subject to state registration is established by the Government of the Republic of Kazakhstan.
      3. Types of property, ownership right and other rights, pledges of which shall be subject to registration, as well as the bodies, carrying out its registration, are determined by legislative acts of the Republic of Kazakhstan.

Article 5. State monopoly in the field of registration of pledge of movable property that not subject to the compulsory state registration

      Footnote. Title of Article 5 is in the wording of the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first publication).

      1. Activities for registration of pledge of movable property that not subject to the compulsory state registration, provision of information services in the form of issuing an extract from the register of pledge of movable property, correcting errors in the registration documents, admitted by the fault of the applicant, are referred to the state monopoly and carried out by the real estate centers.
      1-1. Pledge of movable property, that not subject to the compulsory state registration must be registered:
      1) at the request of one of the parties of the pledge agreement or other agreement, containing the pledge conditions;
      2) if the pledge agreement or other contract, containing a condition of pledge, prohibits the subsequent pledge (surcharge) of the property, that is in the pledge.
      2. Registration of pledge of movable property that not subject to compulsory registration, are provided:
      1) at the place of registration of the legal entity, if the pledger is a legal entity;
      2) at the place of registration as a taxpayer, if the pledger is an individual, including an individual entrepreneur, or legal entity-resident.
      3. Real estate centers shall keep the register of the registered pledge of movable property that not subject to the compulsory state registration.
      4. Ministry of Justice of the Republic of Kazakhstan, as well as the state bodies, authorized to register the certain types of pledge of movable property, within the limits of power, granted by the Law, shall have the right to publish departmental regulations, establishing the rules and procedures for the registration of pledge of movable property.
      5. Prices of goods (works, services), produced and (or) sold by the subject of state monopoly are established by the Government of the Republic of Kazakhstan.
      Footnote. Article 5, as amended by the Laws of the Republic of Kazakhstan dated 27.04.2012 No. 15-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Article 6. Specific aspects of pledge registration of certain types of movable property

      1. Registration of pledge of equity securities is carried out in accordance with the legislative acts of the Republic of Kazakhstan on the registration of transactions with securities. The rules of Article 8 of this Law shall apply to the registration of pledge of securities, undertaken in accordance with the legislative acts of the Republic of Kazakhstan.
      1-1. Registration of pledge of property, held as collateral for mortgage bonds shall be in accordance with the legislation of the Republic of Kazakhstan.
      2. Registration of pledge of property with significant historical (including archaeological), artistic or other cultural value for society, is carried out in accordance with the legislation.
      3. Pledge of property, held as collateral for mortgage bonds, shall be subject to the compulsory state registration in accordance with the legislative acts of the Republic of Kazakhstan.
      4. Registration of pledge of property, held as collateral for mortgage bonds, shall be made by the registration body only once in the primary address (обращение). The registering body shall keep a registry of pledge.
      Footnote. Article 6 as amended – by the Law of the Republic of Kazakhstan dated 3 June, 2003 No. 427; dated 13 December, 2004 No. 11 (shall be enforced from 1 January, 2005).

Article 7. Rights of individual entrepreneurs, individuals and legal entities for the registration of pledge of property

      At the pledge of movable property, an individual entrepreneur, an individual or a legal entity may register the pledge as a pledger and a pledgee.

Article 8. The legal significance of the registration of pledge of movable property

      1. Registration of pledge of movable property gives priority (date) to meet the requirements of the pledgee with respect to the requirements of other pledgees, claiming the property of the pledger in accordance with the provisions of the Civil Code of the Republic of Kazakhstan and other legislative acts.
      Each previously registered pledgee has priority when ensuring the performance of the obligations to all subsequent registered pledgees, as well as to all unregistered pledgees of this property.
      2. The right of pledge of movable property that subject to the compulsory state registration shall occur after the registration of pledge of movable property in the body, responsible for the registration of the property, unless a later date is not provided by the pledge agreement (or other agreement containing the pledge conditions) or the legislative acts.

