General theoretic aspects of institution of legal liability for infringement of investment law of the Republic of Kazakhstan
Table of contents: The Kazakh-American Free University Academic Journal №4 - 2012
Author: Dautbayeva Dinara, Kazakh-American Free University, Kazakhstan
It is a trustworthy fact that one of the current directions of the
state policy in economic development of the country is attracting national and
international investment. It's an overall observation that the Republic of Kazakhstan has created and is consolidating a complex of economic, legal and
organizational measures for protection of national and foreign investments,
which is formalized as a set of rules and norms and is declaring a favorable
regimen for mutual investments.
As it is known, the notion of legal liability was introduced into
domestic general law theory in the early 60s, mostly in a retrospective aspect.
Theoretical development of legal liability in this area was supported by many
soviet researchers and lawyers. It is likely that up to date legal liability in
local theory still comes to reaction to infringement of the law. This way it is
fixed in textbooks, research articles, legislation and law enforcement.
The paradox is that the scientists haven't yet determined the notion
and meaning of retrospective legal liability. A variety of conflicting
attitudes towards this issue is reflected in modern dictionaries, encyclopedias
and monographs. Some determine legal liability as "state enforcement to execute
law requirements, legal relationship, in which each party shall be accountable
for its actions to the other party, state and society" [1, p. 503]. Others
claim that "legal liability is stipulated by the law responsibility of the
delinquency subject to go though unfavorable consequences". One more opinion is
that "legal liability proper is application by the authoritative state agencies
of law enforcement norms sanctions, which is manifested in negative
consequences for infringer of the law as deprivations or limitations of
personal and property character" [2, p. 694].
D.A. Lipinskiy not without reason says that "all researchers
definitely admit the existence of legal liability for infringement of the law.
But this is the only pint where their opinions coincide. All this despite the
fact that the notion of "legal liability for the infringement of the law" has
been discussed in the general theory of law for more than fifty years".
Legal liability should be of positive character only, being a
valuable legal characteristic of any subject of law. Outwardly, it is
manifested in socially active and habitual legitimate behavior of subjects of
the law. Its inner (psychological) aspect relates to conscious understanding by
the subjects (both in the present and past) of active and habitual legitimate behavior,
determined by regulatory norms of the law patterns of appropriate behavior,
their positive emotional and perceptional evaluation and volitional actions in
accordance with legal patterns [3, p. 25].
Legal liability antipode is a legal irresponsibility of the subjects
of the law, manifested outwardly in their illegitimate behavior (infringements
of the law). Internal (psychological) aspect of legal irresponsibility of the
subjects of law is manifested in their not knowing or insufficient
understanding of values of standards of law determined by obliging and prohibiting
rules of law, in their neglecting these laws, or, at times, in a direct
negative attitude towards law and volitional unlawful actions.
As a part of legal culture, legal liability of the law subjects
ensures internal control over legality of their behavior, based on their
internationalization of obliging and restricting legal standards due to
recognition of their personal and social value. In this case the demand for
external control and law enforcement activity in the country goes down.
Today in Kazakhstan, the importance of legal liability of every
subject of law increases and demands extra attention to be paid to its
purposeful formation both by the state and by the whole society. Here, we need
to consider the fact that legal liability of the subjects of law in a legal
life of the society is formed by different ways: a) directly through
application of encouraging sanctions and indirectly through observation of
patterns of legitimate behavior, especially when it is effectively supported by
encouraging sanctions; b) directly and negatively through inevitable and timely
punishment of infringers of the law and indirectly through punishing observers
of these punishing processes, negatively supporting their legal liability; c)
directly through scientifically organized system of legal education of the
Kazakhstan society and state should stir to
activity all mentioned ways of forming legal liability among the population.
First of all, we need to pay a special attention to rewarding every important
for the society legitimate behavior of the subjects of law with encouraging
sanctions stipulated by the legal norms. There is a demand for utmost development
of encouraging norms within the modern Kazakhstan law system. These encouraging
norms, as it is mentioned by many researchers, are, in many cases, more effective
in shaping legitimate behavior with the subjects of law, than protective (coercive)
Legal liability institution within the scope of investment law is
still at the stage of its development, although it belongs to intersect oral
legal institutions, along with the property institution. [4, p. 177]. There are
a number of reasons of theoretical and practical character for that. Thus, the
general law theory does not provide unambiguous answer to two major questions:
about positive legal liability and about specialized types of legal liability.
