A little-publicized law took effect in Kazakhstan at the end of 2000 that could prove expensive to parties who issue or deliver promissory notes or bills of exchange, in the former Soviet republic. Under the Law on the Stamp Duty on Bills of Exchange and Promissory Notes in the Republic of Kazakhstan, No. 122-II, a 0.1% stamp duty was imposed on the face value of promissory notes and bills of exchange (veksels) starting December 30.
The duty is due at the moment the veksel is issued or, if it is imported into Kazakhstan, when any action is first taken in Kazakhstan which affects rights or obligations under the veksel. It is due from the issuer, but if the issuer does not pay the duty in full, the deficient amount may be paid by the holder or by any third party, who then is entitled to receive reimbursement from the issuer. The duty is paid through a bank to the state budget.
All rights associated with a veksel are suspended, but not revoked, until the stamp duty is paid. Therefore, a veksel cannot be enforced in Kazakhstan until the duty is properly paid.
Veksels issued in Kazakhstan may be issued on either regular paper or special note paper, with sale of the special note paper subject to the stamp duty. For a veksel issued on special note paper and with a face value of more than Kt10,000 ($69) the stamp duty is deemed paid on the first Kt10,000 and a receipt evidencing payment of the duty on the balance of the face value must be attached to the note.
Veksels issued by the National Bank of Kazakhstan or, in certain cases, by the government or ministry of finance, are exempt from the new stamp duty.
Curtis Masters and Gennadiy Orekhov