Chapter 2. Procedure for registration of pledge of movable property

Article 9. Application for registration of pledge of movable property

      1. An applicant or his (her) representative to register the pledge of movable property shall submit a completed application to the registering body and (or) the real estate center or through the public service center.
      2. The application must contain:
      1) the name of the registering body and (or) the real estate center;
      2) the name, location (for legal entities) or the surname, name and patronymic (if available), the place of residence (for individuals) of pledger and pledgee;
      3) the date and place of the pledge agreement or other agreement containing conditions of the pledge;
      4) a list and description of the property, that is a subject of the pledge (information about the subject of the pledge);
      5) the cash equivalent of the obligation, secured by the pledge;
      6) the validity of the secured obligation;
      7 ) the signature of the applicant or his (her) representative and the seal - for a legal entity;
      8) indication of which party the pledged property is, the permissibility of its use and the information about the surcharge;
      9) the applicant’s e-mail address (if available).
      The application must be accompanied by a document, confirming the payment of the fee for the state registration of pledge of movable property.
      When applying to the registering body and (or) the real estate center or through the public service center, an applicant shall submit an identity document, and a representative of the person - a document, confirming his (her) powers, as well as an identity document.
      3. A pledge agreement and other agreement, containing the pledge conditions shall be submitted with an application, and they after checking the information contained in the application by the registration body and (or) the real estate center, shall be returned to the applicant with the registration mark.
      4. The requirement of any other documents and information, except as provided in this Law, shall not be permitted.
      5. Verification of the information, contained in the application, and the registration of pledge of movable property are carried out by the registration body and (or) the real estate center within two working days of receipt of the application.
      Footnote. Article 9 is in the wording of the Law of the Republic of Kazakhstan dated 08.01.2013 No. 64-V (shall be enforced from 01.01.2013).

Article 9-1. Fee for the state registration of pledge of movable property, changing, additions, and termination of the registered pledge

      For the state registration of pledge of movable property, changing, additions, and termination of the registered pledge is charged a fee in the manner determined by the Tax Code of the Republic of Kazakhstan.
      Footnote. The Law is supplemented by Article 9-1 in accordance with the Law of the Republic of Kazakhstan dated 13.12.2004 No. 11 (shall be enforced from 01.01.2005); as amended by the Law of the Republic of Kazakhstan dated 30.12.2009 No. 234-IV (shall be enforced from 01.01.2009).

Article 9-2. Fee for information services and correcting errors in the registration documents, admitted by the fault of the applicant

      For the provision of information services, as well as for the correction of errors in the registration documents, admitted by the fault of the applicant, by the registering body and (or) the real estate center is charged a fee in accordance with the legislation of the Republic of Kazakhstan.
      Footnote. It is supplemented by Article 9-2 – by the Law of the Republic of Kazakhstan dated 13 December, 2004 No. 11 (shall be enforced from 1 January, 2005); as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Article 9-3. Procedure for electronic registration of pledge of movable property through second-tier banks

      1. In the case if individuals or legal entities conclude a pledge agreement or other agreement, containing information about the pledge with the second-tier bank, the second tier bank with the written consent of the individual or legal entity sends an application, certified by a digital signature of the pledgee, on the registration of the pledge of movable property to the information system of the registration body. Content of the application for registration of the pledge of movable property is determined by paragraph 2 of Article 9 of this Law.
      The application for registration of pledge of movable property is attached with the agreement on the pledge of movable property or other agreement that contains the information about the pledge in the form of electronic document, certified by digital signatures of pledger and pledgee, and the information on the details of the document, confirming the payment of a fee for the state registration of pledge of movable property.
      Registration body within one working day after receipt of the application with attached documents sends to an information system of the pledgee and on the web portal of “electronic government” to the pledger a certificate on the registration of pledge of movable property in the form of an electronic document or a reasoned response to refuse registration, certified by digital signature of the registering body.
      2. Information about the registration is stored in the information systems of second-tier banks and the registering body and does not require the documentary evidence.
      Footnote. Chapter 2 is supplemented by Article 9-3 in accordance with the Law of the Republic of Kazakhstan dated 08.01.2013 No. 64-V (shall be enforced from 01.01.2013).

Article 10. Responsibilities of the registering body and (or) the real estate center

      Footnote. Title of Article 10, as amended by the Law of the Republic dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

      1. On receipt of the required documents, the registration body and (or) the real estate center shall:
      1) issue the applicant a hand receipt, confirming the receipt of the submitted documents, with the date, and time (hours, minutes);
      2) record into the registry of pledge of movable property (including a computer database) the data from the application for registration of the pledge;
      3) issue a certificate of registration of pledge of movable property to the person that submitted the application;
      4) report to the authorized body for financial monitoring the information in accordance with the legislation of the Republic of Kazakhstan on countering the legalization (laundering) of illegally obtained income, and the financing of terrorism.
      2. Registration of pledge of movable property shall be made within two working days of receipt of the documents.
      2-1. Electronic registration of pledge of movable property is made within one working day of receipt of the information system of the registration body the confirmation of payment of fee for the state registration of pledge of movable property or the exemption from payment of fee.
      3. Registering body and (or) real estate center verify the agreement on pledge of movable property exclusively on formal grounds of compliance with Article 307 of the Civil Code of the Republic of Kazakhstan (General part).
      Footnote. Article 10, as amended by the Laws of the Republic of Kazakhstan dated 28.08.2009 No. 192-IV (shall be enforced from 08.03.2010); dated 10.02.2011 No. 406-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication); dated 08.01.2013 No. 64-V (shall be enforced from 01.01.2013).