In the theory of socialist law there was a widely spread point of
view according to which along with the negative-retrospective aspect of legal
liability there is a positive-perspective aspect of liability. Positive
liability represents a wider interpretation of the notion of legal liability
according to which along with the liability for infringement of the law there
exists a liability for positive actions which meet the objective requirements
of a certain situation and ideals of the time. It is worth while mentioning
that positive liability had more opponents than supporters. It is quite
understandable since positive liability denies the very essence of legal liability
as a form of state accusation for non-fulfillment of legal regulations and imposition
of relevant sanctions directly stipulated by the law. In general, this supposition
is of farfetched character and is conditioned by trends and aspirations of the
epoch of developed socialism and communist society development.
However, if the first question, in our opinion, has lost its
relevance under present-day conditions, the second question, on the contrary,
under conditions of transition to market economy is gaining importance. In
fact, the scope of accepted as of today classic types of legal liability (civil
legal, material, disciplinary, administrative and criminal) cannot embrace all
existing ways of effect on infringers of active law. Also, dividing types of
liability by a sectoral feature does not indeed coincide with sectoral
structure of the law (there are more branches of law than types of liability;
material and disciplinary liability are inherent in one branch of law - labor
law; one and the same type of legal liability can be applied for contempt of
different branches of law). Finally, one of the main reasons for the sectoral
division of liability types to become traditional was thorough readiness and
elaboration of civil, administrative and criminal laws, which were recognized
as fundamental (major) law branches.
Multiplicity of types of legal liability is a quite logical
phenomenon, and there were multiple attempts in legal literature to single out
and define the essence of specialized types of liability. Most sound and
preferable in our opinion are the estimates about existence of specialized (special)
types of liability in the field of nature management - mountain, soil, water,
forest and ecological rights in particular. Consequently, along with sectoral
(traditional) types of legal liability we can distinguish mountain-legal,
soil-legal, forest-legal and ecological-legal liabilities. For example, such
ways of effect on infringers of the subsoil usage law as suspension or termination
of works in case of breaches of the requirements set for geological subsoil exploration,
minerals exploration or mining can serve as examples of mining legal liability,
though, as a rule, they are manifested as administrative and legal.
On the whole, we need to mention, that the legislation still
underestimates the role and importance of legal liability as a way to increase
effectiveness of investment law. Thus, the Investment Law gives a rather
general description of liability of a legal person of the Republic of Kazakhstan,
who made a contract, for reimbursement of the underpaid sum of tax money and
custom duty in consequence of provided by the contract investment preferences
with application of relevant vindictive damages, stipulated by the active law.
Norms of liability of equity market professional participants fixed in equity
market legislation are so unspecific and ambiguous that their realization in
practice is either impossible or formal [5, p. 47]. In particular, if a
professional participant breaches fixed activity norms, then, at worst,
National Equity Commission will suspend the license, and, in case the found
breaches are eliminated, the license is resumed and, as a result, the infringer
incurs no material liability.
Consequently, lawmakers contemplate the possibility of occurrence of
contractual and non-contractual liability of investors and other subjects of
investment activity. In the first case, the liability is held in accordance
with the signed agreement (contract), that is it should be the matter of civil
law liability, but applied sanctions are of administrative legal character,
besides vindictive sanctions are applied simultaneously. Administrative Offence
Code of the Republic of Kazakhstan as of January 30, 2001 has a new article
134-1 "Violation of terms of repay of the state full-scale grant" stipulating
the liability for violation of terms of repay of the state full-scale grants:
500 to 1000 monthly estimate indicators for legal entities - subjects of small
and medium size business; 1000 to 2000 monthly estimate indicators for legal
entities - subjects of large-scale enterprise. It is also worth mentioning that
lawmakers give the authority to Investment Committee of the Ministry of
Industry and New Technologies to consider administrative offence cases
stipulated by Article 134-1 "Violation of terms of repay of the state
full-scale grant" of Administrative Offence Code and to apply administrative
sanctions to the law violators.