Article 11. Refusal to register a pledge of movable property

      1. Registering body and (or) real estate center refuse to register a pledge in the following cases, if:
      1) the pledge agreement or other agreement, containing the pledge conditions does not comply with Article 307 of the Civil Code of the Republic of Kazakhstan (General part);
      2) an application for registration of pledge does not meet the requirements of Article 9 of this Law;
      3) inappropriate person addressed with an application for registration of pledge;
      4) there is no document, confirming the payment of fee for the state registration of pledge of movable property and mortgage of the vessel or vessel under construction.
      2. In case of refusal for registration, the registration body and (or) the real estate center send to the applicant a written reasonable refusal with reference to the violation of the legislation within two working days of receipt of the documents.
      3. Refusal to register a pledge of movable property or evasion of registration may be appealed by the interested person in a court.
      4. (is excluded).
      Footnote. Article 11, as amended by the Laws of the Republic of Kazakhstan dated 13.12.2004 No. 11 (shall be enforced from 01.01.2005); dated 11.12.2006 No. 201 (shall be enforced from 01.01.2007); dated 10.02.2011 No. 406-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2012 No. 15-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Article 12. Registry of the registered pledge of movable property

      1. Registry of the registered pledge of movable property must include the following information on the pledge of movable property and the parties of the pledge agreement:
      1) the date, time (hour and minute) of the registration of pledge of movable property;
      2) data on the pledger and the pledgee, their addresses (details);
      3) the registration numbers of documents;
      4) the information about the document, on the basis of which any pledge relationship is arisen;
      5) the date and place of the pledge agreement or other agreement, containing the pledge conditions;
      6) a list and description of the property, that is a subject of the pledge;
      7) the cash equivalent of the obligation that secured by the pledge;
      8) the period of performance of the pledged obligation.
      2. The register of pledge of movable property may include other information on this pledge.
      3. When registering the pledge, held as collateral for mortgage bonds, details of the pledger and the representative of the holders of these bonds are entered in the pledge registry. Data about the pledgees is recorded in the registry of securities holders.
      Footnote. Article 12, as amended – by the Law of the Republic of Kazakhstan dated 3 June, 2003 No. 427.

Article 13. Certificate of registration of pledge of movable property

      1. Registration of pledge of movable property is certified by a certificate of registration that shall contain:
      1) the name of the registering body and (or) the real estate center;
      2) the name, location (for legal entities) or surname, name, patronymic, place of residence (for individuals) of pledger and pledgee;
      3) the date and place of the pledge agreement or other agreement, containing the pledge conditions, and its number;
      4) the cash equivalent of the obligation that secured by the pledge;
      5) the information on the subject of the pledge;
      6) the registration number of the pledge of movable property, assigned by the registering body and (or) real estate center;
      7) the date of registration of the pledge of property.
      2. Certificate of registration of the pledge is signed by an authorized officer and is certified by the seal of the registering body and (or) the real estate center.
      3. At the request of the pledger or pledgee the registering body and (or) the real estate center in respect of certificates they issued, shall produce a duplicate of the certificate for registration of pledge of movable property within two working days instead of lost.
      4. Certificate of registration may be invalidated in court in the case of violation of the legislation of the Republic of Kazakhstan.
      Footnote. Article 13, as amended by the Laws of the Republic of Kazakhstan dated 27.04.2012 No. 15-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.07.2012 No. 34-V (shall be enforced from the date of its first publication).

Article 14. Validity of registration of pledge of movable property

      1. Registration of pledge of movable property shall be valid until the termination of the pledge.
      2. Pledger that performed the obligation, secured by the pledge, shall have the right to demand cancellation of the record on the pledge, in registry of pledge of movable property. At the request of the pledger, the pledgee shall submit to the registration body or the real estate center a written application and necessary documents, proving the fulfillment by the pledger the obligations, secured by the pledge. In case of failure or untimely fulfillment of these obligations by the pledgee, the pledger is entitled to demand the compensation for damages, caused to him (her).
      Footnote. Article 14, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Article 15. Correction of errors in registration

      1. Correction of technical errors in registration is made at the request of the interested person by making additional record in the register of pledge of movable property, as well as in the certificate of registration of the pledge.
      2. (is excluded).
      Footnote. Article 15, as amended – by the Law of the Republic of Kazakhstan dated 13 December, 2004 No. 11 (shall be enforced from 1 January, 2005).

Article 16. Procedure for registration of changes, additions and termination of the registered pledge

      Applicant records the changes and additions (including the transfer of ownership to another person, assignment of claims and etc.) and the termination of the registered pledge by submitting an application to the registering body and (or) the real estate center.
      Procedure for registration of changes and additions is established by the legislation.
      Footnote. Article 16, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first publication).

Article 17. Application for registration of changes, additions and termination of the registered pledge

      1. An application for registration of changes, additions and termination of a registered pledge of movable property shall contain a reference to the original registered pledge, description of the changes and additions to the pledge agreement (transfer of ownership to another person, assignment of claims and etc.), the grounds for termination of the registered pledge.
      2. An application for registration of changes and additions, in addition to the information specified in paragraph 1 of this Article shall contain:
      1) the date of signing of the agreement on changes and additions to the pledge conditions;
      2) the registration number of the pledge of movable property, assigned by the registering body or the real estate center;
      3) a description of the changes and additions;
      4) the signature of the pledger and the pledgee (their representatives).
      An application for registration of assignment of claims, in addition to the information specified in paragraph 1 of this Article shall contain the date of signing of the agreement on assignment of claims, the consent signed by the pledgee to the assignment of his (her) rights, the name (name) and address of the new pledgee.
      3. An application must be attached with an agreement on changes and additions (including the transfer of ownership to another person, an assignment of claims and etc.), that, after verification by the registration body or the real estate center of the information contained in the application, shall be returned to the applicant with the registration mark.
      Footnote. Article 17, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Article 18. Availability of information on the registration of pledge movable property

      1. Information on the registration of pledge of movable property is available to all individuals and legal entities, unless otherwise stipulated by the legislative acts of the Republic of Kazakhstan.
      2. Upon an application of any person, the registering body and (or) the real estate center shall provide the information in the form of an extract from the register of the registration of pledge of movable property, which shall:
      1) contain references to the fact that information on the pledge is presented at the end of the working day, preceding the issue of an extract;
      2) be signed by an authorized officer of the registering body and stamped by the registering body or the real estate center.
      3. In the absence of any record of a pledge in respect of any movable property, the extract must contain the appropriate indication of this.
      4. (is excluded).
      5. (is excluded).
      Footnote. Article 18, as amended by the Laws of the Republic of Kazakhstan dated 13.12.2004 No. 11 (shall be enforced from 01.01.2005); dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Article 19. Termination of registration of the pledge on the basis of court decision

      An interested person, on the basis of a court decision to invalidate the pledge or its registration, shall have the right to apply to the registering body or the real estate center on the annulment of the registration of pledge.
      Footnote. Article 19, as amended by the Law of the Republic of Kazakhstan dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Chapter 3. Settlement of disputes and responsibility for violation of the registration procedure

Article 20. Settlement of Disputes

      Disputes, relating to the registration and provision of information on the registration of pledge of movable property shall be resolved by the court.

Article 21. Responsibility for violation of the procedure for registration and issuance of information on registration

      1. The registration body or the real estate center shall bear responsibility under the laws of the Republic of Kazakhstan for:
      1) failure to comply with the rules for registration of pledge of movable property;
      2) any inaccuracy, incompleteness of entering data and misrepresentation of information on the pledge of movable property, provided to him (her) for registration and entry in the register of pledge of movable property;
      3) unlawful refusal to provide an extract from the register of pledge of movable property on the request of the interested persons;
      4) improper storage of documents and information submitted for registration, as well as the information entered in the register of pledge of movable property;
      5) disclosure of information, constituting a trade secret;
      6) completeness of collection of a levy for the state registration of pledge of movable property and mortgage of the vessel or vessel under construction.
      2. Damages, caused by the violation of the procedure for registration, delivery of information, misrepresentation of information shall be refundable by the registration body and (or) the real estate center. Intentional misrepresentation of information and other actions that contribute to the concealment of information, which by the law may and should be provided, shall be prosecuted in accordance with the law.
      Footnote. Article 21, as amended by the Laws of the Republic of Kazakhstan dated 13.12.2004 No. 11 (shall be enforced from 01.01.2005); dated 11.12.2006 No. 201 (shall be enforced from 01.01.2007); dated 10.07.2012 No. 34-V (shall be enforced from the date of its first official publication).

Chapter 4. Final and transitional provisions

Article 22. Introduction of Law into force

      This Law enters into force on the date of its official publication and applies to the legal relations arising after its entry into force, taking into account the provisions of Article 23 of this Law.

Article 23. Transitional provisions

      1. Within 60 days after the introduction of this Law into force, the priority in respect of the same subject of pledge of movable property that is not subject to compulsory state registration, in its registration has only those pledgees, who signed the pledge agreement prior to the introduction of this Law into force. Registration of such pledges is made in accordance with the provisions of this Law.
      2. Priority of pledges, registered in accordance with this Article, is determined by the date of the pledge agreement.

      The President
      of the Republic of Kazakhstan