Professional players on the equity market incur liability which
cannot be recognized unequivocally as administrative and (or) material, as
administrative law does not provide for such type of penalty as license
renewal, and what concerns liability for damage done it is possible to apply of
material and civil law liability. This makes it possible to draw a conclusion
about the emergence of a new specialized type of legal liability - investment
Special character of legal liability of investors in the field of
subsoil usage is manifested in the fact that Subsoil and Subsoil Usage Law does
not describe norms stipulating certain types of infringement of the law and
types of liability for such infringements.
There is a general principle fixed in Ecological Code of the
Republic of Kazakhstan as of January 9, 2007 # 212-III, according to which
violation of Ecological Law of the Republic of Kazakhstan entails liability in
accordance with the Law of the Republic of Kazakhstan (art. 320). Consequently,
it is supposed that making somebody liable for violation of norms, say, in the
field of subsoil usage is realized in accordance with the special legislation
(the same way it should work when it concerns violation of legal norms,
regulating using other natural resources).
Types of legal liability that can seriously influence effectiveness
of subsoil usage under market economy conditions include civil law liability. As
the main characteristics of civil law liability we can mention: 1) civil law
liability is just one of the forms of state-legal influence on the infringer of
the law; 2) civil law liability has a property character and influences
property of the infringer of the law; 3) civil law liability is laying of
unfavorable property consequences on a person who violated civil rights and
obligations; 4) civil law liability is the type of laying of unfavorable
property consequences on a person who violated civil rights and obligations,
which application of sanctions; 5) property and compensation (restoration)
character of civil law liability.
Civil law liability for obligation violation can be manifested in
the following forms: payment of damages; penalty payment; loss of deposit or
payment of additional deposit over the returned deposit; expropriation of
entire deal income in favor of the state if the deal is aimed at achieving
criminal intent; loss of property right for property pledged and for property
retained in accordance with the right of retention; etc. For all that, the most
widely spread, though not exclusive, types of liability for violation of
obligations are payment of damage and penalty payment.
We have to admit that civil law liability in the field of nature
management on the whole and subsoil usage in particular is still not effective
enough. In the sphere of civil legal regulations there should be no dictate of
the state, state agencies or state officials. However, such facts still take
place, which is why we think it is necessary to use more actively all leverages
capable of suppressing lawless and illegal actions of certain representatives
of the state agencies. Another important circumstance capable of increasing
effectiveness of civil law is maintaining contractual discipline by the parties
of civil circulation. Therefore establishment of the institution of arbitration
tribunal (including international commercial arbitration) may have a positive
Speaking about material liability we need to mention that it is
closely connected with civil law liability considering the fact that in both
cases the matter is in compensation for damage done.
Material liability and civil law liability are two independent types
of legal liability and institutions of different branches of law (labor law and
civil law respectively). Besides traditional differences existing between these
two types of legal liability described in literature we can also mention other
types of liability: civil law liability presupposes compensation for real
damage and loss of profit, while material liability is limited by the sizes of
direct (real) damage; unlike material liability, civil law liability
presupposes compensation for moral damage. Consequently, civil law liability is
based on the principle of full damage compensation, and material liability can
be limited. In particular, in accordance with the active law, employees incur
material liability for all damage they cause to their employer, if: 1) the
employer and the employee signed a contract about bearing full material
responsibility for failure to maintain safety of the property and other
valuables handed over to the employee; 2) in accordance with the law the
employee incurs full material responsibility for damage caused to the employer
in the process of job performance; 3) property and other valuables were
received by the employee to be accountable for by a one-time proxy or other
one-time documents; 4) the damage caused by the employee in a state of alcohol,
drug and toxic intoxication; 5) the damage is caused by shortage, deliberate
destruction or deliberate spoiling of materials, semi-finished products,
products (goods), including damaged caused during manufacture, and also damage
of tools, meters, uniforms and other things loaned by the employer to the
employee; 6) damage is caused as a result of disclosure of a commercial secret;
7) the damage is caused by the employee actions with the signs of actions
prosecuted at law. This enumeration is a closed one, which means that in any
other cases material liability of the employee will be limited.
We believe that under present-day conditions importance and
significance of material liability as the means of ensuring rational and
complex subsoil usage is underestimated. Under market economy conditions
material liability of working people and office employees, as well as
disciplinary liability may prove to be far more effective than other types of
other types of legal liability.
Disciplinary liability of working people and office workers occurs
only when disciplinary misdemeanor takes place and is of purely individual
character; also peculiarities of disciplinary liability are determined by the
fact that it can be applied efficiently and to all categories of workers.
Disciplinary liability in the field of subsoil usage presupposes
committing disciplinary offense in the sphere of subsoil usage. Disciplinary
offense in this case can take a form of non-fulfillment or inadequate
fulfillment by the workers (working people and office workers) of their job
responsibilities, connected with rational and complex subsoil usage, and also
with their protection.
Labor law establishes the following types of disciplinary penalties:
reprimand, rebuke, severe reprimand, termination of the employment contract
(discharge). On the whole, disciplinary liability can be applied both at state
and private enterprises (including ones with foreign interest), in accordance
with the employment contract signed or other contract concerning officials
(managers) and other categories of workers (working people and office workers).
At present time the type of legal liability in the field of subsoil
usage, which is characterized by the most developed regulation in active law,
is administrative legal liability. Administrative liability occurs in case when
administrative offence, i.e. unlawful, delinquent (deliberate or careless) act
(action or inaction), infringing upon the state and social system, property or
life and health of the citizens takes place. The Code of the Republic of Kazakhstan (articles 259-275; article 266 is eliminated) describes sixteen elements
of administrative offence in the field of subsoil usage and protection. In
particular, geologic subsoil exploration without signing a contract; violation
of right to geologic subsoil exploration; violation of rules of production waste
and sewage disposal; violation of rules in development of projects by mineral
mining and processing organizations; failure to secure norms of subsoil
protection during construction and putting into operation of mineral mining and
processing organizations; violation of ecological norms and rules during
subsoil usage and minerals processing, and others [6, p. 80].
When characterizing administrative liability we should mention its
following peculiarities: 1) administrative liability
is applied for infringements of the law, which are of little danger to the
society; 2) administrative law liability is always a consequence of unlawful
action (inaction) of a legal or a private person; 3) administrative liability
occurs as a result of infringement of the law in the field of national
interests, not private legal interests; 4) administrative law liability is
efficient; 5) administrative liability is administered by different authorized
state agencies (their officials); 6) administrative liability occurs in
accordance with the administrative legislation norms and is of preventive
character (i.e. it prevents perpetration of a more dangerous act - crime).
A special way of guaranteeing of appropriate subsoil usage by
national and international investors is a criminal liability. Traditionally,
criminal liability is associated with the state coercion and is treated as the
most severe disciplinary action (towards the infringer of the law). Besides,
criminal liability is characterized by certain deprivations, which the guilty
person is obliged to endure (deprivation of certain welfare is an objective
feature of liability, reaction of the state to the damage caused by the
Criminal code of the Republic of Kazakhstan as of July 16, 1997
contains two special parts dedicated to infringements in the field of subsoil
usage and protection: article 245 (violation of safety rules during mining and
construction operations) and article 286 (violation of subsoil protection and
usage rules). Among crimes, which are not connected directly with violation of
norms of subsoil protection and usage, but are related to them in a certain
way, we can name three more crimes: violation of ecologic requirements for
economic and other activity (art. 277 of the Criminal Code of the republic of Kazakhstan);
marine environment pollution (art. 283 of the Criminal Code of the Republic of
Kazakhstan) and violation of Continental Shelf Law and Exclusive Economic Zone
Law of the Republic of Kazakhstan (art. 284 of the Criminal Code of the
Republic of Kazakhstan).
Speaking about criminal liability in the field of subsoil usage we
need to remember that not only national investors can be the subjects of this
type of liability, but foreign investors as well.
Advancement of the society towards democracy and freedom,
recognition of an absolute priority of human dignity condition the necessity of
changes in legal regulation - increase in the role of permissions,
encouragements, which allow satisfying a variety of interests and needs, making
by positive means a stimulating influence on will and mind. Besides all that,
in Kazakhstan, where the amount of committed infringements of the law is very
high, it is impractical to weaken compulsory legal influence on the subjects of
law, performing these infringements. It is especially important to increase
percentage of law infringements solved, which is quite low in the country at
the moment. It is known that it is not the severity of punishment that keeps
from infringing the law, but its inevitability. It is also of no small importance
to form based on a scientific basis a system of legal education of citizens of Kazakhstan, which is missing in the country at the moment.
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Table of contents: The Kazakh-American Free University Academic Journal №4 - 2012